Probate is a legal process that may be necessary when someone dies and leaves assets behind. It involves obtaining a Grant of Probate to give the Executor the legal right to proceed with estate administration. This includes identifying and valuing the deceased’s assets, paying any debts and expenses , distributing those assets to their beneficiaries, and much more.
The probate process can be an important and necessary process. However, it can also be expensive.
In this blog, we will explore the costs of probate and estate administration in the UK, including the fees charged by Solicitors, the court, and other professionals involved in the process. We will also discuss ways to minimise these costs and provide other options for those who are considering probate in the future.
Whether you are an Executor, a beneficiary, or simply someone who wants to understand the costs of probate, this blog will provide valuable insights into this important legal process.
Importance of knowing the costs associated with probate and estate administration
It is important to understand all costs associated with applying for probate and administering an estate because it can help you plan for the financial impact of the legal process. When applying for probate, there are fees involved with the process. If instructing a professional, there will be an additional cost. Probate can be a time-consuming and expensive process, and the costs can vary depending on which professionals the Executor chooses to instruct, such as a Solicitor or probate and estate administration provider. By knowing the potential costs, it can help you budget appropriately and avoid any unexpected expenses.
What is estate administration?
Estate administration is the legal process of handling all of a person’s legal and tax affairs after they’ve died.
In short, this means dealing with their assets, debts, and taxes before distributing inheritance to the estate’s beneficiaries.
Understanding the costs associated with probate can help you make informed decisions about how to manage this process. For example, you may consider using a fixed fee probate service to just obtain the Grant of Probate and save costs, or you may decide to instruct a professional to handle the entire estate administration process to ensure that it is done correctly and efficiently.
In summary, understanding all costs associated with both probate and estate administration is important for financial planning and informed decision making. It can help you budget appropriately and ultimately help you choose the right service.
The estate administration process consists of six vital steps:
- Identifying the Executor: The first step in the probate process is to identify the Executor named in the deceased person's Will. The Executor is responsible for managing the deceased person's estate and ensuring that their wishes are carried out.
- Valuing the estate: The Executor must determine the value of the deceased person's assets, which may include property, investments, and personal possessions.
- Applying for probate (also known as Grant of Representation): The Executor must then apply for a Grant of Probate (if there is a Will), which involves completing a legal form and submitting it to the Probate Registry. The form includes details about the deceased person's assets, debts, and beneficiaries.
- Paying Inheritance Tax: If the value of the estate is above a certain threshold, the Executor may need to pay Inheritance Tax before probate can be granted and complete a complex IHT account.
- Collecting assets and paying debts: Once probate has been granted, the Executor can collect the deceased person's assets, pay any outstanding debts and expenses, and distribute the remaining assets to the beneficiaries.
- Finalising the estate: Once all assets have been distributed and all debts have been paid, the Executor can finalise the estate and complete any necessary tax returns.
What are the costs of probate and estate administration?
Legal professional costs to complete the probate process or full estate administration can vary depending on several factors, such as the complexity of the estate, the size of the estate, and the specific services required. Professionals, such as probate and estate administration providers and Solicitors, can charge in a variety of ways, such as fixed fee pricing, an hourly rate, or a percentage of the overall estate.
Many people find fixed fees preferable as it provides a clear view of exactly what you’ll be paying upfront. Hourly rates can quickly add up and the final cost may be unclear at the outset. A percentage of the overall estate can often be expensive, and they are not always reflective of the work involved in the estate. At Kings Court Trust, we only charge fixed fees that are based on the work involved in the estate to ensure all our clients get a fair and transparent price that they are aware of upfront.
For the administration of simple estates, Solicitors may charge an hourly rate from £100 to £300 per hour (depending on the experience of the Solicitor) to complete the entire process. This fee typically includes obtaining the Grant of Probate, collecting and distributing the assets, as well as dealing with any tax matters.
For more complex estates with multiple properties and bank accounts, the cost of Solicitors may be significantly higher due to the complexity and time needed to complete the estate administration process. Furthermore, additional costs such as court fees, property valuation fees, and tax advice fees may also apply.
It is important to note that costs can add up quickly, and it is important to obtain a clear breakdown of all the costs involved before proceeding. It is also advisable to obtain quotes from multiple professionals to ensure that you are getting a fair market price.
Overall, the cost of professionals to complete the estate administration process can vary widely depending on several factors. It is important to do your research and obtain a clear understanding of the costs involved before proceeding with any legal services.
Probate Registry fees
Probate Registry fees in the UK are fees charged by the government for issuing a Grant of Probate (if the deceased had a valid Will) or Grant of Letters of Administration (if the deceased did not have a valid Will), which is required to administer the estate of a deceased person. These fees are set by the government and are dependent on the value of the estate. As of 2023, the fees are £273 if the estate value is £5,000 or over. However, no fees are applicable if the estate value is under £5,000.
The fees are payable by the Executor of the Will or Administrator of the estate and must be paid before the Grant of Probate or Grant of Letters of Administration can be issued. It is important to note that these fees are separate from any fees charged by Solicitors or other professionals involved in the probate process. Although, a professional may include this cost in their third-party or disbursement fees.
Inheritance Tax is paid on the value of an individual's estate when they pass away and on certain gifts made during their lifetime.
