All estate administration matters are dealt with by highly experienced probate practitioners including members of the Society of Trust & Estate Practitioners (STEP) and Solicitors for the Elderly, all with more than 15 years experience and overseen by the head of Hyphen Law.
We are able to assist by dealing with the entire process of administering an estate or taking on a smaller role in order to deal with specific stages in the process.
We have experience of dealing with a range of matters, from very simple estates to the more complex estates involving business and agricultural property relief, farms, foreign assets, charity beneficiaries and complex tax matters requiring negotiations with HM Revenue & Customs.
What is the administration of an estate?
Administering an estate is the legal process of dealing with a person’s estate after they have died and implementing the terms of the Will or distributing the estate in accordance with the Intestacy Rules if there is no Will.
It includes all the work involved in obtaining the Grant of Probate (the legal paperwork that is required to be able to deal with the assets of the deceased), but also includes preliminary work such as securing the assets, identifying the beneficiaries of the estate and valuing the estate.
Once the Grant has been obtained, it gives authority to the person named in the Grant, usually known as the Executor, to collect all the funds in the estate, pay any debts and then distribute the rest of the estate in accordance with the Will. Broadly speaking, the same processes will apply regardless of whether the deceased person left a Will or not, although it can take longer to deal with if there is no Will.
Key stages and tasks to be carried out
To complete the administration of an estate in its entirety, the following is a simplified overview of what will be required:
- Arrange the funeral and register the death
- Secure the assets so they are protected, for example arranging insurance of property and vehicles
- Identify the beneficiaries
- Gather all the information about the deceased’s estate including assets, liabilities, expenses and lifetime gifts
- Establish the value of the estate
- Review whether Inheritance Tax is applicable, taking into consideration any relevant allowances
- Prepare the appropriate Court application papers and accompanying HMRC papers
- Apply to the Court for the Grant of Probate
- Collect in all the assets by closing accounts and selling investments
- Sell or transfer the property and deal with utility providers
- Settle all the estate’s debts, taxes (income tax, capital gains tax and inheritance tax) and expenses
- Manage any claims against the estate, for example DWP recovery of any overpaid benefits
- Pay legacies in accordance with the Will
- Finalise estate accounts (which will ultimately need approval by the beneficiaries)
- Distribute the funds within the estate
How long will it take?
The amount of work required depends on many factors, including what assets the deceased owned and the work needed to value, realise and distribute those assets which in turn has an impact on how long it will all take to deal with.
If the estate is a simple estate without any property involved it can take between 6 and 12 months to fully complete the whole estate administration. Typically, obtaining the grant of probate takes 6-8 weeks. Collecting the assets then follows which can take a further 6-8 weeks. Once this has been done, assets can be distributed and this can take a further 2-4 weeks.
If there is a property which is part of the estate which is to be sold, it can take longer to deal with.
In some cases, executors are advised not to distribute the estate until a period of 6 months from the date on which the Grant of Probate was issued in order to ensure that they are not personally liable for any claims against the estate if funds have already been distributed within this timeframe. It is possible to distribute within the 6 month period subject to the agreement of the executors.
If the estate is a basic or medium-sized estate and includes a property and several other assets, it can take between 1 and 2 years to fully complete the administration.
For a large estate involving property, trusts and complex taxation issues it can take more than 2 years to conclude the whole process.
The time estimate is also affected by all the third parties who are connected with the matter and who have to be involved with the process. The speed at which anything is dealt with is therefore often outside of our control so sometimes the time spent can be longer, but it can also take a shorter length of time as well.
How much will it cost?
The cost is usually calculated on a time spent basis at the relevant hourly rate for the person dealing with the matter. This is currently £250 plus VAT. Costs can therefore vary significantly between matters depending upon the amount of assets in the estate, the length of time it takes to deal with all those assets and whether or not there are any complex factors to be resolved which take a longer amount of time to deal with.
