Grant of Probate - price transparency

There are often conflicting views given by friends, family and even apparent experts as to what is involved in the proper administration of an Estate, and as to how long that process should take.  The reality is that not everyone’s personal affairs (and therefore estates) are the same. Whilst the general framework is the same, the nuances can have implications for timescales and complexity.

Our specialist lawyers will talk you through the process, timescales and likely costs involved before you formally instruct us to do any work.

We have set out below the process, timescale and legal costs (and disbursements) involved in the administration of an estate. Please do not hesitate to contact us if you have any queries or would like to discuss matters in person.

An overview of the probate process.

1. Following a bereavement, somebody (often family or friends of the deceased) will put in place immediate arrangements for registering the death, dealing with the funeral director and making sure important documents (such as a Will, identification, property and financial documents) are secure.
2. A legal advisor may be consulted at this stage to discuss the arrangements for the funeral and securing important personal documents. For example, the lawyer may hold the deceased’s Will in secure storage and the Will may need to be consulted to identify the Deceased wishes for their funeral or disposal of their remains.
3. A legal advisor is often formally instructed after the immediate post death arrangements have been concluded, for example, a funeral. The legal advisor will usually meet with the executors (and sometimes the Deceased’s family and beneficiaries) review all documentation available relating to the Deceased’s personal and financial affairs. The Lawyer will review the Deceased’s Will and testamentary wishes, with a view establishing what work needs to be undertaken to administer the Deceased’s assets, discharge the Deceased’s liabilities and conclude the Deceased’s Tax affairs before being in a position to calculate what remains to be distributed to beneficiaries of the Deceased’s Estate.
4. This investigatory period may include searching for a Will, checking that the deceased made no subsequent Will, making enquiries as to whether other unknown assets or liabilities may exist and obtaining proper valuations of the Deceased’s assets and liabilities for Her Majesties Revenue and Customs purposes.
   
   Notices (known as Trustee Act notices) may be published by the legal advisor to protect the Executors from unknown claims against the Estate.
5. Once the extent of the Deceased’s financial and property affairs have been established, the Legal Advisor will prepare the Inheritance Tax Account and Probate Oath for the executor’s approval.  The documents will usually be discussed during a meeting and following which they will be finalised for signature.
6. It is important to note that the timescale of this investigatory period can vary. For example, an estate with a main residence and cash saved in bank and savings accounts will generally take less work (and therefore time) than an estate, for example, containing a number of properties, agricultural land and share or bond investments.
7. In cases where a full Inheritance Tax account is required, the executors must await confirmation from HMRC that the tax position has been accepted “in principle” and that all tax that needs to be paid immediately has been paid before the application for probate can be submitted. Time must be factored in to allow for the transmission of funds (which is usually out of money held in the Deceased’s bank(s) or building society account(s)) or by way of a loan, and receipt/acknowledgement by HMRC)
   
   For Estates where the Inheritance Tax return - statement for information (a much less complex form) is accepted by HMRC, the application for probate can proceed straight away.
8. Following receipt of the grant of probate, the legal advisor can begin the process of administrating the Estate which may include the sale or gift of land and buildings, closure of financial assets, sale of shares and payment of the deceased’s liabilities.
   
   The Timescale of this process will depend upon the number of assets to administer. A closure of a bank account may be relatively straightforward, whereas the sale of shares or encashment of a bond or trust asset will require the completion of more complex documentation.
9. Once the Deceased’s estate has been administered, the legal advisor (in consultation with the Executor) will finalise the Estate Accounts which identify the receipts and payments to and from the Estate and the assets which are available for distribution. It may be that certain items of property such as personal possessions have already been passed to the intended recipient(s). It is also possible that smaller cash gifts have been made from the Estate prior to the finalisation of the accounts.
   
   Once the Estate Account has been approved, the Executors can consider paying out the remaining legacies and bequests, or finalising the transfer of property (such as houses, land or shares).
   
   It should be noted here that Executors can be liable personally for distribution of an Estate or part of it. Consequently, your Legal Advisor may delay distribution to allow for any period for a potential claim to arise, to lapse.

Case Study example

Mr A instructed us to help him administer his late brother’s estate. Mr A’s brother had made a Will and Mr A brought it with him to the appointment together with his brother’s death certificate and a case containing his late brothers personal and financial documents. 

The Deceased owned his house free from mortgage.  Mr A had secured the house and brought any important papers with him to the meeting.

The Deceased’s Will left all of his Estate (after payment of debts) to his son and his daughter. Each of the Deceased’s children were alive, over 18 and living locally.

Mr A had discussed matters with the Children and they both agreed that they would like the house to be sold and the remainder of the Estate paid to them once matters had been finalised. There were no disputes and Mr A and the Children were all in agreement as to the administration of the Estate.

The Estate comprised the Deceased’s house worth £150k and two savings accounts totalling £100,000. There were bills to pay including the funeral, utilities and some care home fees.   Mr A was concerned about paying the funeral cost. We were able to arrange payment promptly of the undertakers invoice via the Deceased’s bank account.

