Wills and Probate

WILLS

Have you just purchased a property? Do you have sizeable assets to pass on to your loved ones after your untimely demise? Cheap Internet Service offering DIY kits or Professionally Drafted Will?

So why is it best to use a solicitor to make your Will?

• Well firstly they are properly trained.
• Secondly, they are monitored by a very strict governing body – the SRA (Solicitor’s Regulation Authority).
• Thirdly, they have practice insurance to cover any unfortunate situation where something goes wrong and lastly, if they go out of business there is always a successor practice who takes over their files.

Reasons why should you make a Will

1. First and foremost, a Will puts you in control. You choose who will benefit from your estate and what they are entitled to. You also decide who will administer your affairs after your death.

2.   If you don’t make a Will, the intestacy rules will decide who benefits from your estate and that can produce undesirable results.  The law also sets a hierarchy of who is able to handle your financial affairs after death, and that can lead to problems if the person is not suitable because of age, health, geographical location, or for any other reason.

3.   When you make a Will through a suitably qualified solicitor, the chance of a problem or dispute arising after your death is reduced. Disputes arise more often when someone dies without a will, as certain people are entitled to apply to court to challenge the provision made by the intestacy rules, if they deem it unfair.  For example, a long standing unmarried partner would receive nothing under the intestacy rules, so may have to consider making an application to a court to be awarded a share of the estate. There is huge stress and expense attached to such claims.

4.Whilst a Will can also sometimes be challenged on the basis that it is unfair, the courts are generally more reluctant to interfere in the provision made by a Will than that provided for by the intestacy rules.

5.   It is often quicker, cheaper, and less stressful to administer an estate where there is a Will. If you die without a Will, it may be necessary for your estate to commission genealogical research to identify any lost or unknown relatives. That can be very expensive and time consuming.

6.   A Will also enables you to preserve assets for beneficiaries. For example, if you have property and/or business interests, you may want those to go to certain people, whilst leaving further assets to others.  The intestacy rules provide for a division of your whole estate, so, if more than one person is due a share, can necessitate the sale of assets. This can cause problems and uncertainty for your staff if you have a business, and property may need to be sold despite it being the home of a particular beneficiary or other dependant.

7.  A Will can be used to ensure you make provision for those that need it, whilst protecting assets for other beneficiaries. For example, married couples can very easily set their Wills up to protect a share of their home from being used to pay for care fees. This Will give them the comfort of knowing the property is available for the survivor to live in for as long as it’s required.  Equally, for couples who each have children from previous relationships, a trust can be used to ring fence a part of the estate for those children. Otherwise, the intestacy rules may result in all the marital assets being passed down to the surviving spouse, with the children of the first spouse getting nothing. This, in effect, produces a lottery, with the prize going to the children of the second spouse to die.

8.  A properly drafted trust in your Will could enable someone to manage the inheritance you leave to a disabled or vulnerable person, and may ensure the intended beneficiary does not lose his/her means tested benefits.

9.  If you die without a Will and a share of your estate is left to a vulnerable or disabled beneficiary, the person handling your estate may need to insist on someone applying to be their court-appointed deputy before paying out their share, a process that is both expensive and time consuming. This is because people who lack capacity are unable to give a valid receipt for their share of an estate.

10. You can nominate someone to act as a guardian for your children (if you die while your children are minors) and you can also record your funeral wishes in your Will.  These are things that people do not commonly discuss within a family, so formally expressing your views in a will can provide very helpful and practical guidance for those you leave behind

Will Fees

A basic Will starts at £125.00 plus VAT and increases depending on the complexity. We are usually able to provide more accurate estimates on fees for a complex will and likely timescales after the first meeting as there are usually many matters to consider at the outset.

PROBATE

Administering an estate is the process of winding up someone’s affairs immediately after they have died. Probate has become an umbrella term for estate administration, but in fact it means obtaining a Grant of Probate and administering the estate where there the deceased left a Will. Where there is no Will, the same process is called obtaining Letters of Administration.

