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by November 30, 2018Published on
Estate Administration Costs
Our pricing for assisting personal representatives in administering and distributing the estate when someone has died varies depending upon the complexity of the estate and other factors, such as whether there are any disagreements within the family.
Because it is not necessarily the case that a small estate is simple to administer or that a large estate is complex, we simply charge for the amount of work required at an agreed hourly rate of the person who undertakes the work. Our current hourly rates are:
Partners and Consultants £250 + VAT
Senior and Associate Solicitors £220 + VAT
Solicitors £200 + VAT
As a general guide our fees for administering an estate are likely to fall within the following ranges:
Simple case: £3,000 – £6,000 + VAT*
(A full inheritance tax account is not required – usually where the value of the estate is less than £325,000 or less than £1,000,000 and all passing to a surviving spouse – and there are no or minimal complicating factors – see ‘Other Factors’ below )
Medium complexity case £7,500 – £15,000 + VAT*
(A full inheritance tax account is required and/or there are several complicating factors but there are no foreign assets and no claim for e.g. Business Property Relief or Agricultural Property Relief – see ‘Other Factors’ below)
High complexity case £20,000 – £45,000 + VAT*
(A full inheritance tax account is required and/or there are many complicating factors and/or there are foreign assets and/or a claims for e.g. Business Property Relief or Agricultural Property Relief are required – see ‘Other Factors’ below)
* Note: the above fees are only guidance and precise fees may vary from case to case (please see “Other Factors” below). A bespoke cost estimate will be given to you at the outset of your case and will be reviewed regularly throughout your case.
* Note: the above fees do not include our charges for selling properties. This is because it is more economical for the estate for this to be dealt with by our specialist Residential Property Department.
*Note: If none of the complicating factors (please see “Other Factors” below) apply and the estate is below £50,000 you may wish to consider making a personal application through the Probate Registry, rather than instructing a solicitor. This is because there is always a baseline level of work that is required in every case and our fees will consume a substantial proportion of the estate’s value. We would therefore be concerned whether we would be able to provide sufficient benefit to the estate to justify our fees. This would not prevent you instructing us at a later date for specific advice or in connection with the sale of a property.
*Note: We are unfortunately unable to accept instructions for estates which are insolvent (where the debts are more than the assets).
The fees set out above cover work in relation to the following key stages:
• Identification and valuation of assets and debts
• Preparation and submission of the appropriate Inheritance Tax account (and arrangements for payment of tax where applicable)
• Preparation and submission of the application for the Grant of Probate (or Letters of Administration)
• Collection of assets (or arranging transfer to beneficiaries, as appropriate)
• Payment of debts due at the date of death and expenses arising as part of the administration
• Payment of any legacies contained in the Will
• Attending to any income or capital gains tax requirements (if applicable)
• Preparation of an Estate Account
• Distribution of the Estate to the beneficiaries
The stages set out above are only an indication and, naturally, if some stages are not required the fee will be less. You may wish to handle parts of the administration yourself and only obtain our advice in relation to certain stages. This can be tailored to your individual needs.
Every estate is different and costs will vary depending upon the complexity of the individual case. Complicating factors which might increase costs include:
• If we are provided with a large amount of initial financial paperwork and are asked to analyse to identify assets and liabilities (particularly if the paperwork has not been organised)
• Significant gifts having been made in the 7 years before death
• The existence of any trusts which may impact on the value of the estate for tax purposes
• Where there are a large number of assets and liabilities to be dealt with
• Where there are Foreign Assets
• Where there estate includes one or more interests in a business
• If there is no will and the deceased had a large family or no immediate family
• Dealing with complex issues including, but not limited to, applying for inheritance tax exemptions and reliefs (e.g. Business Property Relief, Agricultural Property Relief, Residence Nil Rate Band)
• Dealing with disputes within the family regarding the Will, claims for Financial Provision or regarding the administration of the estate generally.
We usually expect at least one of these to apply in every case and the indications of our charges above reflect this. Therefore if the estate is very straightforward it follows that our fees may be lower than our guideline fees. We will of course advise you of any increase in our cost estimate should any factors arise which alter our original fee estimate.
Disbursements are costs relating to your matter that are payable to a third party, such as professional valuation fees or application fees. We handle the payment of disbursements on your behalf to ensure a smoother process. If funds are available to the estate we will use these, but in some cases we may ask you to pay the cost of those disbursements to us up front before we incur them on your behalf. If we ask you to do this we would arrange a repayment once funds are available to the estate
The most common disbursements which we incur are:
Application Fee for Grant £155.00
Copies of Grant £0.50 per copy
Land Registry Title £6-£12 per property
Trustee Act Advertisements – London Gazette £100 (including VAT) – estimate
Bankruptcy searches £2 per beneficiary
There may be other disbursements such as professional valuations, will searches and accountancy fees. We ensure that you receive information about these, including the associated costs, to help you decide whether you need them.
Finally, there may be tax to pay. The main tax which applies when someone dies is Inheritance Tax, but there may also other taxes which need to be dealt with e.g. Income Tax. Again, we will help you to identify this with you and either deal directly with HMRC or engage a specialist advisor on your behalf. Before instructing specialist advisors, we will obtain information as to their costs.
The time it takes from taking your initial instructions to the distribution of the estate depends largely on the complexity of the estate and any tax payment and reporting requirements.
Simple estates can be dealt with within a few months, whilst very complex estates can take some years. You may have heard of an ‘executor’s year’. Whilst this period is not enforceable by law, it is generally accepted as a reasonable time period for the administration of an estate.
We will be able to give a more accurate timescale as the administration progresses.
December 10, 2018
The December issue of our HR Law update is now available to download