The Deceased had been in receipt of state pension and private pension, but did not exceed the income tax threshold. We were therefore able to finalise matters with HMRC very promptly.

We contacted the various organisations and government departments to obtain valuations of the various accounts to enable us to understand the extent of the Deceased’s Estate.  The family thought that there may be other assets, so we organised an electronic search of the unclaimed assets register and located a further account which formed part of the Deceased’s estate.

The family were very certain that there were no unknown liabilities. We checked through the Deceased’s current account statement to identify any potential assets and liabilities (that we were otherwise unaware of) but none were located. However, in order to protect himself from a claim, Mr A asked us to publish Trustee Act notices which require any potential claimants against the estate to make their claims known within two months of the notice. We made the necessary arrangements and the notices were published promptly, the following week.

We completed the documentation required by the local authority to procure the probate exemption on the payment of Council Tax.

During the investigatory period, we assisted Mr A to obtain property valuations, to dispose of personal possessions and finding an estate agent to deal with the marketing for sale of the house.  We also made the necessary arrangements with the house insurer to confirm cover was still available, despite the house now being vacant.

Given the value of the Estate, an Inheritance Tax Return (but not full account) was required. We completed the tax return using the information we had obtained by working carefully through the Deceased’s papers and verifying details with the various organisations and financial institutions involved. We prepared the application for probate which Mr A approved and signed together with the Inheritance Tax return following a meeting with Mr A to review and approve the documents.

Probate was granted within four weeks. With the probate available, we were able to quickly close the bank accounts and pay any residual liabilities such as outstanding Council Tax, a small credit card balance and the balance due to the care home.

With only the property remaining to be sold and the two months Trustee Act notice having expired, Mr A authorised us to make an interim payment to the Deceased’s children, retaining an agreed amount money back for any unexpected property related liabilities, to cover insurance renewal and legal costs. The Children were happy to receive some of their inheritance early.

The house was subsequently sold and we were able to handle the sale, which ensured that the administration and the sale went as smoothly as possible.

Following the conclusion of the house sale, we paid the final utility bills up to the date of sale and were able to claim back a partial refund of house insurance. We prepared an estate account for Mr A, setting out the overall financial position. Mr A and the Children approved the account, which enabled us to finalise the estate and make the final payments.

Overall, the time we spent administering the estate totalled 8 hours and based upon our hourly charging rate, the legal costs were £1,600 plus VAT (total £1,920) for our work.  There were payments by the estate to cover disbursements such as the probate application fee and Trustee Act notices, which were paid from monies paid to us following closure of the Deceased’s accounts.

This is an example only, and 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.

Probate costs:

If you would like us to collect and distribute the assets and ensure that the deceased’s wishes, as set out in their will, are fully carried out in addition to obtaining the grant of probate, there will be additional charges. We estimate that the work will take between 5.5 and 11 hours work at £210 per hour (total cost estimated at £1000 to £2000 plus VAT). The exact cost will depend on the individual circumstances of the matter.

Typical Disbursements incurred during an estate administration are:

• Probate application fee of £155 plus £0.50 for every sealed copy
• £7 Swearing of the oath (per executor)
• Bankruptcy-only Land Charges Department searches (£2 per beneficiary)
• £200 Post in The London Gazette – Protects against unexpected claims from unknown creditors (if you require this)
• £150 Post in a Local Newspaper – This also helps to protect against unexpected claims (if you require this)

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

Potential additional costs may be incurred if:

• If there is no will or the estate consists of any share holdings (stocks and bonds) there are 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.
• If any additional copies of the grant are required, they will cost £0.50 (1 per asset usually).
• Estate Agents may need to be instructed to provide a valuation for the property.
• Dealing with the sale or transfer of any property in the estate is not included.

How long will the process take?

On average, estates that fall within this range are dealt with within 10 – 12 months, depending on when the Property is sold. Typically, obtaining the grant of probate in less complicated estates takes 10 weeks from the date on which we receive our Client Care Letter back duly signed and approved. Collecting cash assets then follows after the Grant is obtained. Once this has been done, we can on occasions, depending on circumstances, make an interim distribution, which normally takes 2 weeks.

Once the Property is sold we will then be able to finalise the administration of the estate.

More complex estates

Estates with a larger number of assets and beneficiaries, assets owned abroad, missing beneficiaries, estates requiring a full Inheritance Tax Return and any claims for transferable unused nil rate band or residential nil rate band, or other relief or exemption, will involve a great deal more work and the time involved will be greater.

We also charge an uplift in more complex estate administration (which does not apply to the example given above) of:

Where the firm is not an appointed executor:

0.5% of the value of the house (if any);

1% of the gross value of the other assets (i.e. all assets excluding the house).

Where the firm (or an employee) is an appointed executor:

0.75% of the value of the house (if any);

1.5% of the gross value of the other assets (i.e. all assets excluding the house).