Inheritance Tax/Probate/Administering of Will – DIY?…

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  • Inheritance Tax/Probate/Administering of Will – DIY?…
  • Hi All

    My mother-in-law passed away last night and my wife and her younger sister (executers) are now in the process of starting all the administration for her funeral and probate.

    It should all be straightforward as there’s a detailed will, no mortage to pay off and no debts – but does anyone have any links to idiot proof step-by-step guides to the whole process if we decided to administer ourselves?

    There could be only one sticking point and that’s if my wife’s older sister contests the will. She’s be estranged for 10+ years and has been left a nominal £2000. But could she have any grounds to contest? Will was sorted with a solictor so in theory no loop-holes and this figure was allocated under their guidance.

    Also inheritance tax – her estate is likely to be around the £400,000 mark and this is just above the limit. Does her deceased husbands share count (died last year) – therefore no tax to pay or she classed as a single person for tax?

    Thanks in advance.

    Premier Icon Jamze
    Subscriber

    On the tax, yes she gets any unused portion of her husband’s allowance. So up to £650k (if it hasn’t changed).

    poolman
    Member

    Yes theres the residence allowance to add too, I think it’s 150k this year. But any deduction from her husband’s nil rate band, like potentially exempt transfers not running 7 years, have to be netted off.

    Looks like no iht liability, well planned.

    Ro5ey
    Member

    Sorry for your loss

    I like to say this as carefully as I can and please take it in the well meaning way I intend.

    Somethings are worth paying for.

    If it was me, and there was absolutely NO possibility of a contest, I would go no where near this ….. leave it to the pros … the amount of money spent surely is going to be a pretty small % of the total estate ?

    Good luck.

    Did this for my Uncle last year.

    Its relatively straightforwards, bit of donkey work to start with to get death certificates, then sort out probate (30 second trip into town to swear on some bible).

    Theres two types of IHT forms, a simple one that you can do online (or paper) which is basically a list of possessions, a few totals in the right boxes etc. You won’t need anything more than that one unless some certain criteria are failed (like, in my case, my Uncle cashed in his pension a couple of years before his death). The more complicated form looks a nightmare, with lots of ‘Add item 96b here, then subtract iten 54a’ etc. but once you get your head around it, it wasn’t too bad.

    It’s a bit of a plod, but I don’t think going through solicitors is any quicker – its the HMRC thats the delay.

    Some things were easier to sort out than others – the Nationwide were great, but the Post Office were a pain (gave wrong advice the first time so had to redo application for his savings account twice).

    Keep a copy of everything you send to HMRC. HMRC asked to repeat some details on another form and they had to tally up with original submissions – easy to forget what you put down especially when you’re guestimating price of pocessions etc.

    Administering will was literally writing out some cheques/transferring money.

    If any contests after that maybe get a solicitor involved, though not a massive leg to stand on if will is legit.

    Premier Icon maccruiskeen
    Subscriber

    One thing to watch out for at the moment is long delays in grant if probate. There was a surge of applications ahead of a change in the cost in April and the backlog still hasn’t cleared

    im not sure how people were deliberately dying ahead of the cutoff point to save money but somehow they were

    Post back on here if you have any questions. Things might change from area to area, but basically:

    Book appointment to get death certificate.
    Get a couple of copies.

    Wander over to all banks/savings etc. and fill their forms out to freeze any accounts.

    You can technically get access to the deceased money if you need to pay for funeral costs out of it, but if you can cover it yourself then it’s easier, and you tak that money out of will when the executor takes control (and before you write the cheques out).

    Go online to gov.uk and download the forms.

    In terms of utilities, British Gas were great and basically said no need to pay bills until everything sorted and house sold. Water was similar. Saga Insurance were top notch as well for his insurance to keep cover on.

    Premier Icon Jamze
    Subscriber

    Something here…

    https://www.moneysavingexpert.com/family/guide-to-probate/

    Been through this recently with both MIL and FIL, circumstances sound similar with wills all in place and inheritance tax.

    We had a family friend who was a solicitor, so let him do it. There did seem to be an awful lot of checking everything was in order, working through 7 years of finances to check for any gifts etc.

    On the estranged sister, who knows. With this in the mix, I think I’d at least look at the costs of a professional.

    Best wishes and good luck.

    Oh, and probably goes without saying but keep a list of all the outgoings in a spreadsheet. Its not a massive amount (apart from funeral costs) but bitty.

    Did this a few years back. Like others say, its not difficult but it can take time and you need to be methodical.

