Probate, Estate Administration and our fees
Obtaining a Grant of Probate is just one element of administering an estate.
Part of the process is to ascertain the value of assets, accrued income (interest/dividends), liabilities and lifetime gifts to apply for probate and determine the Inheritance Tax (IHT) position of the estate. A large amount of work is required before and after Probate is granted when administering an Estate.
Norrie, Waite & Slater Solicitors are committed to providing a first-class service when it comes to the Administration of Estates and we have many years’ experience.
Essential to our commitment is providing up-front and transparent fees for our Estate Administration/Probate services. We have a range of fee structures which we will discuss with you during an initial meeting then confirm this to you in writing before an instruction is agreed. Our fee structure can be found below.
ARRANGE A FREE INITIAL APPOINTMENT
To obtain a quote tailored to the circumstances of the estate, you should arrange an initial FREE APPOINTMENT so we can go through the estate details with you – assets, liabilities, beneficiaries, income details, taxation matters (income tax, Capital Gains tax and Inheritance Tax) etc. We will explain the legal and taxation obligations an Executor/Personal Representative has and explain how you can protect yourself from such things as personal liability, potential claims against the estate and how you can ensure you have located all the assets.
These appointments are invaluable and by far the best way for you to understand what administering an Estate involves. They also give you the chance to ask any questions you may have, as well meeting with us so you get to know who would be dealing with the matter should you instruct us.
INSTRUCTING NORRIE, WAITE & SLATER – WHAT WE WILL DO (Estate where full IHT return not required)
- Identify solely and jointly held assets (including accrued interest/income/dividends), liabilities, lifetime gifts and ascertain their values for probate purposes.
- Advise on and arrange asset and creditor searches to ensure you have complied with the expected due diligence and legal obligations an Executor/Personal Representative has.
- Preparation of the Legal Statement through the H M Court & Tribunal Service portal and, if required, the IHT 205 (short form Inheritance Tax account) in order to apply for probate.
- Gather required documents and preparation of relevant HMRC IHT paperwork for Transferable Nil Rate Band (if required);
- Finalise income tax to the date of death and previous tax years as may be required by HMRC (this is a legal requirement and is the responsibility of an Executor/Personal Representative. This will include:
- - Correspondence with relevant sources of income such as private/work pensions, the DWP, employers, banks, shares re: dividends etc
- - Correspondence with HMRC
- We advise you to ensure you fulfil your legal obligation to protect assets as required – e.g. arranging the right level of specialist unoccupied buildings insurance.
- Ascertain the entitlement of beneficiaries in a Will or those benefitting under the rules of intestacy.
- Correspondence with beneficiaries as required.
- On receipt of the Grant of Probate cash in or transfer assets as required.
- Settle estate liabilities.
- Settle estate expenses (these are not the same liabilities);
- Finalise income tax for the administration period of the estate. This is essential as an estate does not have a Personal Allowance. In most cases all income is received gross of tax and is taxable at either 20% or 8.75% (dividend rate). It is the Executors/Personal Representatives legal responsibility to ensure the correct income tax is ascertained and paid to HMRC.
- Consider Capital Gains Tax (CGT) position of the estate and complete returns as required.
- In some cases, estate must be registered with HMRC in respect of Income Tax and CGT. We will identify if that is necessary and can arrange registration with HMRC.
- We can advise on and implement solutions to minimise the impact of income tax and CGT.
- Arrange interim distributions to beneficiaries in line with their entitlements and ensure the estate is not over-distributed.
- Carry out Bankruptcy Searches of the beneficiaries to comply with your legal obligations before distributing an estate.
- Provide beneficiaries with required HMRC R185 form(s) confirming the proportion of income they have received, and tax paid, to assist with their own income tax position (beneficiaries may be able to claim back income tax paid, or may have additional income tax to pay);
- All other associated advice as may be necessary as part of the administration of an estate.
