Beaujeux Wilde & King Solicitors - Probate & Estate Administration

What is Probate?

BWK Solicitors - Probate & Estate AdministrationThe general term “Probate” means the winding up of a deceased person’s estate. The Executors of the Will have legal control of that process and they can instruct us to help them carry out their legal duties.

The Probate process is the collecting in or transferring of the Estate assets, paying all liabilities and any Inheritance Tax (IHT) and then distributing the net estate to the beneficiaries of the Will (or to the next of kin if there is no Will).

Our highly trained and experienced probate lawyers are here to help you with these estate administration processes.

1. Obtaining the original last Will of the deceased.

2. Valuing the assets in the Estate including any jointly owned property. Valuing any debts and liabilities. Values must be specific to the date of death and they form the basis of an Inheritance Tax return that the Executors need to sign off.

3. For all Estates, preparing an Inheritance Tax return or account confirming the valuation of the Estate and the overall Inheritance Tax (IHT) payable. Tax is generally payable over £325,000 of net assets at a rate of 40% (but see separately our sections on Inheritance Tax for more information). Arranging for the payment of any tax before the next stage.

4. Once any IHT is paid, preparing a statement for the Executors to sign to accompany the original last Will to send to the Probate Registry of the High Court.

5. Applying by post to the Probate Registry for a document called the ‘Grant of Probate’ (or called ‘Letters of Administration’ where there is no Will) which document is a ‘ticket’ for the Executors to then collect in Estate assets, sell or transfer property and to settle Estate liabilities. Without the Grant, the Executors have little power to collect in any assets as they do not have their legal authority.

6. Collecting in capital and cash assets, transferring or selling property, collecting in life policy entitlements, selling or transferring shares to beneficiaries.

7. Settling any Estate debts, costs and expenses.

8. Completing an Estate Income Tax return for the period up to the date of death (and for the period of administration if applicable).

9. Preparing a set of Estate accounts to confirm all assets received or transferred, all liabilities paid and to show the net sums or assets due to the beneficiaries.

10. IHT and care fees planning, including preparing of any Deed of Variation to protect the Estate passing to a spouse or beneficiary.

11. Distributing the final amounts and assets.

There are a vast number of side-issues associated with each of those actions listed above, on which advice should be sought to provide support and legal expertise. Such advice can also lead to money savings for Estates and families.

Examples:

  1. Decisions on selling or keeping the family home or a property that is due to be passed to children of the deceased. Capital Gains Tax can be mitigated by advice on how to structure the ownership held by beneficiaries to maximise all allowances.
  2. Arrangements for the family home, in particular the best structure for a child to buy out the share of their sibling.
  3. Protecting assets passing to the main beneficiaries. Inheritance Tax, care fees and protection from insolvency and divorce might be mitigated by the preparation of legal devices such as a Deed of Variation which varies the terms of the Will to protect the assets passing to beneficiaries.
  4. Advice for beneficiaries who receive assets to then protect those via an amended Will to maybe include flexible Trusts.
  5. Financial advice regarding retaining assets, cashing them in or splitting them between beneficiaries.
  6. Valuing assets for Inheritance Tax purposes.

Costs for Probate work

Depending on the circumstances, nature and value of the estate assets and what level of assistance you require, our probate administration fees vary, as we usually charge on a time spent basis. Each Estate and circumstance is different and our costs are tailored accordingly.

For example, if the Executors have already obtained the Estate valuations and where it is clear there is no inheritance tax to be paid due to the small size of the estate, then a lower fee would usually apply for just applying for probate and no reporting to HMRC – but we will have to factor in what might be uncertainties in the process.

For full estate administrations our time and advice is charged according to what work and time is spent, we do not charge a fixed percentage of the value of the Estate. Then we are only paid for the specific work we undertake. Our clients often see this as the best and fairest method.

We will always discuss the options and scope of work with you at the outset and update you if circumstances change, for example if additional unforeseen administration work is required. Our costs are paid from the Estate at intervals throughout the administration process and then at the conclusion of our work or the administration.

Cost Guidelines:

By way of guidance, for a simple grant of probate application only, our fees will be £1,250 + VAT.

For applications for probate where inheritance tax is payable, and a full tax return is required to be submitted to HMRC then our fees are usually between £1750 + VAT to £2000 + VAT.

Occasionally a full tax return is required even where inheritance tax is not payable, the for this is £2,250 + VAT.

We can undertake full administration work for an estate. The extent of the work required varies depending on the nature and value of the estate and the complexity of matters to attend to. We will discuss such matters with you on a case-by-case basis to provide a more accurate estimate of costs and timescales, but please find guidelines below.

Our service includes:

  • Providing you with a dedicated and experienced private client lawyer or private client executive to work on your matter.
  • Identifying the legally appointed executors or administrators and beneficiaries.
  • Accurately identifying the type of Probate application, you will require.
  • Contacting all asset holders and debtors to report the death.
  • Obtaining probate valuations for all assets and liabilities.
  • Arranging insurance for unoccupied property.
  • Placing statutory notices in The London Gazette and local newspapers to protect against unexpected claims and liabilities.
  • Preparing and submitting the relevant Inheritance Tax (e.g. IHT400 with supporting schedules).
  • Arranging payment of IHT if required.
  • Preparing the Legal Statement for the Personal Representatives/Executors to sign.
  • Making the application for the Grant of Probate/Letters of Administration.
  • Collecting in estate assets and paying liabilities.
  • Preparing and submitting estate income tax returns.
  • Preparing estate accounts.
  • Undertaking bankruptcy-only Land Charges Department searches on beneficiaries.
  • Distributing the estate to beneficiaries.