    There is a lot of online guidance, and all the required forms have detailed guidance as well. I can’t remember if this is the right link, but you might want to start here:

    https://www.gov.uk/when-someone-dies

    MrTricky
    Member

    Go DIY – it will probably be quicker and vastly cheaper. Legal people are generally neither quick nor cheap.

    My mum did this herself when my dad died following a long illness and it was all quite straightforward. It gave her something to focus on too, which she found helpful

    towzer
    Member

    I did my dads myself, MUCH cheaper, it was Scotland and I had some issues, if amount over ?36000? you get no help from sheriffs office, next to no online documentation (forms have to be filled in a specific way, with specific sections and some specific wording), is there an online example is there …., and an infuriating difference of opinion between documentation and the sherif clerk –
    “Where two or more people each provide funds to purchase an asset, each person’s share of the asset equates to their respective contributions.
    If there is no special destination, the deceased’s share passes under the Will or under the rules governing intestacy and you should include that share in the Inventory.”, I interpret that – as it was solely my dads account and I was joint for poa and monitoring purposes only so 100% of the money was declared – could they deal with that could they ….,

    Persevere though and you’ll get it done.

    money spent surely is going to be a pretty small % of the total estate ?

    Or not. My mum’s solicitor bill was 9,000sorting her husband’s perfectly simple will

    Thieving gits.

    Premier Icon Sanny
    Subscriber

    Sorry about your MIL. That is very sad for your family.

    In practical terms, much of what a solicitor does you will have to be involved in anyway.

    I have been doing this for my FiL’s estate and to be honest, it can be a fair bit of work but much of it you will be asked by the solicitor anyway so better to cut them out if you can.

    In Scotland, you would register the death in the first instance with the local authority. Costs about £50. You would then start pulling together the confirmation statement that lists all the assets of the estate. E.g house, car,contents, bank accounts,investments etc.

    For house and contents, you would need an independent valuer to value at the date of death. Expect to pay a couple of hundred for this. Investments can be valued by writing to the companies and enclosing a copy of the will and death certificate. Bank accounts just need a bank statement.

    With those, you can fill out a confirmation statement form. The key is to ensure there is enough detail to identify each asset e.g. For shares, give amount, value and ref no’s so the reader can link each asset to the estate.

    I found the Sheriff Clerk to be helpful. I just needed to add a legal form of words which he gave me and paid £275.

    There is a really useful handbook about dealing with deaths that is available for free that goes into proper detail.

    So to go back to your question, diy works and the HMRC website is actually ok to use as they publish guidance ‘re tax.

    Sounds like a simple estate so I would encourage you to do it and save approx 12 to 15 grand. In my experience, lawyers are onto easy money when it comes to estate settlement.

    Just keep a spreadsheet and receipts.

    Cheers

    neilnevill
    Member

    Sorry for your loss. I also went through it a year ago and I agree it’s simple enough but there’s a good bit too do and you need to be methodical.
    Apply for probate on line now, like macrusen said there is a backlog, but the new online process is much improved from the old paper process. (I work in hmcts reform). Macrusen, I totally agree re dieing to avoid the cost increase… Fortunately/unfortunately I wasn’t at the portfolio board when the service sro made that excuse (shortly after my dad had died and I’d just got through probate before the cost increase). My boss was. He very foolishly tried to suggest the cost increase was insignificant….. He rapidly regretted that comment. To his credit he apologized sincerely.

    Premier Icon FB-ATB
    Subscriber

    Sorry for your loss. My Mum used a solicitor when Dad died, was only £1k-£2k 7 years ago. Worth it for us as he suggested a deed of variation to the will. Think it also included charge for drawing up the DofV and giving me POA for Mum when needs be.

    You should be ok re the third sister as an amount is left for her, so it can be argued the MIL considered her on the arrangements.

    A colleagues Dad died a few years ago and 2 estranged siblings that were not mentioned at all successfully challenged it on the basis that their omission was an oversight.

    bigyan
    Member

    The sister can challenge the will if she believes it does not make “reasonable financial provision” for her.

    Defining “reasonable” is the fun part.

    Premier Icon Dickyboy
    Subscriber

    I’m dealing with a friend who doesn’t get along with his brother, even getting to see his fathers will is proving difficult.
    Dealt with my dad’s estate, pretty much all done online, just need a clear head when doing it and be aware that all the financial institutions will have different ways and requirements. No need to involve solicitors unless sister kicks off, but if you do decide to use them don’t be afraid to ask for estimate of costs – some charge flat(ish) fee, others charge % of estate. In my experience when I did try to use one they were worse than useless 🙄

    Premier Icon lowey
    Subscriber

    Sorry to hear your bad news. Condolences to all involved.

