Probate and the Administration of Estates

When someone dies, the money, property and possessions which comprise their estate have to be dealt with and distributed according to the wishes in their Will, or if there is no Will, the legal rules for dealing with such a situation which are known as the Intestacy Rules.

The person or people responsible for this are either those named as Executor(s) in the Will, or if there is no Will, the people entitled to the deceased’s assets under the Intestacy Rules.  In either event, they are called the Personal Representatives (PRs).

Commonly the PRs will need to apply for a Grant of Representation, which is a Court order confirming that the Will (if there is one) is valid and that they are the people who are properly authorised to administer the deceased person’s estate.

The PRs’ authority derives from the Will or Intestacy Rules but often third parties such as banks and share registrars will ask to see a Grant before they will release any of the deceased’s assets to the PRs.

The duties of the PRs are to:

• Gather in and safeguard the estate assets;
• File the Inheritance Tax returns and pay all tax due;
• Finalise personal Income and Capital Gains Tax returns both to the date of death and for the administration period;
• Pay the proper debts of, and charges against, the estate; and
• Distribute the balance in accordance with the terms of the Will or the Rules of Intestacy.

If the PR does not pay all the debts or gets the distribution wrong, he or she can be sued and may be personally liable for any debts due, including tax liabilities.

The Grant of Representation is the Court’s confirmation of the authority of the PRs. A Grant of Representation is generally needed if the deceased:

• Owned any ‘real property’ – a house, flat, or land – in his or her sole name, or as tenants in common with someone else;
• Held assets typically worth £5,000 or more with a financial institution (the exact threshold varies between institutions);
• Owned a shareholding of any size; or
• Was a beneficiary of a trust during his or her lifetime.

Administering someone’s estate involves a series of linked legal, tax and administrative activities that must be carried out in order for it to be completed correctly and efficiently.  It involves communication with many parties including the Court, HM Revenue and Customs, and all related financial institutions.

Care and attention must be taken at every stage of the process to avoid mistakes – for example, failure to file tax returns by the relevant deadlines – as the PRs will ultimately be liable for these.

To help your understanding, we would recommend an initial meeting with one of our specialist private client solicitors.  This would be free of any charge or obligation and is designed to assist you to:

• Fully understand the role of the Personal Representative;
• Appreciate the process of administering the estate and what the likely timescales might be in your case; and
• Understand how we might be able to help you either in part or full, with the estate administration and how you may benefit as a result.

After the meeting we will write to you outlining the role we would play, the services we would provide and the associated fixed prices.  Our contact and office details are at the back of this leaflet.  Home visits are also available if required.

Service Lead by Qualified individuals – one of our Solicitors or Chartered Legal Executives will be your main point of contact throughout the process.  They will be assisted by their support team of secretaries and other qualified individuals where further specialist input is needed.

Meeting with you – At least two in-person meetings would be anticipated: one initial meeting to discuss the estate administration process, terms of the Will/intestacy provisions and the assets and liabilities of the estate, and another to review the Inheritance Tax submission and application for Grant of Representation to ensure you are happy with the declarations you are making and everything is, to the best of your knowledge, accurately disclosed. We can also if you wish hold a final meeting to review the estate accounts and distribution of the estate once the accounts are prepared in order to ensure you have no queries.

Communicating with you and others – all communication with you, beneficiaries, asset holders, HM Courts and Tribunal Service (HMCTS) and HM Revenue and Customs (HMRC) by telephone, email and letter is included, provided this remains reasonable and proportionate to the nature of the matter.

Review and validation of the deceased’s Will – we will review the Will (and any other documentation relevant to the estate) with you in the initial stages of the administration of the estate.  We will advise of the interpretation of the clauses within the Will, and whether any further clarification is required from the Will drafter.

Intestacy Rules – if there was no Will or any part of the Will has resulted in a full or partial intestacy, then we will advise you about / as to who is entitled to take Letters of Administration and on the distribution of the estate in the circumstances.

Date of death valuations – we will contact all asset and liability holders (or their agents) about which you advise us for date of death balances to complete the Inheritance Tax return.

