When a loved one has passed away, the very idea of navigating through the probate process can be overwhelming. Ideally, finding the right legal help for probate should be quick and easy so that you have much more time to focus on other matters.
But the process of administering an estate can be long and stressful, and although law firms should be doing all they can to help make the process as straightforward as possible for all their consumers at such a difficult time, the fact is many aren’t, and a lack of transparency in pricing means it is not realistic for a grieving legal customer to easily compare probate quotes while also finding the time to sort out all the other crucial matters involved with the death of a loved one. Recently released statistics have shown this.
New research has shown that clients in need of a probate solicitor are still not shopping around for the best deal on the right legal service for them. The Legal Service’s Consumer Panel’s annual Tracker Survey found that many customers were failing to make good use of the available resources to help them compare prices from many firms, such as comparison websites and customer review websites. One of the survey’s main findings is that the number of consumers who shop around for a legal service continues to remain low, with just 27% of respondents reporting they search the market for the best option. Worryingly, with only 16% comparing prices, probate is an area where customers appear to shop around the least.
Being asked to act as someone’s Executor may seem a simple request, and many people give it little thought before accepting. However, the role of Executor carries strict legal duties and can result in personal liability if the estate is not administered correctly.
Individuals rather than trust companies are often appointed as Executors in the deceased’s Will. Individuals can also be appointed to the role of Administrator in cases where no Will has been made by the deceased. It is essential that people understand the duties of being an executor before accepting the role so that they understand the potential pitfalls. The duty of an Executor/Administrator is to hold the estate of the deceased on trust for the beneficiaries. They have a responsibility to collect in the assets of the estate, pay any liabilities and then make distributions to the beneficiaries in accordance with the deceased’s Will or the Intestacy Rules.
Often lay Executors underestimate the amount of work that is required and the timescales involved in dealing with their responsibilities for administering the estate, which can be particularly onerous when they are also coping with the grief of losing a loved one.
Lay Executors need not employ the help of a professional, particularly for routine non-taxable estates, and they can do a lot of the initial information gathering themselves, which can help them minimise costs. They may then seek professional assistance in obtaining the Grant of Probate so that the professional can deal with the more technical aspects, including dealing with the Probate Registry and the necessary inheritance tax return for HM Revenue & Customs, leaving the lay Executors to deal with rest of the routine estate administration themselves, such as closing bank accounts; selling shares; paying liabilities, expenses and legacies; and distributing the rest of the estate.
Many Solicitors offer fixed fees for a “Grant only” service as well as fixed fees for a “full estate administration” service, and so those firms that look to charge on an hourly rate basis or unregulated firms that operate in this sector should be avoided. Oratto has teamed up with a number of firms that offer a low-cost fixed-fee probate service. Solicitors are regulated by the Solicitors Regulation Authority and are mandatorily required to have professional indemnity insurance in place so that if anything does go wrong, the Executors do have redress to ensure it is put right.
Being asked to be the executor of a friend or family member’s estate is an honour but also a major responsibility, as you could face a charge for hundreds of thousands of pounds if you make a mistake.
By Harvey Jones
The danger has come into focus after executor Glyne Harris was ordered to pay £340,000 to HM Revenue & Customs from his own
Mr Harris passed on proceeds from the £1.2million estate assuming the beneficiary would pay any IHT due, but instead they disappeared to Barbados with the money.
Once you have agreed to be an executor you cannot back out, so make sure you understand your responsibilities in full.
More than £5.2 billion in inheritance tax (IHT) was paid in the last tax year – the highest figures ever recorded.
Official statistics from HMRC's latest monthly estimate have revealed the unprecedented amount is an increase of £400 million on the previous tax year.
But it appears that not all those entitled to claim the new IHT allowances have been taking advantage of these, leaving them with a higher than necessary IHT bill – in some instances, families could be paying as much as £40,00 extra.