Probate, Uncategorized

Probate Court Fees – Expected Hike

The Government has issued proposals to increase the fee paid to the Probate Registry for obtaining a Grant of Probate.  A Grant of Probate is very often required when someone dies to allow the estate to be administered.  Currently the fee is £155.00 for all estates which have a value of more than £5,000.

Is this fair?

The proposals suggest that there should be no fee for estates of value less than £50,000 which will make it cheaper to administer estates of less than that sum.  However the raising of this threshold is countered by a massive increase on higher value estates.  For example the fee to obtain a Grant of Probate for an estate worth £2 million or more will become £20,000.  The following consequences seem either to unfair or unsatisfactory or both:

  1. People seeking to organise their affairs (especially the elderly) might be persuaded to move their assets out of their name to their children or into some form of ‘Trust’ so that when they die their estate is of a lower value and therefore a Grant of Probate will not be necessary.  Vulnerable people might be persuaded to part with assets, which may not be in their best interests.  Unregulated organisations might see this as a marketing tool to try and grab business from elderly people in this manner.
  2. Although most very large estates will have cash in them to enable payment of the probate fee some very large estates may almost entirely consist of property or shares and it may not be easy to find cash for the probate fee which has to be paid up front.
  3. People might be tempted to put their money in lots of very small accounts to try and enable each account to be administered individually after their death so that a Grant of Probate is not required.
  4. The current proposal is not designed to ensure that the Probate service simply pays its way.  The service currently pays its way.  This revenue raising exercise is designed to subsidise other parts of the Court and Tribunal Service.    Charging such high fees to deceased estates is probably seen by the Government as an easy target to fund other areas of the Court and Tribunal Service.

Government consultation ends on 1 April 2016 and one can only wait to see what the outcome will be.

Whatever action individuals might be prepared to take to deal with increased probate fees they should always ensure that when dealing with a professional, the professional is regulated and insured before undertaking any business with them, or handing over any money.  The advantage of using a solicitor is that solicitors are regulated by the Solicitor’s Regulation Authority and all carry insurance.  Firms of solicitors which close or merge can be tracked through the Law Society so that documents held by a former firm of solicitors are traceable in the future.

Tom Morrish

Partner

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Uncategorized

Someone has died. What do I do?

It can be overwhelming when someone close to you dies. However, at the same time you know that you need to make important decisions. Some of the steps below are matters that you will want to deal with yourself, others you may want to consider instructing a solicitor:

  1. Find the last Will:

If the deceased left a Will it can usually be found amongst their personal belongings or with their Solicitor/Bank. If there is a Will, the first thing to check is for requests in relation to funeral arrangements.

  1. Legal responsibility:

If there is a Will, there will be named Executors who have legal authority to deal with the Estate (property, possessions and money).

Where there is no Will the law (Intestacy Rules) sets out how the Estate will be distributed and usually the nearest relative takes legal responsibility becoming the Administrator.

Whether or not there is a Will, the person with legal responsibility will be held personally liable in law if the Estate is not dealt with properly.

  1. Register the death:

Death should normally be registered by the person taking legal responsibility within five days of death. Contact the Local Register Office. They will help with the process.

  1. The funeral:

This is usually arranged by the person taking legal responsibility Funeral directors will help with all arrangements.

The person making the arrangements will be responsible for the costs but where the deceased left sufficient money these costs will be met by the Estate out of the deceased’s bank account.

  1. Probate – what does it mean?

In order to deal with the assets, it is often necessary to obtain authority of the court. The court will issue a document to the Executors called “Probate” if there is a Will. If there is no Will, the closest relative will obtain “Letters of Administration”. These documents allow the Executor or relative to sell the assets of the deceased.

  1.          Can I manage without Probate?

If the estate is small and none of the financial institutions require Probate or Letters of Administration, then it is possible to deal with the Estate without applying to the court. The financial institutions have their own procedures which should be followed.

  1. Tax?

Usually there are two taxes which are relevant, Income Tax and Inheritance Tax.

