Probate Fees

How to avoid new probate fees

How to avoid new probate fees

With government proposals underway to alter probate fees from fixed to banded, hundreds of families could be faced with a bill of up to £20,000 after their loved one dies.

To avoid passing on this potentially significant financial debt to their next of kin, many individuals with assets tied up in property are seeking ways to avoid probate.

One such way of doing this could be through a living trust.  This allows the owners of a property to pass it on much more simply to their beneficiaries, without any need to register for probate.

Either married couples or single people can sign a declaration of trust, thereby becoming a trustee or co-trustee.  Once this is in place, the property in question can then be transferred from current names to the trustee(s).  In this way, the owners still retain ownership of the property but this is now through the living trust.

Once all trustees are deceased, the property then passes to the person or persons specifically named within the trust document as successor trustees.  This is often a fairly simple and fast process which does not require a probate application, thereby saving potentially thousands of pounds, depending on the value of the property in question.

It is worth noting that living trusts can be revoked, so if an individual has been named as a successor trustee but the owner trustee changes their mind further down the line for whatever reason, they can alter the trust or cancel it altogether, should they later decide to sell their home.

Remember however that although a living trust can help to avoid probate with regards to the property included in your estate, there may well be other cash and assets which need to be dealt with separately.  Under the new government proposals, if these are valued at less than £50,000, they will not be subject to probate legislation.  However, to ensure that they are passed to your chosen beneficiaries, a will should also be drafted, giving your precise instructions.

#iwcprobate #bereaved #probate

“Government increasing taxes on death” says probate expert

"Government increasing taxes on death" says probate expert

probate Government increasing taxes on death says probate expert

Government proposals to alter fixed rate probate fees to a banding system has been called "inheritance tax by the back door" by probate specialist, Tony Crocker of IWC.

The fixed fee for probate applications rose recently – a move, said the government, which was deemed necessary to fund additional administrative work carried out by the Probate Service.

These new proposals however, which are out for consultation until 1 April, would see probate fees being charged on estates valued in excess of £50,000 according to a banding system.  Fees would then start at £300 for estates valued between £50,001 and £300,000; up to £20,000 for estates valued above £2 million.

YM EstateValue Government increasing taxes on death says probate expert

Currently, estates under £5000 are not subject to probate legislation and the government plans to raise this threshold to £50,000, meaning that according to its figures, over half of estates would pay no probate fee at all.

IWC questions the validity of this view however, with the average London house price now standing at over £500,000.  It is these house prices, the company claims, which will cause problems for executors faced with paying money up front for probate fees, funeral fees and inheritance tax at 40% – and not enough money in the deceased's bank account to cover them.  These executors will be forced to offer up the remaining funds themselves or, as the government suggests, to take out a short term bank loan, until the property sells and they can recoup the funds – which of course will attract interest rates and affect their credit rating.

Although packaged as a move to assist those dealing with smaller estates, IWC's Tony Crocker says that, in its bid to raise £250 million for the Exchequer, the government is actually "giving with one hand and taking with the other".

For anyone who suspects that their next of kin may find themselves struggling financially with these new proposed changes, they may be able to avoid probate altogether, by placing their property into trust, now.

In our next blog post, we'll outline how trusts can be a means of avoiding probate, how to create a trust and what happens to it after your death.

#iwcprobate #bereaved #probate

How much do I have to pay for probate?

Recent research by Saga has found that probate fees charged by solicitors and financial advisors vary widely, due to the common practice of naming themselves as executor whilst drawing up the individual’s will.
 
In this way, the solicitor or financial advisor can then charge up to 5% of the value of the person’s final estate – often earning themselves several thousand pounds in the process.
 
Although it is always advisable to seek the help of a probate specialist, executors should certainly shop around for probate services – particularly if the contents of the estate are relatively small or straightforward. Remember that you do not have to use the services of the person who drafted the will.
 
It is not necessary either, to use a solicitor or a financial advisor to undertake the probate process. Do some online research and seek testimonials or ask around and see which probate practitioners have provided an excellent service and real value for money.

Elements that make up Probate Costs

The application for the Grant of Probate is a requirement on any estate which is valued over £5,000. The basic fee, payable to HM Courts & Tribunals Service is £105. Special applications for a duplicate, second or subsequent grant will cost £20. This is the same price as entering a Caveat, or depositing a will for safe custody with the probate registry.
 
As with everything else, the costs involved in probate have risen. The most recent revision occurred in April 2011, based on the rate of inflation there was an increase of around 20%.  Further information on probate costs can be obtained from the directgov website. This breakdown is very useful for anyone trying to wade through an itemised bill from a solicitor, or bank.
 
Although the costs of these elements, which are paid to the probate registry, are generally quite basic, the process involved is time consuming. This will drive prices up, particularly if you are using a solicitor and paying an hourly rate.
 
Hourly charges range from £100 to around £350, plus VAT.  A Legal Services Board report in July 2011 revealed that the average UK rate was £177 per hour. The average length of time billed for estate administration was 25 hours, which totals £5310 inc. VAT @ 20%.
 
