The costs of dealing with the administration of an estate can vary considerably depending on which service provider handles it. Many banks charge on a percentage basis, calculated in accordance with the value of the estate which can typically be in the order of 4%. Other service providers may have similar charging schemes.
From years of experience in dealing with this area, our clients tend to prefer that the charges for the administration are calculated in accordance with the actual time taken, irrespective of the value of the estate. We believe that to be a fairer basis upon which the charges should be calculated and this often turns out to be the best option, although by its very nature it can at times be difficult to estimate. If we have been appointed an executor we do not make an additional charge. Our costs for acting as an executor are exactly the same as our costs for administering an estate where we are not appointed.
We are also more than happy to only undertake certain aspects of the administration where specific legal advice is required, for example, the compilation of the probate forms and dealing with the Inland Revenue as appropriate. We are therefore happy to discuss what will assist the family at the time and work with them to achieve the best result.
If a fixed fee is preferred, we would happy to offer this if appropriate if that suits the client best.
If we are to undertake the administration of the estate in full, the exact cost of this will depend upon a number of matters. Generally speaking, there would not be a significant difference in our costs if there were a valid will or no will (an intestacy), but if there is difficulty ascertaining who is entitled, not only to deal with the estate but also to receive the funds from it, this could result in higher costs and genealogists fees which would be additional to our own fees typically starting at £2,500 plus VAT. If there were challenges to the will, or problems with its construction or multiple beneficiaries, these factors can also add to the costs, as can multiple bank accounts and shareholdings and assets held abroad.
If we handle the whole estate, typically our costs can range, on average, from 1-3% of the total net estate. However, estates of less than £1m where a Grant of Probate is required will often cost between £5,000-£10,000 plus VAT and disbursements (see below) unless there are any additional factors which may add to these costs (see below).
Typically, an estate of £1m-£1.5m, where a Grant of Probate is required may cost up to £10,000-£15,000 plus VAT and disbursements requiring 35-55 hours of work at a rate of £270 per hour plus VAT. Estates exceeding £1m up to £2m are likely, on average, to cost between £15,000-£20,000 plus VAT requiring 55-75 hours of work at a rate of £270 per hour plus VAT. Estates exceeding £2m may well have additional assets and complexities and this is therefore likely to be at the higher range of our average fees.
We will always provide you with an estimate at the outset giving costs and timescale information and update this if appropriate should further relevant information or assets come to light at a later stage that may have an impact on the final costs or timescales.
In the above cases where we would be handling the complete administration for you, these charges would be applicable where:
- There is a valid will.
- No more than one property.
- No more than 10 bank or building society accounts
- A portfolio of managed shareholdings.
- Ascertained beneficiaries.
- No disputes between any of the beneficiaries on the division of the assets or in relation to the construction of the will. Should there be any such disputes this could lead to an increase in costs which would have to be advised upon separately.
- There is inheritance tax payable and a full account has to be submitted to HMRC. If a full account is not required and what is known as an IHT205 return is needed instead, the costs would be at the lower end of the scale, and possibly less depending upon the circumstances.
- There are no claims made against the estate and the estate is not contested.
If any of these additional criteria did not apply, we would advise as soon as reasonably possible of the additional costs required and the likely additional timescales if applicable.
This work would include dealing with:
- All preliminary advice required on the notification of the death and obtaining any further information necessary to complete the probate papers.
- Completing and preparing the appropriate probate papers, together with the executor’s oath, Inland Revenue account, any powers of attorney or letters of reservations or renunciations and applying to the Probate Registry for the Grant of Probate.
- On obtaining the Grant of Probate, dealing with all the probate formalities, including realisation of all the cash assets and sale or transfer of shareholdings.
- Advising with regard to the inheritance tax liability and all dealings with the Inland Revenue with regard to the inheritance tax liability and liaising with either the accountants of the deceased or an accountant appointed to deal with the income and capital gains tax matters arising for the administration of the estate but not preparing income or capital gains tax returns ourselves.
- Advising in connection with any steps that will need to be taken in connection with the property.
- Distributing the assets and providing the residuary beneficiaries and executors with full estate accounts or a cash statement as appropriate.
It would not include:
- Administering any trust arising from the will or intestacy.
- Arranging to register the death or funeral
- Inspecting and making arrangements to clear any property
- Dealing with any tax returns for income and/or capital gains tax ourselves
- Preparing a Deed of Variation where required for which a separate charge would be made, typically in the region of £500-£1,000 plus VAT.
- Dealing with the sale or transfer of any property within the estate which will be referred separately to our Real Estate Department who would provide you with a separate estimate of costs.
- The work would not extend to dealing with assets situate outside England and Wales which could result in extra costs in liaising with third parties in that country in order to secure information required and to liaise with regard to their obtaining probate in that country and securing the assets for the administration of the estate.
We would advise of the additional costs of dealing with any of the above additional factors as soon as possible.
There would be disbursements, in addition to our costs, which would not be included within our fees. These are fees that we have to pay on your behalf to third parties and typically include:
- The probate application fee which is currently £155 plus £1 for every extra office copy Grant of Probate required (no VAT).
- Land Registry search fees of £6.00 plus VAT in respect of each property held within the estate.
- Trustee Act Notice to be submitted in the London Gazette of £104.52 including VAT to protect against unexpected claims from unknown creditors.
- Trustee Act Notice to be submitted in the Daily Telegraph of approximately £250-£300 plus VAT also to help protect against unexpected claims from unknown creditors. Please note these notices are particularly relevant with regard to any medical practitioner to maintain their medical insurance post-death.
- Indemnity and administration fees to company registrars for lost share certificates or unpaid dividends.
- Any tax payable arising, which the estate has to pay, namely: inheritance tax, income tax and capital gains tax if applicable.
With regard to the timing of the administration on average, from our experience, it takes approximately 3-4 months to obtain a Grant of Probate or Letters of Administration, but if there are any multiple assets or there has been difficulty tracing the assets then this can take longer. However, we always try to ensure that it is obtained within 6 months because it is at this point that interest starts to be incurred on any inheritance tax (if applicable) payable on the estate.
With regard to the rest of the administration, once the Grant of Probate has been obtained, if applicable, the time required to collect in all the assets of the estate and distribute the monies to the beneficiaries, dealing with all tax affairs (either ourselves or in liaison with accountants as stated above) and the preparation of estate accounts can depend upon a large number of factors, namely:
- Protracted dealings with HMRC over valuations or tax affairs which are beyond our control.
- If there are foreign assets, this can often necessitate lengthy procedures abroad.
- Any dispute about any of the assets, or any construction of the will or estate, can also prolong the administration.
- If beneficiaries have to be traced, this can also take a long time involving searches with genealogists and those fees would not be included in our costs but would be paid in addition.
We would normally hope to complete a reasonably straightforward estate between 6-12 months from the date of death, particularly if inheritance tax is payable ,but this could be longer if the other factors above applied. We always endeavour to administer the estate as swiftly as possible and make interim distributions wherever feasible because we are well aware that it is most important for the family that this process be concluded as quickly as possible.
Our team comprises Fiona Wilson, Partner and Head of Private Client, and Michelle Lang both of whom have worked closely together for 26 years and take a personal interest in all of our clients and their family’s welfare. We always endeavour to give you the best service possible and to be there to assist you at every stage in what we fully appreciate is a difficult process for you and the family.