There may be a final Income Tax return to complete for the deceased for the period from the preceding 6 April to the date of death.

Inheritance Tax is a tax which is payable on the value of the estate at the date of death. The current rate of tax is 40% of the value of the estate above the Nil Rate Sum, which currently is £325,000. (However it is also possible to use up any unused Nil Rate Sum from a deceased spouse’s estate so the tax free sum available is often much higher). For large estates, a detailed account must be submitted to the tax office and any tax due must be paid before the court issues Probate.

For further information or advice, contact James Shingleton, or another member of our elderly client team on 033 3344 9600, or complete our contact form.

 

heir, Inherit, Inheritance tax, Legacy, Probate, Wills

DIY Probate runs risk

News release from Solicitors For The Elderly

It is entirely possible to apply for probate and deal with an estate, without seeing a lawyer, but it’s not without risks warns legal group, Solicitors for the Elderly (SFE).

Many professionally drafted wills contain trusts to save tax, to avoid those who inherit paying care fees and to reduce the likelihood of potential disputes. SFE members have noticed an increase in ‘DIYers’ returning to them to seek advice when they have made a mistake or find the paperwork too tricky. Mrs A’s will had included a tax saving trust, but when her husband administered the estate, he paid the whole estate to himself. The solicitor was thankfully able to sort out the matter and avoid future complications occurring when Mr A eventually dies. In Mr G’s case, he sold some shares that had made a gain during the administration of his late sister’s estate and had to pay tax. If he had transferred the shares to himself first, before selling them, he could have avoided the tax.

Yorkshire Regional Co-Ordinator for SFE, Tom Morrish – a Partner at Morrish Solicitors – today said ‘People aren’t always aware of the complexities and assume probate work is straightforward. It is true that it can be, but it is just as true that sometimes it isn’t.  In all but the most straightforward cases, it is important to seek timely specialist legal advice that can actually save you money and worry.’

Many SFE members’ practices will offer to work in partnership with the deceased’s family to help and support them with the legal and technical work. As elder law specialists, members can even add value to their work, for example by identifying cases where money is owed to the estate for care funding, which should have been met by the NHS and assist in making a claim.

Ends.

heir, Inherit, Probate, Wills

How Willwriters and banks ruthlessly cash in on death

Reproduced with kind permission of  The Daily Mail.

The shameful exploitation of bereaved families has been laid bare in a damning new report.

This backs up evidence gathered by Money Mail into the high charges banks and some will-writing services make for executing even the simplest estates.

Distraught families can also be targeted by unregulated firms offering probate services for eye-watering fees.

When someone makes a will, they appoint executors to sort out their estate when they die.

Banks and specialist firms are offering cheap wills, having themselves appointed executor and then charging tens of thousands of pounds for executing the estate. 

Yet most estates can be dealt with by friends and family – with the help of a solicitor for more complex issues – for a fraction of the cost. consumer group Which? sent eight undercover researchers to make 42 visits or calls to solicitors, specialist will-writers and banks around Britain.

The researchers used a simple scenario. They posed as divorcees with two children aged over 18 who wanted to leave everything to them 50/50 and had assets of £270,000 – below the inheritance tax threshold of £325,000.

Rip-off charges

The Which? report found banks will charge on average £10,830 – around double the £4,759 charged by willwriters and £5,199 by solicitors for sorting out an estate.

The most expensive is Barclays, charging an average of £13,395 on a £270,000 estate. This includes 4.5 pc of the first £100,000 of the estate, 3.5 pc of the next £400,000, 1.5 pc of the remainder, plus £400 for each beneficiary and £75 for each asset.

Lloyds Banking Group, including Halifax/Bank of Scotland – which was not investigated in the Which? report – is also hugely expensive. our research discovered it charges 4 pc of the first £500,000 of the estate, 3 pc on the next £500,000 and 1.5 pc on any amount above that. This works out at £10,800 on a £270,000 estate.