- Prepare final estate accounts for approval by the Executors and for the Residuary Beneficiaries as they are entitled to receive. The accounts will differentiate between capital and estate income, essential to assist with the income tax obligations an Executor has. They will also itemise every transaction relating to the estate.
- Arrange final distributions to beneficiaries in line with their entitlements.
INSTRUCTING NORRIE, WAITE & SLATER – Estate where full IHT return (IHT 400) is required and there may be an IHT liability
The work as noted above will still be required. In some cases, an IHT 400 is required even when IHT is not payable. It is the Executors’ responsibility to ensure the correct return is submitted. An incorrect submission, or submitting an incomplete IHT 400, will delay the probate application and the Estate Administration and can lead to HMRC penalty and interest charges.
The additional work would be:
- Preparation of the IHT 400 and supplementary pages as required. Including detailed asset and liability information as required by HMRC.
- Ensuring correct HMRC compliant valuing methods and evidence is submitted as required e.g. correct valuation method for stocks and shares, and correct valuation criteria for personal items and property.
- Submission of correct paperwork to apply the Residential Nil Rate Band (if applicable);
- Ensure all available IHT reliefs, allowances and exemptions are correctly applied – e.g. charitable exemptions, Business and Agricultural Property Relief (if applicable);
- Ascertain lifetime gifts and apply available allowances and reliefs (if applicable)
- Ascertain IHT liability.
- Arrange payment of all or required initial proportion of IHT due so probate can be applied for;
- Adhere to strict HMRC time-frames for submission of IHT 400 and payment of IHT to avoid late penalty payments and interest charges;
- Deal with HMRC enquiries as they arise e.g. – correspond with District Valuer if HMRC query a property valuation.
- Prepare and submit a Corrective Account if values of assets/change to allow possible refund IHT, or additional payment.
- Prepare and submit relevant IHT form if loss on sale of property or shares to claim IHT refund.
- Complete CGT returns if sale of assets such as property and shares result in a taxable gain. It is the Executors responsibility to ascertain the taxable gain and settle this with HMRC.
- Prepare and submit the Clearance Application to confirm IHT paid correctly so estate can be distributed.
HOW LONG DOES IT TAKE TO ADMINISTER AN ESTATE?
It is difficult to anticipate exactly how long an estate will take to complete. When there is a property, it will only be possible to take steps to wind up the Administration of the Estate after the property is sold. On average, it would be expected that an estate which includes a property would take between nine to twelve months to complete.
There continue to be considerable delays at the Probate Registry so time estimates are subject to change. If an IHT Account/400 return is not required, we estimate the Grant will be issued within 16 weeks from submission. If an IHT Account/400 is required, it will take longer as the probate court will not issue the Grant until HMRC confirm to them the IHT Account/400 has been received (HMRC take at least 20 working days).
HELP US TO HELP YOU
The more details you provide at the initial meeting, the more accurate our fee and time estimate will be. You should provide:
- Details of all assets, liabilities and income;
- Details of any gifts made by the deceased;
- Up to date details of beneficiaries named in the Will;
- Highlight any issues which you believe may arise with other beneficiaries, or family members, which have not be included in the Will.
FACTORS WHICH MAY IMPACT ON FEES AND TIMESCALES?
There are many factors which may arise that can delay administering an estate, which may also impact on our fees. In many cases our knowledge and expertise means we can pre-empt these and take these factors into consideration from the outset. The more detail we have at the beginning, the more accurate our advice and precise our fee and timescale quotes will be.
There is always a chance unforeseen matters arise. Thankfully, if this does occur, our experience means we understand what is required to help resolve such matters as quickly as possible. It also means we can be immediately clear what, if any, changes this may make to fees and timescales.
An intestate estate is one where the deceased did not leave a Will. While many intestate matters are similar in regard to the assets, they may have more beneficiaries so it may take more work to ascertain all the beneficiaries and calculate their shares.
Intestate estates often take longer to deal with than when there is a Will as there is no legal authority to deal with certain assets until the Grant is issued. For example an Executor(s) of a Will can begin marketing a property for sale straight away if they wished; this is not the case with an intestate estate.
