Common Problems With DIY Probate

If you have been appointed an Executor, or if the deceased died intestate, an Administrator, the process of obtaining Probate may seem, at first glance, relatively simple.  And it sometimes is.  For estates valued at £5,000 or less, a Solicitor does not normally need to be involved.  However, thanks to the exponential rise in house prices over the past 15 years, many estates are now valued in the region of six or even seven figures.  More people than ever are self-employed with business assets forming part of their estate and second homeownership has also risen with 2.4 million households in England reported owning at least one additional residential property in 2018/19.

For Solicitors, DIY Probate matters frequently end up on their desk rife with mistakes.  This is because few people understand the number of steps involved in obtaining a Grant of Probate, the level of knowledge needed, the amount of paperwork that accumulates, and the sheer amount of time the Probate process takes.

Below are some of the common problems we encounter when dealing with a DIY Probate.

The Personal Representative (this term covers both Executors and Administrators) does not follow all the Probate steps.

To administer Probate correctly, several steps must be followed, including:

• Registering the death of the deceased.
• Reviewing the Will and communicating to relevant people any particular wishes the deceased had concerning their funeral.
• Applying for the Grant of Representation (a document provided by the court enabling you to manage the estate of the deceased)
• Collect and catalogue the estate (including money, possessions, property, and investments)
• Informing all applicable government agencies, banks, building societies, insurance companies etc of the death and close the accounts.
• Liquidation of assets (e.g. selling property of the deceased)
• Pay any Inheritance Tax due.
• Settle any outstanding debts of the deceased.
• Distribute the contents of the estate as directed under the Will or the Rules of Intestacy.

The Personal Representative runs out of time or does not have the knowledge needed to manage Probate.

A relatively straightforward Probate takes around six to 12 months to complete.  Not only does the above steps need to be completed, but receiving replies from banks, accountants, HMRC etc can all take time.  If a complexity arises, or there is international-based property/assets involved, Probate can take over a year to finalise.  To achieve the six-to-12-month timeframe, you would need to devote several hours per week to the task.

Although there is no strict time limit on Probate, beneficiaries of the Will are likely to want their inheritance as quickly as possible.  If you are under pressure and lack the knowledge around matters such as calculating inheritance tax, a mistake can easily be made.  For example, Inheritance Tax must be paid six months after the death of the deceased.  Failure to do so will result in interest being charged until the tax is paid.  Often there is not enough money in the deceased’s bank account, meaning you may have to apply for an Executor’s loan.  If you do not trace all the deceased’s creditors and pay them all they are owed, those with outstanding debts may make a claim against the beneficiaries and bring legal action against you.

Why it is worth investing in an experienced Probate Solicitor

We regularly see cases involving significant mistakes being made during the Probate process, including:

• Not interpreting the Will correctly
• Not identifying all liabilities and debts.
• HMRC Inheritance Tax forms filled in incorrectly.
• Beneficiaries being paid out too quickly.

Most Personal Representatives are unaware that any errors made during the Probate process may be deemed a breach of their duty, resulting in them being personally and financially liable.  And errors are simple to make.  In 2019 Glyne Harris, an Executor of a £1.2 million estate, filed an HMRC Inheritance Tax form and paid the initial sum due.  However, because the estate included land, the remaining tax balance could be paid later.  Mr Harris distributed the bulk of the estate to a beneficiary on the understanding they would pay the remaining balance of the Inheritance Tax.  You can probably guess the outcome of this sorry tale – the beneficiary skipped off to the Caribbean and HMRC came knocking at Mr Harris’s door for the remaining tax owed which amounted to £340,000.  He appealed on the grounds that he no longer had access to the estate and therefore should not be held liable.  However, Judge Aleksander held:

“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.  Nor is it a defence that Mr Harris was ignorant of his obligations, as a personal representative, to pay the Inheritance Tax owing.”

Unfortunately, as illustrated above, the law can be harsh.  Although the Probate process may initially look easy, it is actually complex, time-consuming, and often highly stressful.  Investing in the advice and representation of an experienced Probate Solicitor will ensure you carry out your duties as a Personal Representative correctly, sparing yourself and the beneficiaries the possibility of Probate being challenged and mitigating your risk of personal liability.

To discuss anything mentioned in this article, please call us on 02476 231000 or email enquiries@askewslegal.co