Readers have also complained about the high charges levied by specialist probate firms such as ITC legal services. one reader says he was quoted £20,000 to handle the £500,000 estate of his aunt, almost four times the charge he was eventually quoted by a solicitor.

The sell

An estimated 90,000 people a year find themselves forced into accepting executors specified in their relatives’ wills. customers can be lured by cheap – or even free – will-writing services.

HSBC, for example, charges just £75 to write a single will.

The catch is that the bank will appoint itself as either sole or joint executor of the will and force bereaved relatives to pay through the nose for probate services when the customer dies.

Undercover researchers at Which? were not told this upfront when they phoned up to make an appointment. in three of the four visits, the HSBC salesman mentioned there would be fees for administering the will, but no one suggested the customer’s relatives could do it.

Taxpayer-supported Royal Bank of Scotland and Lloyds Banking Group also appoint themselves as executor. it is not compulsory to name Barclays as executor, although the will form recommends appointing a professional executor such as Barclays. solicitors came out of the survey rather better, with none recommending naming their firm as executor.

They all suggested the children – the beneficiaries of the will – were best placed to be chosen. it is usually possible to force firms to step down from their role as executor, but they are not legally obliged to do so. Adam Walker, from independent probate broker final Duties, says: ‘Some firms will fight tooth and nail if you ask them to renounce probate duties.

‘But in most cases a company will back down. The problem is most people who have just lost a loved one accept what they’re told and go along with it, even if they’re being ripped off.’

Earlier this month, Money Mail revealed how registrars, GPs, hospitals, churches and funeral homes are all handing out official-looking leaflets advertising the Bereavement advice centre, which appears to offer free, independent advice.

But those who call the free helpline or visit the website are directed towards ITC legal services. The firm then sends a salesman to a bereaved person’s home.

Lack of protectIon

A major concern over will-writing and probate services is the lack of protection for customers if things go wrong.

Those who deal with banks might be ripped off. But at least they have the protection of the independent disputes arbitrator the Financial Ombudsman Service. Similarly those given duff advice by their solicitor can go to the Solicitors Regulation Authority. But if you’re dealing with a ‘specialist’ will writer or probate firm, there is very little you can do.

Astonishingly, will-writing and probate is not regulated. Firms that offer these services need no training or qualifications. Most reputable firms are members of trade body the Institute of Professional Will Writers, which has its own code of conduct, but membership is voluntary.

Adam Walker, from Final Duties, who has been campaigning for statutory regulation, says: ‘It’s farcical. Anyone can set up a will-writing or probate service. I could recruit a tramp and he could be in business tomorrow.

‘If you want to buy a life insurance policy, you have to deal with a qualified, trained individual. If something goes wrong, you are protected. But if you want someone to look after your estate – which will typically involve much larger sums – you will often be dealing with an unqualified, unregulated, uninsured and untrained salesman.’

The Office of Fair Trading has worked with the Solicitors Regulation Authority and the Institute of Professional Willwriters (IPW) to introduce tougher guidelines for firms.

These include firms having to spell out charges and telling customers they don’t have to appoint a professional executor when they write a will. But it appears to have ruled out introducing statutory regulation.

David Stallibrass, of the OFT, says: ‘There is a difficult balance between ensuring good standards and ensuring everyone has access to will-writing services. Regulation will add costs for firms, which will be passed on to customers.

‘There is also very little evidence that the service of regulated solicitors is any better than that provided by unregulated firms.’

Poor advice

WHICH? reported concerns with the advice given by four of 12 specialist will-writing firms it visited.

One firm recommended it was named joint executor. The firm, from Northern Ireland, also recommended a complex package of services costing £1,763.

Among its recommendations were what it called a ‘family trust’ – to stop any divorced spouses or creditors that the Which? researchers’ children might have in future from getting hold of the money.

A Which? spokesman says: ‘A solicitor would not normally recommend tying up your money in this way, as a family trust is an expensive way to deal with things that might never happen.’