Foreign assets need to be valued for England & Wales probate and Inheritance Tax. Clearly this may take some time to arrange.
It will most likely be necessary to instruct a lawyer who is qualified in the jurisdiction where other assets are. We have a panel of legal firms we use in such circumstances.
Charities rely heavily on legacies under Wills. They understand their rights as beneficiaries and will always look to protect those rights. Charities request details of the assets and liabilities in the estate from the outset and as the administration progresses. Many charities expect to be consulted on the sale of property and, in some cases, will want to give their approval to an agreed sale.
As charities have their own taxable status, they insist that all relevant taxes when dealing with an estate are dealt with correctly. This includes IHT, to which their proportions are exempt, as well as income tax and capital gains tax. Charities can reclaim income tax that is paid by the estate. Executors must calculate and pay the income tax due to HMRC but must then account to the Charities what income tax has been paid as part of their income entitlement from an estate so they can claim it back.
Charities will expect assets to be appropriated to them to avoid CGT.
Charities will also expect to receive detailed estate accounts towards the end of the administration for them to approve before the Administration of the estate is completed.
DWP Recovery from Estate Claims
If the deceased was in receipt of a means tested benefits, such as Pension Credit, the DWP will make enquiries to ensure the deceased was correctly entitled to this benefit. The DWP may request we obtain historical data from the deceased’s banks etc. This can delay completion of the estate and lead to more time spent dealing with the matter. These claims often take many months to resolve.
HMRC – IHT, Income Tax and CGT
HMRC may raise queries regarding Inheritance Tax. These could relate to the valuation of assets such as property and its contents, or the share valuations submitted. HMRC may also query claims for exemptions, reliefs or allowances, and request further details of lifetime gifts and lifetime Trust arrangements.
HMRC can request full income tax returns be prepared for the period to the date of death as well as the administration period of the estate; both of which are the Executors responsibility. At the very least Executors need to account to HMRC for income tax to the date of death and the administration period.
If capital assets are sold as part of the administration, Capital Gains tax may be payable from the estate.
Disputes & Claims against the Estate
If disputes arise between Beneficiaries, or other parties, then time will be expended to resolve matters and to defend or admit claims against the estate.
In some cases individuals bring claims against an estate if they believe they are inadequately financially provided for. Such matters require additional work and will delay the administration.
Disposal of Assets
In some cases property sales may fall through, or, due to the type of property the property may be difficult to sell.
The sale or transfer of shares and similar investments can occasionally be difficult to complete if all the paperwork is not present, or up to date and duplicate documentation is required.
DISBURSEMENTS & OTHER LIKELY PAYMENTS
In addition to our fees, there are third party disbursements and other payments payable from the estate. These will, or may, include:
- Probate Court Fee - £273 plus £1.50 per additional copy of sealed Grant of Probate obtained;
- S27 Trustee Act Notices – placing adverts for creditors in the London Gazette and sometimes a local newspapers (to protect Executors/Personal Representatives).
- Fees vary between £100 to £400
- Bankruptcy Searches and confirmation of ID of beneficiaries to comply with Anti Money Laundering requirement on beneficiaries (Executors/Personal Representatives have a duty to carry out these searches before distributing the estate).
- Fee vary between £15 to £30
- Estate Agent fees;
- Conveyancing Fees;
- Ongoing Building Insurance;
- Ongoing utility fees;
- Professional asset valuation fees as may be required;
- Inheritance Tax;
- Income Tax.
Other disbursements may be payable and we will advise you accordingly.
ACCREDITATION & REGULATION
Not all providers of this service are regulated to the same extent as Norrie, Waite & Slater Solicitors.
Our fee earners are either solicitor qualified or fully qualified members of the Society of Estate and Trust Practitioners (STEP).
Norrie, Waite & Slater Solicitors are regulated by the Solicitors Regulation Authority (SRA). In the unlikely event that there are issues that cannot be resolved with us matters can be taken to the Legal Ombudsman.
