Probate costs Archives - MLP Law

Understanding Probate costs and how to reduce them

Dealing with the probate process can feel overwhelming, especially when managing financial matters and expenses. There are various costs associated with obtaining probate and handling estate administration, and this article explores these costs and strategies to lessen their impact.

What costs are usually involved?

  1. Application fee:

In obtaining a grant of representation (probate) there is an application fee, which is payable to HM Courts and Tribunal services, upon application.  The grant gives you the legal authority to administer a deceased’s estate.

At present, there is an application fee if the estate is valued over £5,000. The application fee is currently £273. There is no fee for estates worth £5,000 or less.

 

  1. Inheritance tax:

When dealing with an estate, it is important to ascertain whether it will be subject to inheritance tax. This will depend on the value of the deceased’s estate and who the estate is being left to.

There are different reliefs and exemptions available for estates. The rate of tax on death is 40% and becomes chargeable on assets over the available nil rate band (currently £325,000).

Seeking professional help can determine the tax liability and any potential reliefs or exemptions that may be applicable.

 

  1. Professional valuations:

An important part of the estate administration is valuing the deceased’s assets and liabilities. It is important to obtain accurate information as the value of the estate may impact probate fees and inheritance tax calculations.

As such, it may be necessary to instruct professionals to carry out valuations to ensure that the process is accurate and compliant. This could include property valuations from estate agents or surveyors, valuations of business assets and personal belongings.

 

  1. Disbursements:

There are several expenses which are associated with probate and estate administration, including bankruptcy searches, bank transfer fees, legal statutory notices, trust registration, identification searches and much more.

These expenses are often associated with an estate and are required to ensure that the personal representative has completed their responsibilities as best as possible. Failure to comply with certain requirements and procedures, could result in personal liability for an executor or personal representative.

 

  1. Solicitor fees:

If you instruct a solicitor or legal representative to assist you on behalf of the estate, they will charge a fee for their services. Their costs will vary depending on the complexities of the estate.

 

Mitigating costs and probate

Even though a grant is required in some circumstances, irrespective of whether the deceased left a will, there are numerous options available to you to help your beneficiaries and reduce costs.

 

  1. Prepare a Will

A will is a vital part of planning for probate and your estate. With proper advice and guidance, you can review the likely costs involved in your estate and plan for these accordingly.

Providing your executors with clear instructions ensures that there are no uncertainties following your death and prevent hidden costs from arising. As part of your Will review, your solicitor will be able to provide advice and guidance on how best to prepare and mitigate costs including inheritance tax planning.

 

  1. Inheritance tax planning

As mentioned, seeking professional advice on estate planning can significantly reduce the tax liability on death. Much of estate planning involves lifetime transfers and utilising exemptions and reliefs available to benefit from lower tax liabilities. When considering ways to reduce the value of your estate, you could consider:

  • Gifts from the estate
  • Gifting assets into a lifetime settlement/trust
  • Tax friendly investments
  • Life policies

 

How can mlplaw help?

To assist with a transparent probate process and gain an understanding of the costs involved, it is important to seek professional assistance. At mlplaw our specialists can advise you on the process and provide clear and concise advice for you and your family.

By offering estate planning suggestions and discussing the costs with you, you will be able to reduce the difficulties faced by your loved ones, following your death.

Our specialists offer a full range of estate administration services, guiding you through the process and ensuring that your wishes are carried out.