Tony Crocker

Tony Crocker is Director of IWC Estate Planning & Management Ltd. With over 15 years’ experience, he is knowledgeable and proficient in all matters regarding Probate, Will writing, Estate Planning and Inheritance tax avoidance. In addition, he has a wealth of experience in dealing with estate settlements and issues with the capital taxes office in the event of bereavement. As a member of the Society of Will Writers & Estate Planning Practitioners, he is widely respected within the field, having helped many people at difficult points in their lives through complex probate and tax issues. Tony Crocker

Legal Services Board Recommendations Concerning Fixed Fee Probate

 Legal Services Board Recommendations Concerning Fixed Fee ProbateThe Legal Services Board has made proposals for stricter regulations for companies offering probate services. This has stemmed from growing concerns about probate fees- specifically excessive costs and deficient information regarding fees and unclear pricing and over-pricing. In contrast to fixed fee probate services (such as those offered by IWC Ltd.), consumers are being forced into paying extortionate hourly rates and snowballing charges.  
 
They are also subjected to percentage fees based on estate value – which have little relevance to the amount of work that must be done. Leading high street banks have been heavily criticised for this – a well-publicised report by the Office of Fair Trading in 2010 exposed massive differences in fees. They approached 4 leading banks and reported “For an average estate, consumers can pay between £3,000 and £9,000;” that’s £6,000 difference for the same service.
 
Another concern is fraud and theft from estates – “Regulating the probate application alone… seems to target regulation at the wrong place.” They state that the tight focus on the probate application leads to considerable scope for fraud in the other aspects of the estate administration process.
In a recent post – we cited a shocking case where Leanne Harris of Arscotts Solicitors in Hove stole almost £500,000 from probate clients. It is reported this was to maintain a lifestyle many of us can only dream of.  She took advantage of one client, for whom she had been given power of attorney, to the sum of £65,000. Harris had no formal legal training.
 
The LSB propose that will writing and probate services should become reserved activities. In other words they should be regulated. “Action is needed to protect consumers of will-writing, probate activities and estate administration services and to promote their interests.”
 
At present, if you want to protect yourself, it is recommended to choose a fixed fee probate sstep logo Legal Services Board Recommendations Concerning Fixed Fee Probateervice by a company that is regulated by STEP (The Society of Trust and Estate Practitioners). STEP is a worldwide professional body for the trust and estate profession. 
 
If the LSB’s suggestions come into effect – they will enlist approved regulators. This would mean a criminal conviction for any unauthorised provider charging for probate or ancillary services. Solicitors will not be immune either; they too will have to demonstrate that they have the appropriate expertise to handle will writing and probate matters.
 
You can read the full LSB report here-
 
http://www.legalservicesboard.org.uk/what_we_do/consultations/open/pdf/1.pdf
 
For further reading check out the following posts –
 

Reduce Inheritance Tax through child’s pension fund

At a time when families are struggling to make ends meet, responsible parents and grandparents still need to think about the inheritance they will leave behind for their children or grandchildren, who may rely upon that funding to help them through a difficult financial phase in the future.
 
The worry is of course, that most of the inheritance you leave will be swallowed up by Inheritance Tax, but there are ways of not necessarily eliminating this tax altogether but certainly reducing the liability on your estate.
 
Currently, you can leave an estate worth up to £325,000 (including the value of your property, without any Inheritance Tax falling due. Remaining assets above this value are then taxed at 40%.
 
It often makes sense then, to try and reduce the value of your estate before you die and this is legally possible through the process of gifting to a child’s pension fund or SIPP.
 
You are allowed to make a gift to a child’s pension fund or SIPP of up to £2,880 each year, which can be spread in monthly payments throughout that year – a gift which is exempt from Inheritance Tax and which will help them out financially in the future, should they need it. Not only that, as child pension funds and SIPPs are liable to receive tax relief, this amount would be increased to £3,600 providing a valuable nest egg.

More will disputes

Disputes over wills, it seems, can affect families from all walks of life.
 
Two sisters and a brother who have inherited the Nantly’s Estate, are now locked in a fierce legal battle which will decide precisely who should inherit what portion of the estate.
 
The claimant, Lilla Pennant, says that although she was left Henblas Hall along with some land by her late mother, the execution of the will was not carried out correctly. Whereas her mother had stated that all three siblings were to inherit the estate jointly and equally, her brother and sister instead took the majority.
 
The estate includes the Hall, three farms and a number of cottages, around 450 acres of land and a 30 acre wood.
 
Although the case is still being heard in court, it appears that the contents of the will in question have been thrown into confusion by what is contained in an additional safety deposit box.
 
