Legal Fees – Complex Estates

Our legal charges for administering complex estates will be based on the amount of time it takes to complete the administration – an hourly rate of £200 plus VAT will apply. We will review the amount of time expended at regular intervals and if at any point it becomes clear that more hours work than previously estimated will be required we will let you have a revised estimate of the likely charges to conclude the administration. It is not always possible at the outset of our retainer to provide you with an estimate of the total number of hours work required in order to deal with the administration. Where we cannot provide you with an initial estimate of the likely charges we will, for budgeting purposes, set a costs limit on the file such that we will not carry out more than 15 hours work (equating to fees of £3,000.00 plus VAT) without further reference to you. Once we have obtained the grant of Probate we should be in a position to provide you with an estimate of the number of hours work required to complete the administration.

For complex estates where the responsibility is greater there may be additional charges based on the value of the estate – if value charges are to be made in addition to the usual time based charges we will always detail the same in our Terms of Business so that you are fully aware of the same.

In addition to our legal charges certain payments to third parties may be required. These are referred as “disbursements”. The disbursements we can predict are as follows:-

• Commissioner’s fees for swearing of the Oath – these are generally £7.00 per Executor.
• Probate application fee of £155.00 (see Note below)
• If additional copies of the Grant of Probate are required, they will cost £1.00 per copy. It would be normal to obtain official copies of the Grant based on the number of assets within the Estate so if there were 5 assets, 5 additional copies would be ordered at a cost of £5.00.
• (Where necessary) Statutory advertising to protect the Executors from claims made by unknown creditors – this can cost between £100.00 – £150.00

Any tax payable (i.e. Inheritance Tax, Income Tax and Capital Gains Tax) will be additional to our legal charges.

Important Note – Probate Fee Increase – From April 2019 Probate Application fees are to be substantially increased – there may be ways of avoiding the increased fees and if you would like to discuss that with us, please contact our Mr Hughes.

The following represents a non-exhaustive list of the kind of issues which can increase the amount of time we expend and, therefore, the level of the legal charges we will make in relation to the administration of the estate overall:-

• Cases where there is no Will.
• The Estate includes any shareholdings (stocks and bonds).
• Estates where this is a foreign element.
• Estates where there is likely to be significant income during the administration period because the estate includes income-producing assets e.g. investment property, sizeable share-holdings, etc.
• Often if an Estate includes shareholdings or other appreciating assets, capital gains issues will have to be considered and to the extent that disposals of Estate assets in any one tax year exceed the available annual exemptions, steps may be required in order to mitigate CGT charges.
• In the case of married couples the Will may have been drafted before the introduction of the transferable Nil Rate Band such that a Discretionary Trust arises at the point where the first death occurs. Implementation of a Discretionary Trust or the amending of the same so as to bring in the transferable Nil Rate Band is a complex exercise – in these situations any estimate we give you for the time involved may be increased to reflect the extra work required in these regards.
• If a Deed of Variation is to be put in place (e.g. for tax planning purposes) we will provide you with a separate estimate for our work in relation to the preparation and completion of the same.

Stages of the Process

The steps required to administer the estate will include:-

Valuing the Estate

Once you have provided details of the Deceased’s assets we will write to the companies concerned (banks, building societies, insurance companies etc) to obtain probate values for inclusion in the Inland Revenue account. It is difficult to estimate how long this stage will take, as we are dependent upon the turnaround time of third parties but normally most of the financial information will be received within 4 – 8 weeks of your passing the papers through to us.

We will also (where appropriate) contact the funeral undertaker, utility companies and anyone owed money by the deceased to let them know that we are handling the administration of the estate and that we will settle any liabilities when the estate is in funds.

Contacting the Beneficiaries

We usually write as soon as possible to all the beneficiaries named in the will, or to those family members entitled on an intestacy, to tell them of their legacies and entitlements. Sometimes it can be difficult to trace beneficiaries from the (sometimes scant) details contained in the Will or, in intestacy cases, where remote relatives are benefiting – in these kinds of situations delays can occur. Where it is necessary to instruct a genealogist, the costs of any such instruction will be an additional disbursement payable by the Estate.

