5 August 2024
AMD’s Sarah Trigg, Solicitor and Trust and Estate Practitioner (TEP), outlines some of the risks involved with DIY probate.
It is becoming increasingly common for individuals to deal with the administration of a loved one’s estate on their own without instructing a solicitor to assist them. This is perfectly fine in principle, but in practice, there are many important factors to consider and a number of risks to be wary of.
Valuation:
To apply for the Grant and complete the inheritance tax return (if required), the assets and liabilities of the estate at the date of death will need to be valued. It is important that full enquiries are made to accurately value the estate from the outset. The person administering the estate (the personal representative) should consider instructing a company to carry out a full asset search to ensure that there has been a thorough investigation into the estate. Failing to identify all assets at an early stage may result in considerable delay further on and could result in fines from HMRC for understated inheritance tax.
Beneficiaries:
The personal representatives have a duty to ensure that the correct beneficiaries are identified. Wills are normally drafted in a way that most people can understand but there are often complexities, particularly if the Will contains a trust. There are sometimes difficulties with home-made Wills which are badly written or do not dispose of the entire estate. Professional advice is recommended in these situations.
If there is no Will, the beneficiaries will need to be identified according to the rules of intestacy. A common misconception is that a surviving spouse will inherit the entire estate. In fact, if there is a surviving spouse and children, the spouse is entitled to the ‘personal chattels’ and a statutory legacy (currently of £322,000). The remainder of the estate will be split so half passes to the spouse and half to the children in equal shares.
Distributing the estate:
The increase in blended families results in a greater risk of a claim against the estate from an unknown beneficiary. An individual has six months from the date of the Grant to bring a claim. The personal representative should consider placing a notice in the Gazette and a local newspaper to allow any person with a claim against the estate or an interest in it to come forward within a two month timeframe. Distributions to beneficiaries should not be made until these notices have expired. This will protect the personal representative from being personally responsible for money owed to any unidentified creditors.
A full set of estate accounts should be prepared to ensure that all liabilities are settled and avoid an overpayment to a beneficiary. The personal representative may have to pay any remaining debts and tax bills personally if they distribute the estate and do not keep enough money in the estate to pay them.
Our Probate team understand that dealing with the affairs of a loved one after death can be complicated and stressful. If you would like to get in touch to see how we can assist you, please call us on 0117 9621205, email info@amdsolicitors.com or drop in to one of our four Bristol offices.