To avoid this unfortunate dispute, the deceased, presuming she was aware of what was contained within the safety deposit box and knew that it may cause contention with the contents of the will, should have been advised to also prepare a memorandum which would have given further detail as to who was being left what, and the reasons why.

Inheritance scams continue

A new wave of inheritance scams – this time from China, is sweeping the country.
 
Householders are receiving letters which purport to have been sent from a legal organisation, informing them that they have been bequeathed a considerable sum of money and that for more details, they should either send a fee to progress the claim or call a premium rate number.
 
Unfortunately, these letters which would under normal circumstances reach no further than the nearest bin, are proving to be attractive to vulnerable families who are having to make every penny count.
 
Remember that in the first instance, it is highly unlikely that a company will track you down with the sole intention of simply telling you that you have been left a large amount of money and secondly, that a reputable company will ever ask you to pay to get in touch or to progress the claim.
 
If you feel however, that you have a justifiable case in which to question whether you may be the beneficiary of a Will, then contact a registered member of the Heir Hunters Association who will speak to you initially free of charge and if instructed, will carry out a thorough investigation.

What Are the Average Probate Fees?

If you’re trying to decide whether to appoint someone to deal with probate on your behalf, you may be wondering what the average probate fees are. That way at least you will have some idea of the cost, before you begin.
 
Obviously, averages can be misleading and the sum you pay will depend upon the size of the estate and how complicated the deceased’s financial affairs are. But it is still useful to have some ballpark figures, so that you know what you are up against.
 
According to a survey by Sun Life the average probate fees in 2011 were £2292 and the Legal Services Consumer Panel stated that the average minimum fees on an estate valued at £270,000 is £5199.
 
Of course these are just average figures but they do give you some idea of what fees you might face. And while you may not want to think about legal fees when you are grieving the death of a loved one, it is important that you have at least some idea of the costs involved.
 
But just knowing these average figures does not take away the worry of probate fees. If you appoint a solicitor to deal with probate on your behalf, it is unlikely that you will know how much the final costs are until the process is complete. They usually charge a percentage of the estate, fixed costs for each activity they carry out, or an hourly rate.
 
The trouble is, without knowing exactly how much work needs to be carried out, it is impossible to know what your solicitor is going to charge you in advance. Hourly rates can soon mount up, with many solicitors charging as much as £350 per hour for dealing with probate. And if you are paying per activity, a simple letter could cost you as much as £100 and a phone call £30. If the financial institutions you are dealing with are not on the ball, and don’t respond to letters promptly, the probate fees could mount up incredibly quickly.
 
According to an article in the Guardian, the cost of dying had risen to £7248 in 2011. Worrying about probate fees on top of other costs, such as funeral expenses is not something you want to be faced with while you are dealing with the death of a loved one. That is why so many people now opt to use a fixed fee probate service. That way they have the piece of mind of knowing how much probate fees are going to be in advance.

Letters of Administration and Legal Costs

If a loved one has died intestate, you may be concerned about the legal costs of applying for letters of administration and dealing with their estate. The legal costs should not differ much from the legal costs for probate, which is what you would need to apply for if the deceased had made a will.
 
But costs will usually depend on how complicated your loved ones financial affairs are, and whether you deal with them yourself.
 
The basic application for letters of administration to deal with the deceased’s estate costs exactly the same as an application for probate. The actual application costs £105 and you will also need to pay £1 for a document to give to each financial institution where your loved one held their assets.
 
If you appoint a solicitor, or legal expert to deal with the administration of the estate, there will obviously be additional costs, and they could add up to more than they would have if a will had been made.
 
For example, many solicitors charge by the hour, or per letter or telephone call. And hourly fees can be as much as £350. If a will had been made, leaving the estate to only one or two people, costs would be lower than if the deceased died intestate and the proceeds need to be divided between several people. This is because the solicitor will need to communicate with more people, and whether they are charging by the hour, or £100 per letter, these fees can soon mount up.
 
Also, if a family member appeals to the courts, because they believe that they should have received a larger portion of the estate, legal fees can escalate rapidly.
 
At a time when you are grieving the loss of a loved one, the additional stress can be overwhelming. Funeral expenses are costly enough without having to worry about potentially massive legal fees and family disputes.
 
If a family member is likely to appeal or the deceased’s finances are quite complicated, you may want to hand over the responsibility of dealing with the estate to a legal expert. But if the prospect of a huge legal bill is worrying you, there are also other options.
 
Instead of appointing a solicitor, many people opt to use a fixed fee probate service instead. For a pre-agreed total fee, they can deal with the application for letters of administration, and administer the estate on your behalf. This takes the pressure of you at your time of loss, and it also removes the worry of potentially huge legal fees.
 

