Probate, the process of dealing with someone's estate
(property, possessions, cash, savings) when they pass away, can be
applied for without seeing a lawyer, but it's not without
risks. Official statistics indicate that the number of claims
against executors for breach of fiduciary duty (in other words
"getting it wrong") has more than tripled in recent
years. There is speculation that this increase is linked to the
rise in DIY probate.
Don't be tempted to deal with probate or the administration
of an estate yourselves.
There are various factors to consider before deciding whether or
not to handle the process yourself. These factors can include
Acting as an executor does not come
without responsibilities. An executor is responsible for dealing
with large sums of money, discharging debts and liabilities, some
of which you might not know about and preserving the estate for the
The Will itself can be complicated.
If it has been prepared by a lawyer then it may include legal
language which is based on law developed other hundreds of years.
What you think the Will says may be different to what it actually
says. Many professionally drafted Wills contain trusts; to save
inheritance tax, to avoid those who inherit paying care fees and to
reduce the likelihood of potential disputes. These types of trust
can be complicated to administer and to understand all of the tax
implications when deciding how to deal with them.
An executor is often personally
liable for compensating a beneficiary who has suffered a loss. This
may be due to the Will being misunderstood, a decision that has
been made having a negative tax impact or assets in the estate
losing value due to delay. These are a few of the many things that
can go wrong when dealing with an estate.
Beneficiaries can look to amend their
entitlement under a deceased's Will after the death, under the
current inheritance tax rules. This might not always be known or
obvious to the lay executor or beneficiaries. There can potentially
be negative inheritance tax consequences which can be addressed by
such a variation and spotting this in time is crucial.
In many cases an inheritance tax
return will be required and the executors will need to account to
HM Revenue & Customs for this. These accounts can be
complicated even in what might appear to be the simplest estates.
The penalties for an incorrect return can also be severe. When was
the last time you volunteered to complete a tax return?
Dealing with a person's estate
can be a time consuming business. An experienced lawyer will know
the process well and can get on with the administration of an
A lawyer is also independent and
allows an executor to keep beneficiaries at 'arms length'
and can assist an executor in managing beneficiaries' demands
and any conflicts that may arise.
Inheritance tax should not be the
only tax you consider when administering a person's estate. At
various stages of the administration there may also be capital
gains tax and income tax matters to take into account. In
particular there are often significant Capital Gains Tax savings to
be made before selling a person's home. An experienced lawyer
should identify these and help the executor and beneficiaries take
advantage of these tax planning opportunities.
Finally, by using a reputable lawyer,
an executor and the beneficiaries are afforded additional
protection. A lawyer should retain any monies on behalf of the
estate in a client account. Solicitors are required to hold
professional indemnity insurance are regulated by the Solicitors
As elderly client specialists, we are
also able to add value for example by identifying cases where money
is owed to the estate for care funding which should have been met
by the NHS and we can assist in making a claim on behalf of the
In all but the most straightforward cases, it is important to
seek timely specialist advice to save money and worry. Executors
carry a certain amount of personal liability in their role and they
can open themselves up to substantial legal claims if they are
unaware of the law and their obligations.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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