Can probate fees be paid from the estate?
When a loved one dies, many Executors worry about the cost of administering the estate and how those expenses will be covered. Acting as an Executor or Administrator is not a paid role, which can naturally lead to concerns about being left out of pocket.
In this article, we explain what probate is and explore whether probate fees and other administration costs can be paid from the estate.
What is probate?
Probate, known as the Grant of Probate (or Grant of Representation in England and Wales) and Confirmation in Scotland, is the legal authority obtained by an Executor to administer a deceased person's estate. When someone dies without a Will (dying intestate), the person responsible is called an Administrator, and the equivalent legal document is called Letters of Administration.
Whether or not there is a Will, the Executor or Administrator (collectively, the Personal Representative) must determine whether probate is required. In most cases, probate is required when the deceased owned property in their sole name and/or held funds exceeding a certain threshold at a bank or financial institution. These thresholds vary, as each UK financial provider sets its own limit for when probate is required.
What is the difference between probate and estate administration?
Although probate is not required for every estate, the Executor or Administrator is always responsible for administering the estate. This broader process is known as estate administration, with probate forming just one part of it.
Estate administration typically involves a range of practical and legal tasks, which may include notifying utility providers, completing tax returns, managing or selling assets and property, and preparing final estate accounts, among other responsibilities. Learn more about the difference between probate and estate administration.
How much does probate cost?
The application fee for a Grant of Probate is £526 for most estates. However, if the estate is valued at £5,000 or less, no application fee is payable.
Many Personal Representatives choose to appoint a professional to apply for the Grant on their behalf, helping to reduce the administrative burden at what is often a difficult time. This service will incur an additional fee. Some providers charge a fixed fee, while others bill based on time spent or as a percentage of the estate's value.
Professional support can range from obtaining the Grant of Probate only to managing the entire estate administration process. Learn more about Kings Court Trust's transparent, fixed-fee pricing.
Can probate fees be paid from the estate?
So, how are probate fees paid? The probate application fee can be paid online or by cheque (if applying by post) and then reimbursed from the estate once funds become available. Similarly, if you choose to appoint a professional to act on behalf of the Executor or Administrator, the cost of their services can also be reclaimed from the estate.
Alternatively, an Executor bank account can be opened using the estate's funds, meaning the Executor may not need to pay any upfront costs personally. However, this will depend on the value of the estate and the policies of the financial institution where the deceased held their accounts. In some cases, you may need to obtain the Grant of Probate before estate funds can be used to pay expenses.
Can money be distributed to beneficiaries before probate is granted?
Although there are some exceptions, the estate should generally not be distributed until the Executor has obtained the Grant of Probate. Even where probate is not required, paying beneficiaries should usually be one of the final steps undertaken by the Personal Representative. This helps ensure that all outstanding debts, liabilities, and expenses have been paid from the estate before any distributions are made. In most cases, funeral expenses can be paid directly from the estate before probate is granted.
Additionally, it is best practice for the Executor to place a statutory advertisement in a local paper to allow any unknown creditors or beneficiaries to come forward. The recommended notice period is at least two months, after which the estate can be distributed as planned. Placing these notices can also provide the Executor with additional protection against potential claims from unknown creditors or beneficiaries in the future.
What can Executors do before probate?
Before applying for probate, an Executor should complete several important tasks. These include, but are not limited to:
- Locating key documents, including the Will, birth, marriage, and death certificates, pension details, insurance policies, and other relevant paperwork
- Registering the death
- Arranging the funeral
- Identifying and valuing the estate's assets and liabilities to calculate the overall estate value
- Obtaining property valuations where required
- Completing the relevant Inheritance Tax forms (if applicable)
As probate is not required for these tasks to be carried out, they do not need to be completed solely by the Executor. However, it is common for the Executor to take responsibility for managing these initial steps. Find out more about what to do when someone dies.
What other expenses can be deducted from the estate?
When acting as Executor or Administrator, you should keep a detailed record of all expenses paid during the estate administration process. This allows accurate estate accounts to be prepared at the end of the process and ensures that any reasonable expenses can be reimbursed from the estate.
Reasonable expenses are costs paid by the Executor or Administrator that are necessary for administering the estate and benefiting the beneficiaries. Aside from the probate application fee, these may include:
- Property valuation fees
- Property clearance costs
- Legal fees associated with selling property
- Travel expenses incurred while administering the estate
- Inheritance Tax fees
- Other legal and professional fees
Claiming expenses that are not considered reasonable could lead to delays in the estate administration process. Beneficiaries are entitled to request details of the estate's financial records, including expenses paid by the Personal Representative, to ensure that the estate is being managed appropriately and that they receive their rightful inheritance.
When can the Executor pay beneficiaries?
Once all debts have been settled and the estate's assets have been accounted for, the Executor can begin the process of distributing the estate to the beneficiaries. At this stage, the Personal Representative(s) can also be reimbursed for any reasonable expenses paid during the administration process.
The Executor or Administrator should also prepare estate accounts for the beneficiaries, allowing them to review the estate’s financial details and understand how their entitlement has been calculated. These accounts should include a complete record of the estate’s assets, liabilities, fees, and administration expenses. In essence, estate accounts provide a clear overview of all money received into and paid out of the estate.
What help is available to Executors?
There are several estate funding solutions available to help Executors cover the costs associated with probate and estate administration. These options can also help ensure beneficiaries receive their inheritance as smoothly as possible and reduce the risk of potential disputes. Examples include Inheritance Tax loans, inheritance advances, and funding solutions for estate expenses.
Instructing a professional who offers a fixed, upfront fee gives Personal Representatives confidence that there will be no unexpected costs. It also allows them to hand over the complex and time-consuming aspects of probate and estate administration to an experienced expert.
Here at Kings Court Trust, we can handle the Grant of Probate application process on your behalf, taking care of the complex paperwork and administration involved. Once the Grant has been obtained, we will provide you with copies so that you can begin the estate administration process.
We also offer a full range of specialist estate administration solutions, including managing the entire estate administration process from start to finish. This provides Personal Representatives with the reassurance and peace of mind that every aspect of the estate is being handled by experienced professionals.