While we hope you will never have to utilise either of these organisations, it demonstrates the tight regulatory framework in which we operate, which does not apply to all providers of Probate and Administration of Estate Services.
Once we have a better understanding of the specifics of the estate in question, we will be able to provide you with a detail of our fees. In most cases our fees are based on a percentage of the gross estate. The percentage is usually between 1% to 1.5% of the gross estate value.
In some cases, we will carry out the work on a fixed fee.
There are some rare cases where many issues may arise - e.g. a likelihood challenges may be made about the validity of the deceased’s Will, or claims brought against estate, or where the extent of the work cannot be ascertained from the outset. In such matters we will charge based on the time it will take to administer the estate based on the fee earners hourly rate:
- Kark Taylor - £240 per hour
- Andrew Raftery - £220 per hour
Our minimum fee to administer an estate is £2,250.
All the fees quoted are subject to VAT at 20%
As all estates are different, the only way we can provide a quote is by arranging a FREE APPOINTMENT with us.
In all cases, we will confirm our fees in writing with you for you to confirm agreement before we begin acting on your behalf.
GRANT OF PROBATE APPLICATION ONLY SERVICE
As well as a full estate administration service, in some cases we provide a “Grant only” service. This option can be utilised where records are in good order and it is possible to identify assets and value of the estate at an early stage.
Instructing us on this basis is limited to preparation of the Legal Statement through the MyHMCTS portal and correspondence with the Probate Registry.
This does not include administering the estate, the levels of service or the additional aspects we provide when instructed to administer the estate.
Our fees for this service are currently fixed:
- Excepted Estate - £700 plus VAT
- IHT 400 required - from £1,250 plus VAT
- Probate Court Fee of £273 plus £1.50 per additional copy Grant.
Norrie Waite & Slater solicitors are experts in dealing with the legal and financial work involved with a deceased person's estate.
The paperwork involved can be daunting and quite complex, involving inheritance tax, income tax and many other financial considerations. Our experienced team can remove this burden from you during this difficult time and ensure that the wishes of the deceased are carried out as quickly and efficiently as possible.
What is Probate?
Probate is the term commonly used to mean applying for the right to deal with a deceased person's estate. Someone will need to apply for "grant of representation" to enable them to deal with the person's affairs.
The legalities vary depending on whether or not the deceased left a Will.
If the deceased left a Will.
Executors will be named in the Will and they will be responsible for carrying out the wishes of the deceased. The executors have to apply to the probate registry for "grant of probate" which is a legal document confirming that the executors have the legal right to deal with the deceased's affairs. This document is required to deal with the person's property, finances and possessions.
If the deceased did not leave a Will.
If someone dies intestate a relative will need to apply to the probate registry for "grant of letters of administration" which gives them the legal authority to deal with the person's estate.
Our probate solicitors can deal with applying for grant of probate or grant of letters of administration on your behalf.
Is Probate (or grant of representation) always required?
In certain circumstances it is not necessary to apply for grant of representation. You should always seek legal advice to ascertain if this applies to you and to avoid any legal problems as a result of mistakenly not applying for grant.
As a general rule a grant is not required when everything the deceased owned was held in joint names with their spouse and they are the sole beneficiary.
It is also not usually necessary to apply for grant when the deceased has an estate of low value, for example a bank account containing less than £5000. If the deceased held shares or substantial savings or a property then grant is always required.
Administration of a deceased estate
Dealing with the administration of an estate can be time consuming, depending on the size and complexity of the person's affairs.
The deceased's assets and liabilities need to be ascertained, their debts settled and their position calculated for income tax and inheritance tax. Assets such as savings, investments, shares, property and insurance policies all need to be taken into account to enable the estate to be dealt with properly and the assets distributed to beneficiaries. Our team are experienced in administering all types of estates, from the straightforward to the most complex. Contact us to speak to one of our solicitors who will be happy to assess your situation and provide you with an estimate for the work to be carried out.