In the UK (as of February 2023), Inheritance Tax is currently charged at a rate of 40% on the value of the estate above the Nil Rate Band of £325,000. If the estate includes a family home that is left to direct descendants, such as children or grandchildren, the additional Residence Nil Rate Band of up to £175,000 may also apply. This means that the total tax-free threshold for an estate that includes a family home can be up to £500,000. Estates may also be able to claim allowances from pre-deceased spouses to get the total tax free allowance to £1 million.
Inheritance Tax must be paid by the Executor of the Will or the Administrator of the estate, ideally by the end of the sixth month after the individual passed away to avoid interest. It is important to note that Inheritance Tax is a complex area of law, and it is recommended to seek professional advice to ensure that your estate planning is done in the most tax-efficient way possible.
Other expenses to consider
In addition to the Probate Registry fees and probate service fees, there may be other costs associated with the estate administration process that should be taken into consideration. These costs can include:
- Valuation fees: If the estate includes assets such as property or shares, it may be necessary to have them professionally valued to determine their market value at the date of death.
- Property clearance and cleaning costs: If the deceased person's property needs to be cleared or cleaned before it can be sold or transferred, there may be additional costs involved.
- Asset transfer costs: There may be costs associated with transferring assets such as property, stocks, or bank accounts to the beneficiaries, such as conveyancing fees or bank transfer fees.
- Insurance costs: It may be necessary to take out insurance policies to protect the estate assets during the probate process, such as home insurance or contents insurance.
- Disbursements: These are expenses incurred by the probate provider on behalf of the client, such as court fees or fees for obtaining official copies of documents.
It is important to obtain a clear breakdown of all the costs involved in the probate process before proceeding, to ensure that there are no unexpected expenses, and that the estate is managed in the most cost-effective way possible. When administration has been completed, the Executor or Administrator should produce estate accounts so that they can claim back reasonable expenses, and the beneficiaries can understand the final value of the estate.
How long does probate take?
Obtaining a Grant of Probate (or Grant of Letters of Administration) is not a straightforward process and the length of time it takes can be affected by various factors. These include the complexity of the estate, the number of beneficiaries, and the promptness with which the necessary forms and documents are submitted to the Probate Registry.
Typically, it can take up to sixteen weeks to obtain a Grant of Probate once the application has been submitted to the probate registry, but this timeframe may extend if complications or disputes arise.
It should be noted that the Grant of Probate is just the beginning of the probate process and estate administration can take much longer. No matter the size of the estate, it is likely to take several months, if not years, to complete.
Common challenges in the probate and estate administration process
The estate administration process can be complex and time-consuming, and there are several common challenges that can arise during the process. These include:
- Delays in obtaining the Grant of Probate: As mentioned, obtaining a Grant of Probate can be a lengthy process, and delays can occur due to factors such as backlogs within HMCTS, disputes over the Will, or complications with the estate.
- Disputes between beneficiaries: Disputes can arise when beneficiaries disagree about the distribution of assets or the validity of the Will. This can lead to legal challenges and delays in the probate process.
- Identifying and valuing assets: It can be difficult to identify all assets owned by the deceased person, especially if they had a complex financial situation or owned property in different locations. It may also be challenging to value these assets accurately.
- Paying off debts: The Executor is responsible for paying off any outstanding debts owed by the deceased person, which can be a complex and time-consuming process.
- Dealing with taxes: The Executor may need to file tax returns on behalf of the deceased person and pay any outstanding taxes owed.
- Keeping beneficiaries informed: Beneficiaries may have questions or concerns about the probate process, and it is important to keep them informed and updated throughout the process.
These challenges can add to the overall complexity and length of the probate process, and it is often helpful to work with a legal professional to navigate these issues.
How to reduce the cost of probate
In the UK, probate fees can be a significant cost, and it is important to explore ways to reduce these expenses where possible. By exploring all options, it may be possible to reduce the cost of probate and make the process more manageable. These can include:
DIY probate is a process in which the Executor of an estate takes on the responsibility of administering the estate without the assistance of a Solicitor or other legal professional. This can be a cost-saving option for the Executor and beneficiaries, as it avoids the need to pay legal fees for professional services. Instead, the Executor takes on the responsibility of completing all necessary paperwork, valuing assets, paying debts and taxes, and distributing assets to beneficiaries.
While this approach can be more affordable, it also comes with added responsibility and risk, as the Executor may not have the same level of expertise as a legal professional. They are financially liable for any mistakes in the process.
Using a fixed fee probate service
Fixed fee probate is an alternative to traditional hourly billing for probate services provided by legal professionals. Instead of being charged an hourly rate, the Executor of the estate is charged a fixed fee for the probate and estate administration services provided.
This fee is agreed upon in advance and is not dependent on the amount of time spent on the case. Fixed fee services can save the Executor and beneficiaries money by providing greater predictability and transparency in the cost of probate and estate administration.
With a fixed fee, the Executor can budget for the costs involved without worrying about unexpected bills or escalating legal fees.
Choosing the right service
Kings Court Trust is a UK-leading probate and estate administration provider that offers award-winning, fixed-fee solutions to support every family during the probate process.
Whether you need a hand obtaining the Grant of Probate, completing the complicated tax and legal work, or the entirety of the estate administration process, you are in safe hands with our team of specialists.
If you have any questions about the estate administration process, including applying for the Grant of Probate, call our Client Services Team on 0300 303 9000 or fill in the form below.