This is relatively cheap compared with banks and solicitors who charge a fee based on the estate value. This is quoted as a percentage and varies between 1% (Saga), up to 4.5% (Barclays). It is considered an unfair way of pricing as the amount the estate is worth does not bear much relevance as to the amount of work involved.
 
If you would like to get further information on probate costs you can call us free on 0800 612 6105. Lines are open until 10pm, 7 days a week.

Keeping the cost of probate down

The vast majority (about 70%) of those who need assistance with the administration of a will, turn to a professional. In many cases the firm involved may have helped with the writing of the will and been named as executors as part of this process. If so they will be responsible for administering the estate and establishing the amount that is to be charged cost of probate.
 
Probate fees are generally paid from the estate and come in on average between 2 – 5%, or between £3000-£5000. Of course these figures vary greatly depending on the size of the estate and the number of beneficiaries in the will. There are other factors which may slow the process down and consequently drive the costs up.
 
If a solicitor or bank has been employed to execute a will then there are a few key tips to be aware of in order to ensure that you keep the probate fees to a minimum.  It is worth noting that the value of the estate should have no bearing on the costs. You should request a quotation for the work in advance.  In most cases you will be told that this is impossible as there are too many variables involved.
 
It is true that there are elements of the process which may be difficult to predict, but any solicitor, or bank, that has been through the process before should be able to give you a reasonably close approximation of costs. Once they have you should insist on being allowed to find an alternative and then ask if they can match any lower price.
 
In order to ensure that the process is done as quickly and efficiently as possible make sure that you stay on top of all of the paperwork and keep meetings and other communication to an absolute minimum.
 
In order to maximise the value of the estate it is worth investing in any properties to be sold as part of the administration process. This will help ensure that the properties are sold quickly, which will keep the fees down, and should also help to realise their maximum value.
 
The best way to keep costs to a minimum is by using a fixed-fee probate service that gives you a clear price up front and a supportive service along the way. To find out more call our free advice line 0800 612 6105 open until 10pm, 7 days a week.

Probate service fees

As with many other price increases that we have seen in recent times, the basic costs of probate fees have also risen. From April 2011 the cost of probate applications went up by more than 10%. Currently the probate application fee for non-solicitors or lay applicants is £105 up from its previous figure of £90. This amount comprises £45 for the application for grant and a further £60 for the personal application which is effectively the cost of attending the probate registry.
 
Here’s a breakdown of Government will and probate fees:
 
The fee for depositing a will for safe custody in a district or principal registry is £20. The price of an inspection of a will or any other document in the presence of a registry officer is also £20.
 
An Application for a Grant of Probate or Letters of Administration, where the assessed value of the estate exceeds £5,000, is £45.  Resealing a grant costs the same.
 
A Personal application fee where the assessed value of the estate exceeds £5,000 is £60, this is essentially the cost to attend the registry.
 
A special application or duplicate/subsequent application in respect of the same person is £20. This includes an application following a revoked grant and excludes a grant limited to settled land, part of the estate, or to a trust property.
 
Copies of all documents involved have a surcharge regardless of whether they are provided as certified copies or not. For the first copy the charge is £6 and for every subsequent copy of the same document is £1 if they are supplied at the same time. If the documents are provided in electronic format the price per copy is £4.
 
You can view the Government report here which details all probate charges including searches, oaths and entering in a caveat. 
 
 
If you have any other questions about the various costs involved, don’t hesitate to call us free on 0800 612 6105

Considering Probate Costs

For anyone who has taken a taxi ride across a city, to a previously unknown destination, there is a jarring sense of uncertainty as you watch the meter ticking over. Every corner seems to add additional miles to the clock and, just when you are in sight of the destination, a one way system seems to take you further away. When you do finally get there the cost is invariably more than you had originally bargained for.
 
This analogy can also fit when considering probate costs. Although the initial costs may not seem too high there are innumerable elements in the probate process which can serve to increase the eventual cost far beyond original estimations. Among the many potential complications with the administration of probate are factors like contested wills, beneficiaries that cannot be located, or documents that have been lost. All of which will result in a hike in the overall price.
 
If you are paying probate fees to a solicitor this price increase is likely to be quite substantial. Every additional letter and document copy will be scaled in to the overall costs. There is also the costliest commodity to consider; time. In addition to the expenses caused by delays, the administration of probate happens at a very sensitive time. If the process becomes unnecessarily protracted it will not allow those involved the closure that is required at this point.
 
In order to ensure that you do not fall foul of the myriad of additional costs that you may incur during the probate process the best solution is to find a practitioner that will give you a fixed cost up front. Obviously a fixed quote will help you avoid all of the hidden probate fees that can hike the costs up beyond all expectation. This will also give you the peace of mind knowing that the process is being handled by a practitioner with expertise to complete all the required aspects efficiently.
 
