More and more people are looking to carry out their own probate without wanting to instruct a solicitor – generally to keep costs down but also as a result of the digital age we live in and the availability of tips and advice on the internet.
However, before deciding to take on this task, it is important that you fully understand the risks involved.
What is the role?
I think the best way to explain the role of an Executor/Administrator is to say that they close the doors on all the affairs of the deceased, and distribute the estate in accordance with their wishes or in accordance with statute where the deceased has not left a will.
What are the risks?
The following list is not exhaustive or in any particular order:-
- The first difficulty is knowing what the actual estate of the deceased is. If an asset is missed on a taxable estate it will mean that not enough Inheritance tax has been paid, and when the asset comes to light at a later date there will also be interest to be paid on top of that.
- Understanding the will and what it is actually saying. Legal jargon can be confusing and you will need to know how the estate needs to distributed. Is there a trust or is the gift being left directly? If you interpret the will wrongly then you may be sued by the beneficiaries who should have inherited under the terms of the will.
- If there is no will then you will need to understand the rules of intestacy and ensure that you have a complete family tree. This is essential to ensure that the estate is distributed correctly or, again, you could find yourself being sued by the people who were legally entitled to the estate under the rules of intestacy.
- There will be a lot of paper work. Paper work that you will need to sort through, paper work that you will need to complete and paper work that you will need to save in case there are any issues after the estate has been finalised that may crop up later for dealing with.
- You will need to understand the taxes that might be applicable in the estate. Those being:
- 1.Income tax for the year in which they have died and also income tax for any income received during the administration period.
- 2. Capital gains tax for the year in which they have died and during the administration period.
- 3. Inheritance tax for the deceased’s estate – this will include understanding the rules on the residence nil rate band and lifetime gifts.
- Probate takes time: weigh up how much time you have to devote to finalising the probate. If you take over a year, you may find that there is interest to be paid on legacies or intestacies, and that may result in unhappy beneficiaries because this will impact on what is available from the estate for other beneficiaries.
It is very important to remember that you will be responsible for administering the estate correctly. You could become liable for mistakes and for acts you omit to undertake. You could also be held personally accountable by the beneficiaries if you cause a loss to the estate through poor administration.
My best advice is to seek professional advice from a private client practitioner, preferably someone who has a STEP membership as this is a quality mark to look for – it means that they are a Trustee and Estate Practitioner (TEP) and are specialists in this area of law.