Both are the legal processes that you have to go through in order to gather in, sell or pass on someone’s property, possessions and money. Administering the estate includes dealing with all the tax consequences of this, and passing the estate to the beneficiaries.

The executor(s) (see below for more information) of the Will can apply for probate but as the executors are often relatives of the deceased and in a period of grieving, solicitors are often appointed by the executors to deal with probate on their behalf. Where there is no Will, family or friends are often appointed as administrators (the same as executors where there is no Will).

The basic steps of estate administration are as follows:

If there is a will:

• Value the estate and report it to HMRC.
• Pay any inheritance tax.
• Make an application for a Grant of Probate at the District Probate Registry
• Collect in the assets of the deceased including money after the sale of property or shares.
• Pay off all debts including utility bills.
• Keep a record of how the estate will be split amongst the beneficiaries of the will
• Pass the relevant assets to the beneficiaries of the will.
• Deal with the tax consequences of the person’s death, including considering Capital Gains Tax, Inheritance Tax and Income Tax for the last period of the deceased’s life, and the administration period.

If there is no will:

• Make an application for a Grant of Letters of Administration.
• Follow the same process as above.

Locating the most up-to-date will

Normally, family members or the executor(s) (often both the same people) will know where to locate the Will because they should have been told where to find it by the deceased. However, if it cannot be found after a search of the home of the deceased then you should try and locate their solicitor as it may have been deposited with them for safekeeping. Alternatively, it may have been deposited with the London Probate Department.

If the Will still can’t be found, there are various other steps that can be done to ensure there really is no Will, and you should seek professional advice on these.

Once the Will has been found it should be checked to ensure it is the most up-to-date version.

Executors and Administrators

Executors are the people empowered by the Will to undertake the estate administration. They are called administrators where there is no Will.

They only receive assets of the deceased if they have been named in the Will as a beneficiary.

Depending upon the number of executors appointed, up to four may apply for probate. Each executor applying for probate will need to legally declare that the information in the probate application is true.

The local probate registry may be able to help if it is difficult to locate the other executors.

An executor cannot apply for probate if he/she does not have the mental capacity.

For an executor that does not want to carry out the work of the executor may:

• Give up the right (called ‘renouncing executorship’) to apply for probate by completing a form.
• Apply at a later date by reserving a legal right to do so.
• Appoint an attorney by completing a form. This can be useful if you want your solicitor to sign documents on your behalf, or if you live abroad.

 The Process

An executor of a Will can apply for probate or the executors can appoint a solicitor with specialist knowledge or a person licensed to provide probate services.

1. Before applying for probate, the executor(s) must first estimate the value of the estate as inheritance tax may be payable.

At this stage it is also a good idea to communicate the death of the deceased to utility companies, banks, insurance companies etc so that they do not start sending reminder letters if bills have not been paid on time. If an insurance policy is about to expire, say buildings insurance, the executors may need to apply for a new policy to ensure that an ‘all risks’ insurance policy is in place until the property is sold or passed to a beneficiary. If you ask a solicitor to help, they will do all this for you and ensure that any third parties correspond with them, so it is a good idea to seek professional advice before carrying this out.

2. Pay any inheritance tax

At this stage and without a proper valuation it may be difficult to determine the true value of the estate, but based upon the estimate some inheritance tax may be payable before you are able to obtain probate. You can be refunded by the estate or the beneficiaries if you pay inheritance tax out of your personal funds, and there are other ways of paying tax if you cannot personally. This can be complex and it is advisable to seek professional help.

3. Make an application for probate

We can assist for this part of the estate administration process.

If you do not appoint a solicitor, you can make an application by post or if the deceased lived in England or Wales and if you have the original will, the original or interim death certificate and have already reported the estate’s value you can make an application for probate online. You will still need to send the original documents by post to the local Probate Registry office together with the applicable fee.  A grant of probate (or letters of administration in the absence of a will) should be sent to you within about 20 days.