R.I.P Off

What you could be charged for Wills and probate:

Firm Cost of a single Will Cost of administering a £270,000 estate
Barclays £80 £13,395
HSBC £75 £6,874
Lloyds / HBOS £119 £10,800
NatWest / RBS £100 £12,220
Banks’ average £85 £10,830
Will Writers’ average £107 £4,759
Solicitors’ average £133 £5,199

Source: Which? And MoneyMail

The Bill Was £5,000 for Mum’s Estate

Soon after Angela Stevenson’s mother died in December 2008, she phoned the free Bereavement Advice Service helpline. 
Instead of getting the help she was looking for, she was advised to phone ITC Legal Services. The firm sent a salesman to her and quoted £2,712 plus extra costs, to be added to the bill at the end of the process. 
Mrs Stevenson, 53, from West Yorkshire, says: “They said it was very complicated. They also said there would be hidden charges and promised a ‘transparent fixed-fee service’.” In fact, Mrs Stevenson’s mother’s estate appears to have been straightforward. The final bill was £5,292.57. After querying it, the firm reduced it to £4,623.
An ITC spokesman says: “The fees we charge are competitive and accurately reflect the work undertaken. However, should a client raise a concern, of any kind, we will review their case immediately and sympathetically.” 

Ends.  For further information, please call 0113 245 0733 and ask for our Wills and Probate department.

Inheritance tax, Probate, Wills

Focus on phoney Wills

Reproduced with kind permission of Leeds & Yorkshire Lawyer.

Is it time for more regulation to prevent unqualified Will writers presenting problems for unwitting clients, asks Tim Walker?

Which of the following statements is true? Making a Will has never been easier. Making a Will has never been harder. 

In truth, you could find evidence to support both. On the one hand, Will writers (let’s forget just for a moment about solicitors) are everywhere – in newspapers, on the net, on the Tube, on the high street. On the other hand, Will writing is possibly the most unregulated of legal processes with almost anyone allowed to set up in business as Uncle Tom Cobley Will Writers Ltd, with all the chaos that leads to.

Meanwhile, the public is largely unaware of the dangers. A recent survey found that two out of three people think that Will writers are solicitors.

So where does this leave solicitors and how can the inexperienced, the uninsured and the unregulated Will writers be stopped in their tracks?

ACCOUNTABLE
Susan Bateson, head of private client department at Lee & Priestly LLP in Leeds, says: “Solicitors face so much regulation in everything we do. We are also accountable for our actions and have to be insured to the hilt to be able to practice. It seems unfair therefore that anybody can set themselves up and start writing Wills – documents that can have massive implications for surviving loved ones.”

In October, the Law Society warned that unregulated Will writers were causing major problems for probate solicitors who were being handed invalid or badly drafted Wills. In some cases, Wills have even gone missing because Will writing companies have been wound up, it reported.

A recent Law Society-commissioned review of regulation, carried out by Lord Hunt of Wirral, said that a ‘fringe legal market’ in Will writing, probate and claims handling was a risk to the public.

Susan adds: “We have to get the message across to people that solicitors have the training and expertise to write sound Wills. We have the experience and we keep up to date with rule changes on inheritance tax and other matters.”

INTESTACY
She also says that the other battle convincing people to make a Will in the first place has still not been won: “Recent changes to rules on intestacy may well confuse the issues. The amount married couples and those in civil partnerships with children can receive upon their partners’ death has doubled from £125,000 to £250,000. The rule change is sensible because it means that the limit now covers the average value of a house, but I just hope this is not seen as a signal that it is acceptable not to make a Will.”

Having said that people should make Wills, what is the profession to do about unqualified Will writers, apart from push for more regulation? Is there a problem with the cost of making a Will – are people just moving in search of a better deal?

Susan thinks there is confusion here and an inaccurate perception that making a Will is more expensive if you use a solicitor. She explains: “Because some Will writers offer a headline cost which seems appealing, it leads people to believe that they will get a good deal.  However, this is sometimes just a basic price and what often happens is that there are all sorts of add-ons to pay for. What we as solicitors can offer is a fixed price, so we need to educate the public that you can have a professional Will at a reasonable cost from your solicitor.”