French inheritance laws could cause problems for expats

There are currently ripples of discontentment among expats who have moved to France, not just because of the uncertainty in its government, but due to rumours abounding, regarding the potential introduction of new French inheritance laws.
 
The two predicted moves will include reducing the amount of tax paid when assets are passed to children through inheritance, and the slashing of the Inheritance Tax free allowance in France, by up to two thirds.
 
With the former, beneficiaries could be better off by paying less tax, yet the latter indicates that thousands of people would be negatively affected by having to pay considerably more Inheritance Tax on the estate which they have inherited.
 
It is an uncertain time which has given many expats cause to question whether or not it would be more beneficial for their loved ones, if they should give up their French home and return to the UK.
 

New EU probate laws?

Probate for ex pats and those with second homes could soon become much easier, with the introduction of EU probate regulations which state that an individual can choose whether their estate should be handled by the laws pertaining to their native country, or the country in which they currently reside, in the event of their death.
 
Currently, there is often a great deal of confusion after the death of a person who resides abroad for at least part of the year, with many individuals advised to prepare wills both in England and in that country to satisfy their entire estate. However, probate law throughout European countries varies widely, which can mean that beneficiaries are sometimes both surprised and disappointed at the outcome of the probate procedure.
 
These changes to legislation would also see the introduction of the proposed European Certificate of Succession which will act as a means of ensuring that all inheritances and beneficiary rights are protected, regardless of where the death was registered.
 
This is certainly great news for relevant individuals and is likely to result in a significant drop in ensuring disputes. However, should a will not be prepared at all, estates will then be distributed according to the intestacy laws of that country, so if you have moved abroad or enjoy your second home in another country, it is essential that you have a will prepared right now.
 

What has happened to the Will?

Increasingly, due to non-traditional family structures and existing politics, adult children, friends and other relatives find that on the death of their loved one, they are excluded entirely from the probate process and have no idea if they are mentioned in the Will or not.
 
If you are in the situation whereby someone close to you has died yet no information or executory tasks have been requested from you, then it is likely that you were not named as executor of the will.
 
The executor by law needs to apply for a Grant of Probate by submitting a copy of the Will to the Probate Registry before being able to start tying up financial obligations and distributing the proceeds of the Estate.
 
However, once the Grant of Probate has been issued, you are then able to legally view the contents of the Will and if necessary, contest it.
 
If you are concerned that you are not being made aware of what is happening during the probate process, then it is vital that you contact us as soon as possible. If the Grant of Probate has been issued, we will be able to provide you with a copy of the Will and, if you act quickly, begin with proceedings to contest the document.

Fixed Fee Probate and Genealogy

Following on from a recent post which highlighted the problems in the heir hunting industry; high probate fees and lack of regulation – Here’s a more in depth look at probate genealogy fees.
 
An independent poll was conducted by market research company, Opinium, amongst 2,161 members of the general public. They found that people could be handing over as much as £10 million a year to heir hunter firms. The average amount charged by heir locators is 20% of the inheritance. 40% of people found by heir hunters felt under pressure to pay. 
 
Sadly, genealogy fees tend to be out of proportion to the amount of work that’s actually involved. Many heir hunters calculate their costs as a percentage of the estate value. Whereas, an hourly or fixed fee probate rate is a much fairer system. 
 
In many cases, solicitors appoint genealogists to seek out missing heirs. Therefore, they too have a responsibility to ensure estates only pay fair fees that reflect time spent on research. 
 
STEP (the Society of Trust and Estate Planning) issued a briefing note to its 6000 members to explain genealogical research fees; fixed fee probate, time based and contingency fees.   Here are a few excerpts-
 
“It is good practice to obtain a range of quotes from genealogists and you should be fully aware of the different options available.”
 
Fixed Fee Probate – “Fixed fee options are set fees agreed in advance and in some cases may be payable only if a pre-determined goal is achieved.”
 
Time-based fees – “Time-based fees are charged according to the actual time spent, normally on a per hour basis, which is recorded and billed.”
 
Contingency Fees – “once the genealogists have undertaken the research, they come to an agreement with each beneficiary they identify; whereby the beneficiary agrees that the genealogist is to be paid a share of their entitlement when the estate is distributed.”
 
Many heir hunters charge contingency fees as a percentage of the inheritance as their fee.  This can amount to charges that are out of proportion to the value of the service they offer. After all, they’ve used information that’s available freely on Government websites.
 
If you’ve been contacted by an heir hunting firm and are faced with an excessive finder’s fee. Seek independent legal advice before you sign anything. Beware that some companies may apply excessive pressure or shock tactics to get you to commit. Put your foot down and do your own research – you could save thousands.

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