Applying for the Grant of Representation – we will prepare the documentation required for the application of the Grant of Representation (a Grant of Probate where there is a Will and at least one of the named executors applies for a Grant and a Grant of Letters of Administration in other circumstances).

Income Tax: tax year until the date of death – we will deal with any Income Tax affairs for the tax year of death. Should a self-assessment tax return be required, we can do this at an additional charge.

Inheritance Tax (compliance work) – we will complete all Inheritance Tax forms and, if required, arrange payment of Inheritance Tax from the estate (including any interest that may have accrued). If funds are not available, we will advise you accordingly. In some cases, HMRC will conduct a “compliance check” on an estate, and we may raise an additional charge for dealing with their further queries.

Closing accounts – we will send the Grant of Representation to banks, mortgage companies and anywhere else you believe the deceased had an account, policy or debt. Where applicable we will arrange closure of accounts and collect funds.

Settling Liabilities – we will arrange for the estate to pay any outstanding funeral expenses and other debts payable from the estate of which we are aware. about which we are made aware.

Selling and transferring assets – we will arrange to sell shares and other assets. If any assets can be transferred, we will liaise with beneficiaries to obtain instructions. If there are insufficient funds in the estate to settle debts and expenses then we will discuss with you which assets are to be liquidated in order to provide cash funds to meet these outgoings.   If the sale of assets is likely to lead to a Capital Gains Tax liability for the estate we may advise the executors if there is a way this can be mitigated (see further charges below for more information).

Payment of monies to beneficiaries – we will arrange payment from the estate to beneficiaries and where we can, we will consider with you the possibility of making interim payments. We will undertake bankruptcy searches on all beneficiaries (who are based in the UK) and carry out ID verification as appropriate given the value of their respective entitlements.

Setting up (or disbanding) Trusts in a Will – where applicable we will set up and formalise any Trust in the Will and register the Trust with HMRC. We can assist with ongoing Trust work at an additional charge. Any work required in relation to lifetime Trusts or Trusts from a predeceased spouse’s estate would be an additional cost to the estate.

Transfer of property – If the property is to be sold or transferred to beneficiaries, we will introduce you to our residential property team who will be able to assist with the sale or transfer. If the property is not registered at Land Registry, first registration will be required. This will be an additional cost (plus Land Registry fees).

Utilities – where instructed, cancelling or transferring any utilities associated with the deceased’s unoccupied property provided that the utilities were registered in the deceased’s name at the date of death.

Income Tax: Period of Administration – we will report to HMRC on any taxable income we receive as part of the estate administration. If you or one of the beneficiaries is receiving income from estate assets (such as rent on a property) this needs to be reported to HMRC, which we can do at an additional charge.

Producing Estate Accounts – we will send these to our client for approval and to the residuary beneficiaries at the end of the process. You should keep these as a record of how the estate was distributed.

Probate registry fees – fees are governed by HMCTS and may be subject to change (currently £273 plus £1.50 for each sealed copy)

Official Copies for properties owned by the deceased – this is the HM Land Registry document that confirms property ownership and provides a plan of the property to confirm the boundaries (£6 plus VAT at the current rate of 20% per property)

Transferring funds to beneficiaries – we will transfer funds by bank transfer at no additional cost. However we will charge to the beneficiary bank fees for transferring money to them if required to be paid by same day transfer. Fees are governed by our bank and may be subject to change.

Certainty Will search – we recommend a search for every UK estate we deal with via Certainty (the national Will register) to ensure we are working with the latest Will. We consider this search essential for intestate estates (where no Will has been found) but it is usually wise to conduct this search even when there is a Will.

Specialist buildings insurance – insurance for any vacant property (excluding business property) owned by the estate.

Legal advertising – (known as section 27 Trustee Act 1925 cover) – we will ensure protection for the Personal Representatives by an appropriate public advert or cover by insurance.

RICS Surveyor open market property valuation (residential property) – valuation provided by a chartered surveyor for any residential property in the estate.

Chattel valuations – third party valuations of furniture and possessions for estates subject to Inheritance Tax.