Rita Leat, president of  The Fellowship of Professional Willwriters and Probate Practitioners, is also pressing hard for more regulation in Will writing.  The Fellowship conducted the survey which found that two out of three people thought all Will writers were solicitors.  She says: “It is quite alarming that the majority of the people we asked thought all Will writers were solicitors, especially as there are many Will writers out there who hold no training nor any type of qualification. People need to check the background of the person who is dealing with their Will to avoid difficulties for their family and loved ones later.

“Here at The Fellowship, we cannot stress enough how important it is for consumers to be aware of exactly who is dealing with their Will. There are a lot of excellent Will writers who offer an excellent service: however, we promote the highest standards of practice by ensuring that all our members have nationally accredited qualifications – namely the BTEC qualifications offered by Edexcel. Consumers should also ask whether the Will writer is a member of a professional body that insists on CRB checks and offers a compensation fund should things go wrong.”

Other survey findings included:

  • When asked to respond to the true or false statement that ‘Anyone can currently set themselves up as a Willwriter, as qualifications are not needed’, 82% of people thought that was incorrect.
  • 45% of people asked said they felt confused by the Will writing process and 21% took the attitude that they would rather write their Will themselves, despite the complications that could crop up.

With this type of ignorance around and with a demand of fast, off-the-shelf solutions, are solicitors fighting a losting battle to retain Will writing? Is the profession keeping pace with developments? How long before a Will writing App is created for your iPhone, for example? Some may scoff at  this, but there is already an App for conveyancing.

SAFE
Susan Bateson believes solicitors need to stress that where both Will writing and probate are concerned, solicitors are the safest pair of hands: “I have even heard that some funeral directors are offering probate services. Obviously that probate work will eventually be under the control of a solicitor, but people need to realise that they may end up paying up to 9% of the value of the estate if they take this route. Compare that to 2% if you go to a solicitor. And where probate is concerned, people need to know that the experience that solicitors have means that they can stand your corner when it comes to a dispute – for example, with the Revenue.

“The Legal Services Act will provide a fresh challenge, so we need to remind people that they can trust established firms of solicitors when it comes to arranging the most tax-efficient gifting of wealth from one generation to another. Probate is much more complex than many in the outside world would assume and this must never be an area which becomes unregulated.”

It seems there is an irresistable force for regulation in Will writing and any moves to deregulate probate further will be strongly resisted, but the battle must surely be one of educating the public that what happens to their estate when they die should not be left in the hands of the uninitiated.

Copyright Leeds & Yorkshire Lawyer 2010.

Charity, heir, Inherit, Inheritance tax, Legacy, Probate, Wills

Man fears eviction after his late mother leaves house to a cancer charity in her Will

By Richard Catton

A MAN has locked himself inside his Ryedale home because he fears being evicted after it was left to a North Yorkshire charity in his mother’s will.

Laborevics, 40, has become a recluse in the Norton house where he has lived for 32 years and fears a knock on the door from bailiffs any day will leave him homeless, according to his brother, Paul.

Their mother, Lily Yeomans, left the house to Yorkshire Cancer Research in a 1989 will, 15 years before she died.

But Paul, 43, said: “All of us assumed the house would go to John. When the will was read out it was a jaw-dropper to say the least.”

He said he could not risk losing tens of thousands of pounds by contesting the document in court, but said he could think of no reason why his mother would have chosen the Harrogate-based charity to benefit.

In the will, Mrs Yeomans left her estate to her then partner, Raymond Johnson, but stipulated that, should she outlive him, everything should go to the charity. After outliving Mr Johnson, Mrs Yeomans’ wish was carried out and the Commercial Street house was left to the Harrogate-based charity following her death in 2004.

To see the full article, click here.

Reproduced with kind permission from York Press.