After a death, family members sometimes decide to deal with probate and estate administration themselves. We take a look at the potential risks and why it can be an advantage to ask a professional to take on the job.
When someone dies their executor or, if they did not leave a Will, their administrator will be responsible for winding up their affairs and distributing the net estate to the beneficiaries. The executor or administrator can take on the work themselves or ask a probate solicitor to deal with it.
There is a substantial amount of work involved, including valuing the estate, filling in Inheritance Tax forms, calculating and paying Inheritance Tax, collecting in the estate assets and preparing detailed estate accounts.
Do I have time?
Winding up an estate can be exceptionally time-consuming. There is a large amount of correspondence and paperwork to be dealt with. If you are busy working or you have other calls on your time, you may find it difficult to set aside the hours needed to deal with the administration promptly.
You will generally need to complete matters within a year, unless there is a good reason for being unable to do so. Inheritance Tax must be paid by the end of the sixth month after the death. While this may seem like plenty of time, asset holders can take a while to provide information and the Probate Registry often takes several months to deal with an application for a Grant of Probate or a Grant of Letters of Administration.
Am I prepared to take on the risk?
As an estate executor or administrator, you could be held personally liable for any errors which cause a loss to the estate. This is the case even if the mistake was genuine and inadvertent. By way of example, if Inheritance Tax is wrongly calculated or paid late and a penalty is imposed, you would be liable for paying this yourself.
You will also need to consider taking the right precautions to limit your risk, such as arranging for statutory advertisements to be placed in the press asking for creditors and unknown beneficiaries to come forward. Without this, you could again be liable for paying creditors who were not initially aware of the death or paying beneficiaries who missed out on their inheritance because they had not been identified.
Do I have the capacity to deal with the administration?
An estate administration always comes at a very difficult time for those close to the deceased. Managing the difficulties of winding up someone’s affairs while also coping with the emotional burden can be hard as well as stressful.
It can also be the case that other family members may make the process harder. If they have differing opinions about how the administration should be dealt with or they impose pressure to carry it out more quickly, relationships can deteriorate and there is a risk that disagreements could arise.
Professional estate administration
The alternative is to ask a professional probate solicitor to deal with the estate administration on your behalf. They will have the time and the expertise to ensure that it is dealt with as quickly and efficiently as possible. They will also be able to eliminate the risk by meeting deadlines, placing statutory advertisements as necessary and making sure that the tax affairs are dealt with accurately.
Having a professional deal with the winding up of someone’s affairs can also substantially reduce the scope for family disagreements.
The cost of the estate administration can be paid for from the estate where a professional is used.
If you would like to speak to one of our expert estate planners, ring us on 01634 353 658 or email us at rob@pembrokewillwriters.com