A recent article published by Which? explains how ordinary families could save thousands of pounds in legal fees by carrying out the probate and estate administration process themselves. Undertaking the administration of an estate yourself is obviously one way for executors to save money, rather than using a solicitor or estate administration specialist. However, Kings Court Trust felt compelled to add to this article and explain why some families might want to consider speaking to an estate administration specialist before undertaking the work.
Which? surveyed 583 members who had acted as an executor in the last two years and asked them how easy they had found the process. Of this sample, 67% opted for DIY probate, rising to 79% when it came to dealing with the latter stages of the process, such as distributing assets.
Of those who opted for DIY probate, 73% stated that the process was easy; however, the study did not identify any information about the 27% who disagreed with this statement. Estate administration can be a highly complex process depending on the circumstances of the individual in question. For example, if the estate belonged to the second member of a couple who have now both passed away, this can have a significant impact on the process itself including the Inheritance Tax (IHT) that is payable, and it is likely to require far more work than on a ‘first death’ estate – for example, if a husband passed away and his estate and passed directly to his wife.
Of course, this approach assumes that the executor feels confident in their ability to administer the estate and that they are in an emotional state where they feel comfortable enough to deal with such a personal and sensitive matter. Dealing with bereavement is never easy and people react differently to the emotional stress that such a loss can cause. Some executors see administering the estate as a good way of focussing the mind after the death of someone close to them, while for others having to deal with a legal process, calculating IHT liabilities and liaising with dozens of companies is the last thing they want to have to think about. Therefore, it is important to remember that even though an estate may be a simple one to administer, that doesn’t necessarily mean that the family will be in a position to attempt this themselves.
Even if the family is confident enough to deal with administering the estate themselves, having multiple executors can slow down the estate administration process if not all of them are in agreement on how to proceed – some cases take several years to resolve. With reports highlighting a rise in the number disputes following a bereavement, families may want to consider independent and impartial advice.
The article focuses on the difference between using a solicitor or DIY probate – highlighting that the main reason to do this is to save money. However, it doesn’t offer any alternative solutions and simplifies the estate administration process into ‘five easy steps’ which might not be suitable for larger and more complex estates. As a result, it doesn’t fully explain the important responsibilities that lie with the executor and the implications if something goes wrong.
For example, there is no mention that executors are legally and financially liable for the accurate distribution of the estate. The executor is accountable to HRMC and the beneficiaries and if an executor breaches their duty they can be held responsible for the consequences, even if they were unaware of their wrongdoing.
Tom Curran, CEO at estate administration specialists, Kings Court Trust, commented: “We feel that by adding to the Which? article we can help raise awareness around the options available to executors – not just DIY probate or appointing a solicitor. We’re not saying that DIY probate is wrong and in some cases we have even recommended this as the best option. However, the argument that everyone should try DIY probate to save money is misleading. Advances in fixed pricing and technology mean that many people prefer to appoint a specialist to for example, reap the benefits of receiving their inheritance more quickly.
At Kings Court Trust we know that being an executor can be challenging, with potentially serious ramifications if you get things wrong. Peace of mind having one less thing to worry about when dealing with the loss of a loved one are really important to many people who will chose to get someone to do everything for them.”
Kings Court Trust offers a comprehensive estate administration service for a guaranteed fixed price. For more information on our services or if you have any questions relating to the estate administration process, visit www.kctrust.co.uk.