For example, the cost of administering an estate where everything is left to a surviving spouse will be less than administering an estate for an individual with foreign assets, complicated tax affairs and several different beneficiaries.
Alternatively, it can sometimes be appropriate to deal with matters on a fixed fee basis and this can be agreed at the outset of the matter.
The fees for administering an estate are payable from the estate and not personally by the person dealing with the estate administration.
Examples of fees
Some examples of different types of estates are set out below to give you an idea of our likely fees.
For a basic estate where:
- there is a valid will
- there is no more than one property to be transferred direct to beneficiaries
- there are no more than two bank or building society accounts together with two other investments or savings accounts
- there are no other assets owned solely or jointly with anyone else
- personal possessions are dealt with by the beneficiaries
- the spouse is the sole beneficiary
- there is no inheritance tax payable and the executors do not need to submit a full account to HMRC
The likely fees for applying for the grant, collecting and distributing the assets would be in the range of £1,500 to £5,000 plus VAT and disbursements.
For a medium-sized estate where:
- there is no more than one property to be sold or transferred
- there are no more than five bank or building society accounts together with three other investments or savings accounts
- there are stocks and shares managed by a stockbroker
- assistance is required in dealing with the personal possessions
- lifetime gifts made by the deceased need to be fully established so as to be included in the paperwork
- there are no more than five legatees and four residuary beneficiaries
- there is no inheritance tax payable but the executors need to submit a full account to HMRC to include a claim for the transfer of a deceased spouse’s full inheritance tax allowances
The likely fees for applying for the grant, collecting and distributing the assets would be in the range of £7,500 to £12,000 plus VAT and disbursements.
For a large estate where:
- there is more than one property to be sold or transferred
- there are more than five bank or building society accounts together with three other investments or savings accounts
- there are various stocks and shares held in certificated form and not managed by a stockbroker
- assistance is required in dealing with the personal possessions and arranging for the sale, distribution and clearance of such items
- lifetime gifts made by the deceased need to be fully established so as to be included in the paperwork and some of these exceed the inheritance tax allowances
- there are more than five legatees and four residuary beneficiaries
- there is inheritance tax to pay and the executors need to submit a full account to HMRC to include a claim for all relevant inheritance tax allowances
- there are on-going trusts created in the will
The likely fees for applying for the grant, collecting and distributing the assets would be in the range of £15,000 to £25,000 plus VAT and disbursements.
Some general assumptions apply to these examples:
- All executors are known
- All beneficiaries are known
- The deceased was domiciled in England & Wales
- The deceased’s assets are easily identifiable and their personal records are in good order
- There are no business or agricultural assets
- There are no foreign assets
- There are no claims against the estate
- There are no disputes between beneficiaries
- Third parties do not add any unnecessary delay in dealing with paperwork
Disbursements normally incurred as part of the process
Disbursements are costs related to your matter that are payable to third parties, such as court fees. These usually include:
- Probate application fee of £155 plus 50p for each additional copy (NB this is due to be amended shortly so that the probate application fees are banded depending on the value of the estate)
- Bankruptcy-only Land Charges searches (£2 per beneficiary)
- Notices placed in The London Gazette and a relevant local newspaper to protect executors against unexpected claims from unknown creditors – approximately £180
These will also need to be paid by the estate as the matter progresses, as well as any separate valuation or transfer fees.
Potential additional costs
- Dealing with the preparation and filing of income tax returns
- Preparing a Deed of Variation to re-direct any individual beneficiary’s entitlement
- Dealing with any Inheritance Act claims made against the estate
- Dealing with any separate but related trust, including the on-going administration of any trusts created by the Will
- Dealing with the sale or transfer of any property in the estate
This information is intended to be indicative only.
Once the full details of an individual case are known, a more accurate quote can be provided and a fee structure can be agreed.
As the matter progresses, you will be kept informed of the position relating to the fees, particularly if there is any material change in circumstances which may necessitate a review of the original quote. Your agreement will be obtained before any changes are made in such circumstances.