Postal redirection – redirection of post through Royal Mail.

Depending on the specific details of the estate, there may be additional work to be undertaken and this will be charged for separately. Some of this work may be carried out by a third party. This may include, but is not limited to:

Affidavit/Statements of truth – we will prepare the necessary documentation if further verification of a Will or other aspects of the estate is necessary.

Birth, Marriage, Death Certificates and Decree Absolute – we regularly need these documents to satisfy HMRC regulations to claim all the relevant allowances and/or to prove entitlement to the estate. If the family is unable to provide these, we will order copies.

Capital Gains Tax – if any Capital Gains Tax (CGT) is payable due to any gain made on any asset within the estate we will prepare a calculation and liaise with the beneficiaries about this. More work will be required if the gain relates to a property being sold. Please note – a capital gain on the estate can impact on a beneficiary’s personal tax position. We will provide you with further information on this point. Unless instructed otherwise, we carry out any sale of a property on behalf of the estate, and utilise only the estate’s CGT tax free allowance.

Contentious work – this is where there is a dispute on an estate. If an estate becomes contentious then we will charge an additional fee to cover the cost of us providing the specialist advisors with information about the estate and answering any questions they may have. There will then be a further monthly charge to cover the ongoing cost of liaising with and updating the advisors, until such time as the dispute is resolved.

Conveyancing – we will carry out the legal work on behalf of the estate selling the property.

Notice of Assignment – we will prepare the document to transfer the ownership to beneficiaries for either

• Life Insurance policy/ies
• Leasehold property/ies

There may be an additional fee for registering the above.

Department for Work and Pensions (claims) – Additional work we have to do to agree and satisfy any outstanding amounts. The cost will vary dependent on the complexity of the work required.

Estate planning for beneficiaries – we stand ready to advise beneficiaries on their Estate planning as the receipt of an inheritance is often aan opportunity to undertake tax planning and review Wills.

First registration of property – we will arrange for the title deeds to be sent to Land Registry for first registration. Land Registry charges will also apply and vary depending on the value of the property.

Income Tax work (Additional) – for any number of years prior to death.

Inheritance Tax – Compliance Check – we will carry out the work required to address any additional queries or requirements of HMRC in respect of the Inheritance Tax submission.

Inheritance Tax – insufficient funds – where an estate does not have liquid assets to pay the required Inheritance Tax, there may be additional charges in additional submissions to HMRC, or liaising with external finance providers.

Instrument of Variation – if requested, we will prepare an Instrument of Variation to redirect the entitlement under the estate.

Leasehold or Management fees – the estate may have to pay such fees in relation to a property to effect transfer to beneficiaries.

Land Registry fees – for properties to be transferred to the beneficiary/ies which will vary depending on the value of the property.

Missing beneficiaries (genealogical research) – we can instruct tracing agents to identify or locate any unknown or missing beneficiaries to an estate where this is necessary.

Overseas asset repatriation – selling assets such as property and accounts that are located in a jurisdiction other than the UK.

Property marketing (Estate Agency) – any Estate Agents’ costs for selling any property included within the estate.

Reconstruction of Title Deeds – if the Deeds of a property cannot be found and they are not already registered with HM Land Registry, reconstruction of the Deeds will be required.

Share indemnities – required where the deceased held shares but the certificate cannot be located.

Trusts (lifetime) – Any work in relation to a Trust that has been created during the lifetime of the deceased.

Trusts (ongoing management) – we can act as an ongoing trustee and advise on the ongoing trust administration but at additional charge.

Trusts (Pre-deceased spouse/civil partner) – Any work required in relation to a pre-deceased’s estate or Trust.

Unknown claims protection – we can, where necessary, arrange specialist insurance to provide protection to the executors and beneficiaries for 10 years against certain claims from unknown parties that did not come to light during the administration.

Valuation and administration of businesses and agricultural property – valuations are required for estates subject to Inheritance Tax.

Valuations for taxable estates – if a property is of an unusual nature (or HMRC are unwilling to accept the valuation provided) we will need to obtain a specialist valuation.