Probate: Do-It-Yourself or use a Lawyer?
Thorne Segar’s probate expert, Rebecca Padgett, provides insight on what to do if you’ve been appointed Executor in a Will. Should you administer the estate yourself or use a professional?
What is an Executor?
If a loved one or friend has appointed you as Executor in their Will you are legally responsible for administering the estate (obtaining a grant of probate, distributing their estate to the beneficiaries* and paying creditors and taxes). Whilst you are legally responsible, and accountable to the beneficiaries, creditors and HMRC, you do not have to do the work yourself. As Executor you can decide whether to undertake the task of administration yourself or appoint a suitable professional to do it on your behalf. This is the one of the first decisions you will need to make.
(*Beneficiaries are the people who inherit under the Will).
Why might you consider administering the estate yourself?
One possible advantage of administering an estate yourself could be the cost saving of professional legal fees. Legal fees are payable from the estate so this may not be a concern – however if you are a beneficiary of the estate you would benefit from this saving.
Some people relish the challenge of administering an estate and enjoy a sense of accomplishment in doing all the work themselves.
If you can devote all your time and attention to administering the estate yourself it could be quicker than instructing a professional.
What are the potential pitfalls of administering an estate yourself?
Administering an estate is a legal process with rules. You don’t know what you don’t know and common sense will only get you so far. There are risks and personal liability to acting as an Executor. A lawyer knows the rules and understands the framework.
As the person administering the estate you are personally liable to the beneficiaries of the estate. If you are the sole beneficiary and Executor, you are only accountable to yourself, however you are also liable to the creditors of the estate and HMRC.
Who are the beneficiaries of the estate? Do you want the responsibility of looking after potentially large sums of money or property for other people? What about the change in the relationship dynamic – family members querying when they are going to get their money?
If there are charitable beneficiaries they expect the estate to be administered correctly and will hold you accountable. Charities often have specialist departments to scrutinise legacies.
Administering an estate is a time consuming process. Do you have the time available and a disposition for complex paperwork?
Claims on the estate
Is the estate liable to Inheritance Tax? Do you understand all of the inheritance tax rules? You don’t want to get on the wrong side of HMRC who can apply penalties. It is not an excuse if you get something wrong that you didn’t know – they expect you to consult with a professional.
There are various claim periods within which a claim can be brought against the estate – if you administer the estate and a successful claim is brought, you are personally liable to the person bringing the claim.
You may want to administer the estate yourself if:
- You are the sole beneficiary and Executor
- There is a bank account and you only need to fill a form out to close it
- The estate is very simple e.g., it comprises a house and bank account
- You have acted as the Attorney of the deceased and have an intimate knowledge of their affairs
- It’s something you would really like to do for hedonic reasons and you enjoy paperwork
You may want to instruct a lawyer if:
- There are charitable beneficiaries – a lawyer will administer an estate in the way that a charity needs it to be administered
- There are family dynamics to consider – sometimes it’s better to have someone completely impartial liaising with the beneficiaries
- There is potential for disgruntled or disputing beneficiaries – you may get caught between opposing sides and find yourself in a difficult situation.
- There is a claim, or potential for a claim, against the estate – extreme care needs to be taken in this situation
- The estate is taxable – legal knowledge is required here as there are all sorts of interactions between various taxes.
- There is a trust involved – legal knowledge is required here
- The estate is complex with lots of different assets to sort out
- There is a lot of debt in the estate – care needs to be taken in this situation to ensure that there are sufficient assets to pay the debts. Sometimes there is enough money to pay the debts, but not enough to effect the terms of the Will, in which case there are set rules which apply as to who gets what.
- You don’t want the responsibility and like to know that things will be done to the highest standard – this is the most common reason that clients instruct me
- You simply do not have the time available, or dislike paperwork. Administering an estate can be burdensome.
- It is perfectly acceptable and commonplace for Executors to instruct a lawyer – there is no expectation that an Executor should do the work themselves.
What to expect from a lawyer:
The person you appoint to administer the estate on your behalf should be attentive, friendly, approachable and efficient. You should agree a fee before they carry out any work so there are no surprises – the fee will be payable from the estate.
A lawyer doesn’t have to do the whole estate administration – you may decide you want them to obtain the Grant of Probate and then administer the estate yourself.
You should approach more than one firm to get a quote and a ‘feel’ for the people who will be doing the work. Some firms charge very high fees, however these are not always in line with their experience or level of service!
You can find out more about Thorne Segar’s probate services here. We also provide free home visits in the local Minehead, West Somerset and Exmoor area.
If in doubt, contact us for a free, no-obligation, consultation. Our friendly team are here to help.
01643 703234 email email@example.com