To find out more about our low cost option call free on 0800 612 6105

Why consider probate fees when making your will

When you make a will, one of most important decisions you’ll make is who to appoint as executor. There are many factors that may affect your choice, the person’s age, where they live, and their relationship to you. You also have the option to appoint a professional who will take care of probate and relieve close family of the burden. It’s sometimes wise to use a solicitor if there are feuds in the family and there is a chance that disputes may occur.
 
If you don’t have any strong preferences, make sure you know exactly who the executor/s named in your will are. If you are considering allocating the task to a professional, you’ll need to be aware of the implications in doing so.
 
The will writing and probate industry is not regulated and even the most reputable high street banks are guilty of using unscrupulous practices in the pursuit of profit. A common ploy is for companies to offer cheap will writing as a loss leader, write themselves in as executor and charge extortionate probate fees. This can be as much as 4.5% of the estate value to wind up an estate.
 
Some firms say it’s compulsory, and pressurise or use hard-sales tactics to get testers to agree to write them in as executor. There have been many widely publicised cases of unwanted executors who refuse to renounce their positions when confronted by relatives about their rip-off fees. The law states that they are not required to do so and the family has no choice but to watch a large portion of the estate get swallowed up in legal fees.
 
If you are considering using a professional, protect your family by finding out exactly how much they charge for probate. The Law Society states that practitioners must give an indication of the costs of carrying out the administration of the estate.   They must also inform clients how fees are calculated; whether that’s at an hourly rate, or by a percentage of the estate.
 
If the firm tries to use the ‘how long is a piece of string argument,’ press them for an answer. To protect yourself, use a company that offers a fixed fee service so you’ll have a clearer indication of costs.

The sad truth about probate fees

It’s contemptible that when people are at their most vulnerable, unscrupulous probate providers are cashing in. Here are some of the disturbing practices that occur within the industry, highlighting why it’s important to choose carefully.
  • Practitioners refuse to quote fixed probate fees
  • Extra charges are buried in the small print
  • Grieving relatives are subjected to hard-sell tactics
  • Banks charging up to 4.5% of the estate value
  • Families are prevented from shopping around for better deals
  • Unregulated firms give out poor or misleading advice
The probate services market is estimated to be worth around £1.25 billion. Unfortunately, where there’s big business, there are mercenary practices. The most disturbing is something known as ‘baiting.’ This is where will writers offer their services as a loss leader while insisting they are named sole or joint executor of a will. When a death occurs, bereaved families feel obliged to use the services of the company and are charged extortionate fees for probate. 
 
Consumer groups have reported cases of the point blank refusal of unwanted executors to renounce their position. This is despite the fact that it is a straightforward process for someone to stand-down. However, they can then only be removed if the relatives make an application to the High Court.
 
A 2010 article titled, Exposed Banks that Prey on the Bereaved published by the Daily Mail, tells the story of John and Judy Berryman. A high street bank tried to charge more than £25,000 for probate services after appointing itself as executor when the will was made.
 
The much welcomed changes proposed by the Legal Services Board for stricter regulation of the industry cannot come soon enough.
 
To protect yourself
  • Anyone with an existing will should pay close attention to executor clauses. Check who is named and find out their charges.
  • Obtain at least 3 quotes.
  • Get a fixed fee for probate.
  • Read the small print and make sure there are no hidden extras.
  • Choose a company that’s regulated by the Society of Will Writers and Estate Planning Practitioners.
  • If you’ve found yourself with an unwanted executor, we can let you know where you stand, call us for free advice on 0800 612 6105.

What Are Non-Contentious Probate Fees?

If you have been appointed as an executor of a will and you are faced with dealing with probate, you may have heard the terms contentious and non-contentious probate fees.
 
Non-Contentious probate is defined as “non-contentious or common form probate business.” This means the business of obtaining probate and administration where there is no contention.
 
Non-Contentious probate fees should be fair and reasonable and take into account the complexity and skill required to deal with non-contentious work and also the sum of money involved, according the Law Society.
 
Basically this means that a solicitor is not allowed to charge you a ridiculous sum for straightforward matters, such as putting in an application for probate.
 
Many solicitors charge by the hour and it is not unusual to pay sums in excess of £300 per hour. Even those who don’t charge by the hour can charge hefty per task fees. With sums of £50 for a phone call and £100 for a letter and higher, costs can soon spiral out of control.
 
Some solicitors and banks charge based on a percentage of the estate value, therefore costs can be substantial. This is considered unfair when dealing with straightforward matters, for example forwarding documentation to the registry.
 
You can avoid this by making sure you choose a probate company who calculated their costs based on the amount of work involved. A fixed fee service will agree a fixed sum upfront which includes dealing with non-contentious probate matters. That way you know the exact costs and don’t have to worry that legal fees may spiral out of control.
 
In addition to the initial application for probate, non-contentious probate fees may include duplicate grant applications, deposit of wills, searches, copy documents, oaths and inspection of wills and determination of costs.
 
At a time when you are grieving, it can be difficult to get your head round all the legal jargon, let alone understand what you should be charged. 
 
Contact specialist practitioners at IWC to find out more about our fixed probate fees – for complete peace of mind.
 

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