COSTS

Our full estate administration service is based on our private client team hourly rates +VAT, plus disbursements, as follows:

Rachel Wos – Solicitor and Head of Private Client – £295 + VAT per hour

Johanna Knott – Solicitor – £285.00 + VAT per hour

Lucy Pankhurst – Solicitor – £275.00 + VAT per hour

Legal Assistants – £150.00 + VAT per hour

The exact cost will depend on the individual circumstances of the matter. For example, if there is one beneficiary and no property, costs will be at the lower end of the range. If there are multiple beneficiaries, a property and multiple bank accounts, costs will be at the higher end.

Example:

For estates where there:

  • is a valid will
  • is no more than one property
  • are no more than 5 bank or building society accounts
  • are no other intangible assets
  • are no more than 5 beneficiaries
  • are no disputes between beneficiaries on division of assets. If disputes arise this is likely to lead to an increase in costs
  • is no inheritance tax payable and the executors do not need to submit a full account to HMRC
  • are no claims made against the estate

We anticipate this will take between 6 to 20 hours. At Rachel Wos hourly rate of £295+VAT per hour the total estimated costs would be £1770 to £5900 (+VAT).

DISBURSEMENTS

  • Probate court fee: £273
  • Court sealed copies of the Grant: £1.50 (each)
  • Bankruptcy-only Land Charges Department searches: £2 (per beneficiary)
  • Statutory notices in The London Gazette and local papers – protects against unexpected claims from unknown creditors: £200-£350

Disbursements are costs related to your matter that are payable to third parties, such as court fees. They are in addition to our fees. We handle the payment of the disbursements on your behalf to ensure a smoother process.

POTENTIAL ADDITIONAL COSTS

  • If there is no will or the estate consists of any shareholdings (stocks and bonds) there is likely to be additional costs that could range significantly depending on the estate and how it is to be dealt with. We can give you a more accurate quote once we have more information.
  • Dealing with the conveyancing of the sale or transfer of any property in the estate is not included. We have a team of residential conveyancers that can assist with this and we can provide a quote if required.
  • Any disputes between beneficiaries or the Executors.
  • Queries from HMRC regarding valuations supplied.

PLEASE NOTE: Inheritance Tax payable is in addition to our fees.

TIMESCALES

On average, it can take 8-12 weeks to obtain the Grant of Probate for an estate where there is no Inheritance Tax payable.

For estates where there is Inheritance Tax to pay it can take 8–18 weeks for the Grant to be issued but the timescale depends on arrangements for paying IHT and HM Revenue and Customs issuing the IHT421.

Inheritance Tax (“IHT”)

Inheritance Tax (IHT) is a tax that is payable at 40% on the excess value of a net Estate over the IHT thresholds. The basic tax threshold is the Nil Rate Band which is currently £325,000. Therefore if the net estate (assets less liabilities and funeral expenses) is say £400,000 for an individual, the tax payable could be £30,000.

If you are an Executor it is absolutely essential to obtain advice before completing any Inheritance Tax return or account. There are a number of potential exemptions and reliefs that can reduce the amount of IHT payable. For example, there is a spouse exemption of 100% on the first death if one spouse dies passing the estate in full to the surviving spouse.

On the surviving spouse’s death there is also a potential doubling-up of the £325,000 IHT allowance so potentially increasing the IHT threshold to £650,000. Since 2017 an additional threshold is applicable in some circumstances, the “Residence Nil Rate Band”. This threshold, if available, can mean an additional £175,000 of nil rate threshold available before any IHT is payable.

Gifts to registered charities attract automatic IHT exemption and there are certain circumstances where the IHT threshold can be reduced from 40% to 36% depending on the amount of charitable gifts made in a Will.

We advise the Executors and then usually prepare the IHT forms for the Executors to sign off.

IHT mitigation: please see our section on Inheritance Tax Planning. There are steps that can be taken by individuals to potentially save IHT both before death in terms of structuring Wills for IHT planning, and post-death structures using Deed of Variation.

Our Probate & Estate Administration team

Experience and expertise

We have conducted many Estates from start to finish either as Executors or as solicitors for the Executors. Our team has all the necessary expertise and experience in dealing with all types of Probate and Trust administration. Our lawyers are supported by a Probate administrator.

Expertise can be a valuable asset for families in dealing with Estate administration, particularly in the ever-changing environment of Inheritance Tax planning.

Our Probate lawyers:

Rachel Wos BA TEP Solicitor and Head of Private Client (Stone & Chalfont St Giles)

Johanna Knott BA SFE TEP Solicitor, member of STEP (the Society for Trust and Estate Practitioners) and Solicitors for the Elderly (Chalfont St Giles)

Lucy Pankhurst LLB Hons Solicitor (Stone)

Contact us

To make an appointment to discuss a Probate or Estate Administration matter with a member of our friendly and responsive legal team please contact us:
Tel: 01494 870075 (Chalfont office) or 01296 747151 (Stone office)

Or complete the form below

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