Probate and Estate Administration – How much does it Cost ?
Just as every individual has his or her own distinct personality and character, every individual’s estate is unique. Whilst the nature of the work that has to be undertaken in any estate is broadly similar, the extent of that work can vary significantly from one estate to another. The work involved to administer the estate of a widower who dies owning his house and a single bank account, with a Will leaving everything to his only two children is vastly different from the work involved to administer the estate of a single lady who dies owning her house, several bank accounts and a large share portfolio, without a Will and whose only know relative is a distant second cousin.
The very diversity of estates inevitably influences the cost of administration, whether the work involved is undertaken personally or by a professional. As we have built up years of experience dealing with different estates, we have created systems which enable us to undertake the work that is required efficiently and cost effectively.
The price information that follows is given for guidance and should not be taken as a binding quote. When we work for clients, we always ensure that we give a personalised costs estimate at the outset, based on the actualities presented of each case.
“Disbursements” are payable during Probate and Estate Administration. Disbursements are costs that are payable to third parties (whether or not we handle the process). Disbursements are not set by us and include,
N.B. Prices below are per item
|Oath Fee||£5||Each Executor or Administrator swears an Oath as part of the application for a Grant of Probate or Letters of Administration|
|Exhibit to Oath||£2||Each Executor or Administrator swears an Oath as part of the application for a Grant of Probate or Letters of Administration|
|Application Fee||£155||Payable to the Court on applying for the Grant|
|Additional Court sealed copies of the Grant||£1.50||A fee for additional Court sealed copies of the Grant|
|Valuer’s Fees||£155 - £200||plus VAT||These vary according to the nature of any valuation that may be required, such as for a house, land, shares, jewellery and antiques and the whereabouts of the assets.|
|Advertising for creditors in the London Gazette||£84.60||plus VAT||Advertising for creditors in the London Gazette (optional) but placing the advert is recommended because it gives Executors and Administrators protection against personal liability for unknown debts|
|Advertising for creditors in a local newspaper||£106.60||plus VAT||The fee varies according to the newspaper and is optional, but placing the advert is recommended because it gives Executors and Administrators protection against personal liability for unknown debts.|
|Bankruptcy Searches||£2||plus VAT|
When we are acting on a Full Administration (see Probate and Estates Administration – How we can help), we can arrange payment of the disbursements which many people find helpful in smoothing the process.
Our Costs and Rates
We can help to relieve the burden when someone has died by dealing with the Full Administration of an estate (see Probate and Estates Administration – How we can help). We handle the entire process and our costs are based on the number of hours work involved plus a value element charged as a percentage of the estate (not exceeding 0.5% of personal property and 1% of real estate).
We charge a value element to reflect complexity and work that may be done but not charged at an hourly rate. For example, telephone calls to request an update or attendances to verify identity are not charged at an hourly rate but are reflected in the value element. Over the years, we have found that this is cost effective for our clients, enabling inquiries to be made without fear of “running up the bill”. We always strive to ensure that our costs are reasonable and proportionate and the value element may be waived or reduced accordingly.
The cost per hour that we charge varies according to the qualification and experience of the member of our team who deals with the case. We endeavor to assign to any case the member of our team who we feel is appropriate in terms of their qualification and experience.
Our hourly rates change periodically and are currently,
|Partner and/or Senior Solicitor||per hour (excluding VAT)||£220|
|Senior Private Client Advisor||per hour (excluding VAT)||£165|
|Legal Executive||per hour (excluding VAT)||£161|
|Private Client Advisor||per hour (excluding VAT)||£140|
|Trainee Solicitor||per hour (excluding VAT)||£121|
Our exact costs of Full Administration will depend on the individual circumstances of each estate. An estate which consists of a single Bank Account and Premium Bonds where there is a single, undisputed beneficiary may cost less than £1,000 plus VAT and disbursements and be fully administered within 3 – 4 months.
On the other hand, an estate which consists of a house, shares and multiple Bank Accounts with several beneficiaries may cost £4,000 – £6,000 plus VAT and disbursements and the administration process could take 8 – 12 months.
Where Value Added Tax (VAT), is applied it is at the prevailing rate, currently 20%.
If inheritance tax has to be paid, then the costs of administration may be even more and the administration process could take even longer as HM Revenue and Customs have to give clearance which takes many months. On average, our Full Administration costs do not exceed 2% of the value of an estate.
An Example Case
Whilst each case presents its own needs the following example is where,
|A valid Will|
|One property (valued at £145,000.00)|
|Three bank or building society accounts (totaling £60,000.00)|
|No disputes between the beneficiaries or with other family members and no claims against the estate|
|No inheritance tax to pay and no requirement to submit a full inheritance tax account to HM Revenue and Customs|
How much would this case cost ?
We would estimate that 7 hours work would be needed and that our costs (excluding VAT and excluding disbursements) would be a maximum of £3,290, representing less than 1.5% of the value of the estate, broken down as follows,
|Time cost, at the Partner rate of £220.00 per hour||£1,540||plus VAT|
|Value charge on personal property||£300||plus VAT|
|Value charge on real property, if charged at the maximum scale||£1,450||plus VAT|
This would not include dealing with the sale or transfer of the property.
How long does a case take to complete ?
The work involved in and costs of Probate and Estate Administration are spread over many months. On average, it can take up to 3 months to obtain a Grant of Probate or Letters of Administration (collating the information that is needed to make the application can take 4 – 8 weeks and obtaining the Grant from the Court takes approximately 2 weeks, or longer at busy times).
When a Grant has been obtained, the time that the rest of the administration takes can be difficult to predict because so much depends on the nature and spread of assets and liabilities. If there is a house to sell it is impossible to know how long that will take but where there is no property to sell then it may take a further 3 – 6 months to administer the estate.
So, even in a straightforward estate, the process can take 6 – 9 months.
Some estates are complex and can take significantly longer and be more costly to administer. Issues that can increase the cost and lengthen the process might include,
|There being no Will|
|There being beneficiaries who cannot be located|
|There being lost share certificates or lost property deeds|
|There being inheritance tax to pay|
|There being investigations into benefits that were paid by the Department of Work and Pensions|
|There being challenges to the Will|
|There being conflict between beneficiaries or other family members|
Our team has encountered many complexities over the years and hundreds of estates that we have handled. With our many years’ experience we can assist in finding a solution to such issues.
For clients who wish to undertake the administration process themselves, our Grant Only service can be used (see Probate and Estate Administration – How we can help). We offer this service in cases where there is no inheritance tax to pay and no requirement to file a full inheritance tax account with HM Revenue and Customs at a fixed fee of £650 plus VAT, plus the Oath fee, Court Application fee and fee for Court sealed copies of the Grant (see above for details of disbursements).
Inheritance Tax is payable when an estate exceeds a certain value or threshold (“the nil rate band”, which is £325,000 for an individual). The tax is charged at the rate of 40% of an estate’s value above the threshold. This is a complex area and specific advice should be sought.
Calculating the value of an estate for inheritance tax purposes can involve the inclusion of lifetime gifts; there may be reliefs or exemptions to apply which reduce the tax payable; married couples or civil partners may have the benefit of a deceased’s spouses or partner’s unused nil rate band. Any tax due has to be paid within 6 months from the end of the month of death and must be paid before a Grant can be obtained.
When do our costs have to be paid ?
Our costs are payable from the estate and, usually, we defer payment until estate money has been collected in, so there are no upfront costs to pay.
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