There are few areas of complex law which individuals feel they can tackle themselves, but for some reason, Wills and probate are frequently assumed to be areas for which no professional guidance is needed. In this article, we will delve into the probate process to determine when, at least in some cases, taking matters into your own hands is viable, and when specialist guidance is warranted.
What is the probate process?
At its core, probate is the process of sorting out and finalising the estate of a deceased individual. This includes ringfencing all of the assets of the estate, assessing all liabilities, payment of any inheritance tax, liquidating assets and distribution of the estate to beneficiaries. This is typically undertaken by an Executor stated in the Will. If no executor is named, or no Will exists, an application can be made by a beneficiary or direct relative to undertake the role of Administrator to complete the probate process.
Inheritance disputes on the rise
A recent article in the Law Gazette highlighted the extent to which inheritance disputes being heard by the High Court are rising considerably – from 227 in 2018 to 368 in 2019. One of the biggest reasons for this sudden leap in disputes appears to be the popularity of DIY Wills. In response to the increase, Christina Blacklaws, the Law Society President, made the point that given the large range of individual circumstances surrounding estates, “it is vitally important people consult a professional when writing their will. Probate law is complex and DIY wills can easily contain mistakes which render them illegitimate or difficult to administer.”
It is, however, important to draw the distinction between the Will itself, and the execution of the Will (i.e. probate). Whereas all Wills benefit from being drafted by legal professionals who have the knowledge and experience to ensure it is legally valid and covers all aspects pertinent to the individual, the most straightforward estates may not require the engagement of a Solicitor to ensure probate is carried out faithfully and legally following death.
When should I use a probate Solicitor?
It is highly recommended that an Executor or Administrators of a Will engage the services of a probate Solicitor in cases which may be more complex, and, therefore, may give rise to a dispute at a later date. Such circumstances include (but are not limited to) where:
- The estate is complex (i.e. involves assets in multiple jurisdictions and businesses)
- The Will’s validity is being questioned
- There may be a question over the suitability of the Administrator or Executor
- The estate is bankrupt
- There are complex tax rules involved
- The deceased resided outside of the UK for tax purposes
- The will creates a type of trust
- Relations between family members may be difficult
- The executors wish to limit their personal liability (see the case of Mr Harris below)
It is also worth handing the probate process over to a professional where the Executor or Administrator has any doubt over their ability to complete the process correctly, or simply does not have sufficient time. By pushing ahead in the knowledge you don’t have the resources or time needed to commit to completing probate, the Administrator may find themselves subject to a dispute from the estate beneficiaries who are dissatisfied with the pace of progress or not confident probate is being completed correctly.
It should also be remembered that any mistake made during probate may be deemed a breach of duty by the Administrator or Executor, for which they may be personally and financially liable.
We regularly see cases whereby errors have been made throughout the probate process, including failing to interpret the Will properly, incorrectly capturing all liabilities and debts (perhaps meaning a creditor is missed, leading to a dispute), incorrectly completing HMRC inheritance tax forms, and paying out proceeds of the estate prematurely before ensuring all other costs and debts have been repaid.
The price of getting it wrong
In one case, Mr Harris, the executor of an estate worth £1.2m, made an error when filing the inheritance tax return with HMRC, which cost him dearly. Due to a technicality of tax law, because the estate included land, two payments were due to HMRC, one up front, and one later. Mr Harris paid the initial bill, then handed the majority of the estate to a beneficiary on the condition they paid the tax bill when it came through. Unfortunately for Mr Harris, said beneficiary went on a permanent trip to Barbados and reneged on the promise made, leaving him with a whopping £340,000 tax bill. He appealed on the basis that as he no longer had control of the estate’s funds, there was no way it could be paid. However, the judge upheld that HMRC was in its right to pursue him for the money owed as he was personally liable; “It is no defence to any Inheritance Tax determination that Mr Harris may have transferred the assets of the estate to a beneficiary on the basis that the beneficiary would be responsible for the payment of the Inheritance Tax due,” said Judge Aleksander. “Nor is it a defence that Mr Harris was ignorant of his obligations, as a personal representative, to pay the Inheritance Tax owing.”
There is no lack of probate related information online; some which recommend DIY probate as a matter of course, while many point out the pitfalls. Rather than recommending one approach over the other, we believe it is firstly important to ensure you are fully informed, including understanding the complexity and potential risks of the specific probate to be undertaken, the resources needed to faithfully complete the process in the best interests of the beneficiaries, and the costs of requesting a Solicitor to complete the process.
If following your assessment, you believe the case is straightforward, there is no question over the validity of the Will, and you possess the skills and time necessary to complete probate, doing so without expert help may be warranted. On the other hand, if you are in any doubt, either at the outset or during the process, seek advice. The risk of making a mistake is simply too great a price to pay, both for yourself, the bereaved, and their beneficiaries. As with all aspects of law, if in doubt, just ask.
If you would like help with any aspect of Wills, estate planning, power of attorney, or any other matter, please contact us on 01202 802 807 to make an initial appointment with one of our expert Solicitors, Alexandra Livesey or Paul Solomons.