Most probate practitioners have come across clients who report the death of a relative, come to the office to collect the will and advise us that they can deal with the probate themselves. It is not uncommon for the same client to return a few months later looking harassed, carrying boxes of papers and correspondence, and very keen to hand the whole lot over and get someone else to do it for them.
Applying for grant of probate
In order to apply for a grant of probate, you have to obtain a date of death valuation of all assets held by the deceased and complete a very detailed tax form for the purposes of Inheritance tax (IHT). It is understandable that many people assume that this will be a fairly straightforward form filling process.
However, in reality the forms require a good knowledge of inheritance tax legislation, which becomes more complicated year by year, partly as a result of the need to close down schemes to avoid IHT and partly as a result of government changes to the nil rate band.
You must declare all gifts made in the last 7 years, although gifts made from surplus income are disregarded and there are annual exemptions. If taper relief applies, then a lower rate of tax is chargeable.
This is a minefield. You have a duty to the Revenue to declare the relevant information and you have a duty to the beneficiaries to apply for reductions and reliefs where you can.
The client may not be aware that it is possible to apply for funds from the deceased’s bank account to pay for the funeral expenses and also for the Inheritance Tax (IHT) which has to be paid before you apply for the grant of probate.
You may not realise that not all the appointed executors need to apply for the grant of probate. They can agree that one person will deal with the estate with power reserved to the remaining executors. This will work much more smoothly in practice as the documents need only be signed by one person.
You may not realise that if the executor sells shares within 12 months of the date of death and makes a loss, they can claim refund of IHT. Similarly, if an executor sells a property within 4 years of the date of death for less than the date of death value, they can claim a refund of IHT.
Executors must also collect tax deduction certificates and may have to file an income tax return for the administrative period.
If you apply for a grant of probate in person, the court fee is higher as the court draft the legal documents for you. The process is also slower.
Dealing with the estate without a solicitor may well be a false economy, not only in respect of the time and effort involved, but also in terms of progressing quickly and ensuring that the correct amount of tax is paid.