When a loved one is lost, the person named as the executor of the will often considers handling the probate themselves to reduce costs. However, DIY probate comes with great risks, as making a mistake throughout this procedure can be extremely costly. Compass Accountants Director, Kerry Lawrance explains the importance of appointing an expert to ensure the process is managed correctly…
What is probate?
In essence, probate and estate administration is the financial and legal process which occurs after someone has died. The purpose of this is to ensure that relevant taxes are collected, any outstanding debts and monies are paid and the remaining assets from the estate are distributed to the relevant beneficiaries.
Whilst this can often be a complicated and a daunting procedure, it has been estimated that around a third of the UK’s executors attempt to manage probate themselves.
Unfortunately, whilst a DIY option might seem like an easy way to save money, it can cause huge complications and costs in the long run.
Many people are unaware that executors are both legally and financially liable for any mistakes made whilst managing probate. This means that the beneficiaries can hold the executor personally accountable if poor administration causes a loss to the estate.
For example, if an incorrect property value is not obtained, and as a result a beneficiary does not receive the correct amount of money, this shortfall must then be paid by the executor. It is also the responsibility of the executor to ensure all liabilities and debts are paid, so if there are unpaid or outstanding bills for inheritance tax (or any other taxes), executors are entirely responsible. Furthermore, HMRC has also clamped down on inheritance tax administration errors, meaning penalties can be particularly severe.
Time, effort and complication
If you practice something once, or maybe twice in a lifetime, it’s highly unlikely you will have mastered it. In our experience, people considering DIY probate, often underestimate the complication, time and effort the procedure requires.
Applying for the grant of probate, having the estate valued, completing paperwork and undertaking the general administration of a probate procedure, can be not only challenging, but also extremely time consuming, especially for someone doing it for the first time.
The beneficiaries of the will can also provide added pressure to the procedure given that it is highly likely there will be personal connections between themselves and the executor. Added disagreements, disputes and emotional reactions that a personal connection can bring will prolong and complicate the entire process further.
The cost of getting it wrong
Realistically, attempting to take on probate yourself comes with great risk. What may appear to be a quick save could result in you overlooking something critical, making an error or simply not following the correct procedure that could be of great personal expense.
How Compass can help…
As experts in probate, Compass Accountants provides a service that ensures the procedure is executed correctly, whilst saving you valuable time. Compass Accountants is one of only a small number of accountancy firms licensed to carry out probate services by ICAEW (The Institute of Chartered Accountants in England and Wales), and one of even fewer in Fareham and Portsmouth.
As accountants, we are fully qualified and highly experienced in dealing with all aspects of taxation, legislation, assets, liabilities, preparation of accounts and estate planning, and so we consider ourselves to be in the perfect position to assist with probate services.
Up until December 2014, the provision of Probate Services was limited to solicitors, who have traditionally charged a percentage of the value of the estate. We work on a fixed fee basis and can offer a real value for money alternative.
At Compass Accountants, we will be able to guide you through the complications of inheritance tax, income tax and capital taxes, ensuring that the amount of tax that needs to be paid from the estate in minimised. Furthermore, we will work with you (and any of the beneficiaries) to set in place plans to minimise their future tax burdens.
If you are interested in booking an appointment for a free consultation for probate services- or would simply like to ask us a question, please feel free to call us on: 01329 844145.