DIY Probate & Estate Administration

Professional wills and probate legal advice

The risk of incurring personal liability for debts or incorrectly allocated assets is very high.  Financial institutions and beneficiaries both have rights against the erring executor and the HMRC is very unforgiving of errors.

If you are concerned about costs please discuss the position with us. We can tailor our level of service to your requirements.

For example, in a straightforward estate we can extract probate for you and leave you to distribute the money and produce accounts.

Our private client team has many years’ training and experience in this area of work and do regular training to keep up with developments in the law.

People often think it will be dealt with more quickly by doing things themselves but distributing the estate too early is a very common mistake in DIY probate.

We will always progress matters as swiftly as possible but with attention to the time limits for creditors and potentially unknown beneficiaries to come forward. The last thing any executor ever wants to do is to have to ask a beneficiary to pay money back.

DIY will disasters

There is a common misunderstanding that carrying out probate is merely a matter of filling in a few forms. What could possibly go wrong? Here’s some examples of why it’s always best to talk to a wills and probate legal professional.

Taxation and Inland Revenue penalties

HMRC has a strict penalty regime in place; it is essential to have accurate valuations of all the assets in the estate and to declare everything. This includes the £5,000.00 auntie gave you to treat yourself last summer which falls within the seven-year rule. The penalty for non-disclosure is as much as 100% of the tax due depending on the circumstances, resulting in a hefty bill.

The rules governing taxation of income and capital gains in estates can be complicated. If the deceased was a tax payer in life, there may be outstanding tax issues from the last tax year of his/her life. Disposal of assets may result in an avoidable capital gains tax bill if handled incorrectly. Charities are ‘hot’ on tax issues where they are beneficiaries as they have special tax privileges. They will not expect to lose out if you incur an avoidable tax charge.

Creditors

Do you know your relative’s finances inside out? Many executors have discovered to their cost, that the deceased had some spendthrift habits. Remember, many financial institutions encourage the use of online statements, so the absence of paperwork is not something to rely on.

An executor who distributes an estate without notice to potential creditors becomes personally liable for any debts which subsequently come to life. Do you think the beneficiaries will give back the funds when this situation arises? Is the credit card provider going to understand when you explain there is no money left because the beneficiaries were pressing for payment?

Misunderstanding the will

Do you really understand what the will says? Are you aware of the various duties and obligations of trustees where there are minors involved? In homemade wills, the use of incorrect terminology can increase the risk to executors. ‘Money’ for instance has a statutory definition and, although frequently used by writers of homemade wills, does not always fulfil its usual meaning.

DWP investigations

If the deceased received means tested benefits in life, DWP are notified that probate has been issued. They often write for a breakdown of the assets to check the assets declared during the deceased’s lifetime were correct.

Often the estate at death will be greater due to the inclusion of assets which are ignored for means testing but sometimes the deceased will have under declared his assets. An investigation can be lengthy and the estate cannot be distributed until it has finished. An issue may arise where the DWP will take some time to write the first letter of enquiry so the DIY executor has already distributed funds.

Missing or unknown beneficiaries

Relationships in families can be complex. Numerous permutations of natural children, stepchildren, half brothers and sisters, adopted children and children who are treated as adopted but are not officially so, can occur within one family. Intestacy rules ignore step relationships and wills need to make their status clear. Do you know for certain your auntie did not have a child before her marriage, who may have claim to the estate? In short, the term ‘my children’ may include unknown beneficiaries and exclude some you might think qualify.

Insolvency

The case where you may be most inclined to do it yourself is the one where you should definitely not – the situation where the estate is insolvent. There are strict rules governing insolvent estates and the order of payment of creditors. Please seek our advice and make sure it is done correctly.