The cost of obtaining a Grant of Letters of Administration (where a person has died and not left a valid Will) is £700 + vat = £840.
This will cover spending time with clients; explaining the way the law works where there is no Will (intestacy); receiving information about the nature and extent of the estate; preparing the Inheritance Tax Return in IHT 205; the application forms, preparing legal notices to other executors; any other matters which will be relevant to the case and which will be discussed and agreed. It isn’t possible to cover every eventuality in this information because everyone’s circumstances are different.
If the nature or size of the estate means that the full Inheritance Tax return in IHT 400 is required, the cost is £1,400 + vat = £1,680. This reflects the increased amount of work involved.
In complex cases, the cost may be higher which reflects the amount of work involved and details will be provided and discussed.
There are always payments made to third parties which are called disbursements and in a typical case these are the £155 court fee paid to the Probate Registry; £1.50 for each official copy of the Grant of Representation.
We also offer a full administration service which means dealing with the collection of the estate, payment of debts and liabilities, tax, sale of house and dealing with assets such as shares; preparation of estate accounts for approval by the residuary beneficiaries and distribution of the estate. We offer a range of service as explained earlier and Naomi will work together with families as far as possible to create a bespoke service for you and to provide the best value for money.
Naomi believes that as much money as possible should go to the person’s beneficiaries (whether persons or charities) and not in legal fees.
Fixed Fee Or Hourly Rate?
The choice belongs to the client and is made after full discussion with Naomi.
Naomi has worked using both types of paying for the service and there are pros and cons of both fixed fees and paying for the work to reflect the actual time spent in dealing with the matter.
The fee would be agreed at the outset and it cannot change. The advantage is that the client knows what the payment will be at the end of the day. It is paid from the estate.
The disadvantage is that it not possible to know exactly what will be involved in a case at the outset and an estate may seem very straightforward at the beginning and then there are complications such as additional assets or debts; family disputes; tax or benefit issues; problems in collecting the assets.
At the end of the day a fixed fee can be too high or too low and it does not always reflect the amount of work carried out.
The fixed fee would reflect the known facts about the estate at the start and would typically be between £1,500 for a straightforward estate and £6,000 + VAT in relation to a complicated estate.
In deciding what is a simple or complicated estate, factors such as the number and type of assets and liabilities, the number of beneficiaries and their whereabouts, family dynamics, are all relevant factors.
The hourly rate means that the cost is calculated in accordance with the actual work carried out on behalf of clients.
Naomi’s rate is £230 + VAT per hour and time is charged in units of 6 minutes, so this means that a letter costs £23 + VAT = £27.60.
Naomi would provide an estimate of costs at the outset which is reviewed as the case proceeds, typically an administration will cost between £1,500 and £6,000 + VAT.
Interim bills will be produced, agreed with clients and paid from the estate which avoids a big bill at the end. It is important that clients feel in control of the costs and don’t feel that costs are a mystery and that they are running up for no reason.
Remember that Naomi is always pleased to work with families so that they do what they can to reduce fees and involves them in the process and gives them control over the aspects they want to be in control of, such as dealing with the personal belongings.
The clear advantage of the hourly rate is that it reflects the time spent in dealing with the case and is fair to both clients and to the solicitor. It works on the basis that clients trust Naomi to do her job properly and efficiently, this has not been an issue.
The cost is open ended BUT remember that clients receive estimates and are kept informed about costs and interim bills are produced at regular intervals after the Grant of Representation has been made and there are funds to pay the bills collected from the estate.
As described earlier on, there are disbursements which are expenses paid to third parties which will include search fees (£2 per beneficiary); office copy fees (£3 per property); insurance; expert fees eg surveyor, accountant, valuer, clearance, stockbroker; Trustee Act Notices (approx. £220), the sale fees for property include estate agent and legal fees. Note that these expenses are listed in the estate accounts.
It is difficult to say with accuracy what the final costs would be in relation to an administration because the case can unfold like Pandora’s Box. It is clear that a simple estate involving few assets and few beneficiaries will cost less than a complex estate and numerous beneficiaries.
Examples, all based on real situations I have helped with over the years
Leanne was a young mum to Lottie and Alice, tragically Leanne died following a misdiagnosis of breast cancer and didn’t leave a Will. Leanne was living with her partner Adam, they weren’t married but the house the bank account were in their joint names and passed automatically to Adam. Leanne didn’t have any other assets. However, there may be compensation available because of the potential negligence involved in Leanne’s care which need s to be investigated.
Leanne’s next of kin are her two little girls and they would be the beneficiaries of the compensation which would form part of Leanne’s estate. In Leanne’s case, I work with the family to apply for a Grant of Letters of Administration and the application would need to be made by Adam as the girls’ father and he nominates a second person because two trustees are required by law to make the application and to act as trustees of the money on behalf of the girls until they reach the age of 18 years.
If the only reason to obtain the Grant of Letters of Administration is in relation to the negligence claim, the costs are covered as part of the claim and you are not required to pay directly.
In practice, very sadly I am involved in a lot of these types of situations.
Richard had been a very private man, keeping himself to himself, he died aged 75. Richard didn’t have any children, he had two brothers Ian who was still living and Peter who had died leaving a son. Ian had collected what information he could and told me that he thought that Richard had been divorced but he couldn’t be sure and couldn’t find a copy of the Decree Absolute, which is the legal document dissolving a marriage. No Will could be found.
The marital status of a deceased person is crucial in working out who is entitled to apply for the Grant of Letters of Administration. A surviving lawful spouse or surviving lawful civil partner (available to same sex only couples), has priority in making the application.
The first stage of helping Ian was to establish Richard’s marital status, although he had been separated, the marriage would still have been valid and subsisting if his wife was living. Contact was made with the wife who confirmed that the divorce had been finalised and we obtained a copy of the Decree Absolute.
The application for the Grant of Letters of Administration was then made by Ian on behalf of himself and Peter’s son who inherits his late father’s share of Richard’s estate.
Albert died aged 78, he had never married and had no children. He had been one of 9 children, all of whom had died before Albert bar one and her name is Ann. Of the 8 children who had already died, 6 left children. Albert had been a skilled engineer and had lived frugally, having had no wife or children to support. His estate was large and in fact so large that it was subject to inheritance tax.
In Albert’s case, the application for the Grant of Letters of Administration was made by Ann, on behalf of herself and the descendants of Albert’s siblings who step into their late parents’ shoes.
The administration and the division of the net estate was complex and I was pleased to deal with this and kept Ann fully informed and supported along the way.
Note that it is not correct to say that if a person doesn’t make a Will everything goes to the Government, this only happens if there are no blood relatives. Sometimes we need to instruct a genealogist to construct a family tree and trace the long-lost relatives.
Our service is tailor made for you, Naomi has over 30 years’ experience as a solicitor and over 20 years’ experience in this area of the law. She combines legal and practical knowledge to put her clients first and she aims to provide the best service possible at a difficult and sad time for her clients.
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