Inheritance Tax?

We do our best to tell you as quickly as possible whether or not there is likely to be any inheritance tax to pay and, if so, advise on how the tax is to be paid. Arrangements will have to be made to pay any tax due at the same time that the probate application is submitted – usually banks/building societies will release funds for the purpose of covering the tax liability.

Applying for the Grant

Once we have valued the estate, we will prepare the application for the Grant. This is made up of an Inheritance Tax Return and an Oath or Statement of Truth. We try to complete the preparation of the Probate papers promptly and will contact you as soon as we are ready to go through the paperwork with you and obtain your execution of the same.

The Probate application is then lodged at the Probate Registry. The Grant is usually issued within 2 – 3 weeks of our receiving a form from HMRC confirming that they agree that no tax is payable or, if tax is due, confirming that tax has been paid.

Calling in the Assets

Once the Grant has issued we will call in the deceased’s assets. This will, typically, involve closing bank accounts, cashing in investment products and selling shares. In some cases the beneficiaries will prefer to retain assets and in these situations we will arrange for in specie transfers under which assets (e.g. shareholdings) are changed over into the names of beneficiaries. We will attend to any conveyancing that may be required in respect of the deceased’s home or other properties forming part of the Estate.

We will also ensure that the deceased’s personal tax affairs are brought up to date and obtain any refunds that may be due from HM Revenue & Customs. We will also deal with administration period tax liabilities.

All the estate monies are kept in our client account in the names of the Personal Representatives and will be subject to the protection of the stringent rules imposed by the Solicitors Regulation Authority. If any estate monies come into your hands you should send the same through to us straight away so that all estate monies can be properly accounted for and then properly allocated between the beneficiaries.

Preparing the Estate Accounts

Once we have called in all the assets we will prepare Estate Accounts for approval by the Personal Representatives and beneficiaries. The accounts contain a detailed summary of all assets, liabilities, expenses and income and show exactly what each beneficiary will receive from the estate.

Where the administration of the estate becomes protracted we will aim to send out interim estate accounts to the personal representatives and also to each of the residuary beneficiaries so that all interested parties can be made aware at an early stage of the make up of the estate and the likely level of the entitlements.

We will aim to prepare final Estate Accounts for signing off by you as soon as all the assets and liabilities of the estate have been quantified.

Distributing the Estate

As soon as the accounts are approved by you and all the residuary beneficiaries we will distribute the estate. This will normally involve paying over to the beneficiaries their entitlements or transferring assets out of the estate into the names of the beneficiaries. If the Will creates trusts, we will arrange for such trusts to be set up.

How long will it take?

The length of time taken to obtain a Grant and administer an estate can vary significantly and depends on the value and complexity of the estate, the number of beneficiaries, the provisions of the Will, whether or not any assets are located outside of England and Wales and whether or not there is an inheritance tax liability. It would not be unusual for the administration of a complex estate to take between 6 – 12 months.

One common reason why the administration of an estate can be delayed is because the estate includes a house or a flat and it may take some time (particularly when the housing market is in a slump) for a buyer to be found. Please be aware that it is sometimes possible in advance of a property sale going through for interim payments to be made to beneficiaries.

Delays in the administration can also occur where a dispute arises between beneficiaries – a family member may for instance believe that the Will has failed to make adequate provision for him or her: in this kind of case it will not be possible to distribute the estate until the claim of the disappointed person has been dealt with.

Distribution can also be delayed if the Department of Work and Pensions brings a claim in respect of an overpayment of benefits (such as Pension Credit or Income Support) made to the deceased during his or her lifetime. Sometimes it can take several months to resolve such a claim.

We will keep you informed of any problems that arise during the course of the administration which are likely to cause significant delay and will do our best to resolve any such problems as quickly as possible.