    If you have a detailed will, do it yourself. Its fairly straightforward. We have just completed Dads estate.

    Depending on how her assets are spread (pension, bank accounts, investments, house etc) then request a number of death certs, We got 8 for Dad, as every institution will request an original.

    You need to value her estate, get a valuation for the house, then copies of bank balances or statements of current value of investments and put it all together. You can then apply for a grant of Probate. Like the Death Cert, get a few copies of the Grant. You have to pay for each one but its not much.

    The previous poster was right, There is a current massive backlog of applications and it took us best part of 6 months to get Probate. There were a couple of issues which didnt help. Keep on at them chasing. Our application was Sent to a different Probate office without anyone telling us.

    Once you have probate, send out to all the institutions who hold her funds, nominate a bank account for it to be transferred into then distribute in accordance with the will. Once you have Probate then you can get the sale of the house going also.

    Its all pretty straightforward, however if it is contested then get legal advise.

    Premier Icon I_did_dab
    Subscriber

    Sorry for your loss. I did my Dad’s which was mostly simple as he only had two accounts at the same bank. Selling a small number of shares however has been complicated. Got grant of probate, told bank which accounts to send the money to, job done. My brother has done my Mum’s, it has been more complicated and time consuming. My bro is a retired accountant so he’s familiar with that stuff and has had the time to spend. One year on and it’s still not complete.
    As others have said, if it isn’t simple (e.g. property is involved), think about how you want to spend your time and effort.

    hjghg5
    Member

    We did my grandfather’s DIY. It helped a bit that my sister and I (both executors) were also his only descendants over the age of 18 and the main beneficiaries (there was also a bit to her kids), and she’d had power of attorney for the previous year so we knew where all the bank accounts etc were already and could be fairly confident that we knew of any debts.

    It took maybe 9 months start to finish (including sale of the house). It’s also possible to get the grant DIY then get legal advice on any complicated issues rather than getting a solicitor to do it all.

    [slight disclosure – I am actually a solicitor anyway, but have ever done any probate work so I’m not sure it helped that much other than having easy access to people in my office who could certify documents and do swears]

    Premier Icon kcal
    Subscriber

    Ah, sorry to hear that.

    Registration is relatively straightforward as above – take death certificate to local registrars – you may need to make an appointment, and may need (I can’t recall) to take a birth certificate and marriage certificate as well. Here in Scotland they can also put you on the system that alerts local council, DWP and so on to link up who needs to know.

    I ran off several copies of the certificate when doing mum’s estate – last year. I probably ordered a bit too many, but it allows you to write to relevant organisations in blocks and send them the certificate – all will or should return it, but if you’re relying on only one or two copies, it’ll take a while.

    When dad died 12 years ago, the family solicitor handled the estate. I’d say he did a only passable job – and cost was relatively high. I don’t think it was too involved, I don’t think it was top priority for him either. He’d taken over my uncle’s practice, and loyalty meant we went there. Mum subsequently changed to a local solicitor.

    Forward on to last year, mum’s affairs were in reasonable order, but there was an IHT question mark, a couple of policies that needed to be fully accounted for and a share portfolio that was of mixed value. The local solicitors were very good, and have a very efficient para legal estate practitioner on the case. She’s very good at organising stuff, and we’re nearly there (part due to HMRC losing a tax return). So a year on its still not settled – I can’t comment on the eventual cost, but in tandem with her, I (as sole executor) have been able to do the donkey work and allow her to handle the gazzilion forms.

    It also helped I was sole executor and beneficiary. I was happy to devote a few hours per week to moving things along. Seems to work.

    irc
    Member

    When my dad died I used a solicitor. This was for a fairly straightforward estate of around £250k. Before involving the solicitor I listed all my dad’s bank accounts, pensions, etc. I contacted them all (one pension UK, one in USA, one in Canada) along with the council, utilities, Dr/Dentist etc and kept a list of all telephone contacts, and copies of all letters to and from every organisation.

    Then handed everything over to the solicitor. Their charge was £1440 plus VAT plus various fees of course. I thought this was reasonable. Between the 5 benifiaries it was not a huge amount for the lawyer to wind up the estate and distribute it. THe final accounts from the lawyer were clear and showed everyone what the value of the estate was and where it had gone.

    During our initial meeting with the lawyer he seemed happy that we had organised things as far as we had before handing it over. Better than getting a bag random bag of paperwork.

    Top tip, get plenty of copies of the death cert. In Scotland anyway copies done at the time cost a bit less and it helps to have a few to post to any organisation needing a copy for their records.

    Time taken from death to paying the benificiaries their share was aprox 7 months including selling the house. Fairly efficient I thought.

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