4. Collect in the assets once you have probate

A copy of the grant of probate is sent to the organisations that hold the assets, for example the bank or building society, National Savings and Investments, pension providers and estate agents if property is to be sold.

Money in a joint bank account automatically passes to the other account holder.

If the deceased held property with another as a ‘joint tenancy’, ownership passes to the other owner. Otherwise, their share goes to the beneficiary named in the will.

If you appoint a solicitor, the monies will be held in their client account until the beneficiaries are paid. If no solicitor is involved, the executors will have to set up a bank account in which to transfer the assets of the estate. This is called an ‘executorship account’.

5. Pay off all debts

Once the executor(s) has obtained access to bank accounts and realised the sale of assets, he/she will be able to pay all outstanding debts including utility companies, mortgages, HMRC, online accounts etc.

He/She can also pay any overpaid pensions, attendance allowance, and settle any income tax or capital gains tax for the last period of the deceased’s life or for the administration period (both these taxes still apply to the estate and the executor(s) is liable to ensure they are paid from the estate).

It may be necessary to place an advert in the Gazette to notify creditors so that they have a chance of claiming any sums owed.

6. Record how the estate is being split amongst the beneficiaries.

The executor(s) will need to keep a record called ‘estate accounts’, which record the amount of money that has been realized from the assets, the amount of the debts paid and how any money, property or possessions are being split between the beneficiaries. The accounts should be signed by the executor(s) and in some cases, the beneficiaries.

7. Distribute assets to the beneficiaries of the Will

Once the estate accounts are agreed, the executors must distribute all the assets to the beneficiaries in accordance with the instructions in the Will.

If there is no Will the law of intestacy dictates how the assets shall be distributed.

Our Probate Team

Our probate team consists of Mr Teerun Ramlochun, Mr Ben Veerapen or Mrs Fouzia Miller who all have extensive experience and provide high quality service in all matters relating to Wills and Estate administration.

Our Fees

 

Grant of Probate for estate value under £1 million	£2500.00 plus VAT to £6500.00 plus VAT.
Grant of Probate for estate value over £1 million	2% of the total value of the estate plus VAT

VAT charged at the normal rate of 20%.

The level of fees

Probate is an area where the cost is proportionate to the complexity of the estate in question. 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. As an indication, the lower end of the fees for estate value under £1 million will be charged if all of the following are applicable:

• There is a valid Will
• There is no more than one property
• There are no more than two bank or building society accounts
• There are no other intangible assets
• There are no disputes between beneficiaries on division of assets
• There is no inheritance tax payable and the executors do not need to submit a full account to HMRC; and
• There are no claims made against the estate.

If there are multiple beneficiaries, properties and more than two banks or building society accounts, our fees will be at the higher end.

If the estate consists of any share holdings (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 sale or transfer of any property in the estate is not included.

We are usually able to provide more accurate estimates on fees and likely timescales after the first meeting as there are usually many matters to consider at the outset.

Potential disbursements

Disbursements are costs related to your matter that are payable by us to third parties. We handle the payment of the disbursements on your behalf to ensure a smoother process. Typical examples are as follows: 

 

	AMOUNT	VAT
Probate Registry Fee	£155.00	Nil
Office copies for the grant of probate (per copy)	£1.50	Nil
Advert in the local newspaper	Starts from £150.00	Potentially at 20%
Advert in the London Gazette	Start from £92.00	Potentially at 20%
Bankruptcy searches (per beneficiary)	£3.00	Nil
Land Registry search fee (if property involved)	£3.00	Nil

 Timescales 

Obtaining a grant of representation and dealing with the administration of an estate can be complicated; it can take several months to make sure everything is done properly. Typical timescales are 3-6 months to obtain a Grant of Probate and 6-12 months for completing the whole administration. We do however offer a complete estate administration service to deal with everything for you.

Every estate is different, which is why we encourage you to contact us so we can provide you with an estimate outlining a range of potential fees to make sure that you get the right amount of support to meet your individual circumstances. We will update you regularly on your costs throughout the matter so you can stay in control throughout.