Dealing with probate is rarely as straightforward as it seems and the rules around Inheritance Tax (IHT) can be a minefield to the lay person and causing very real problems for the beneficiaries of the estate, further down the line.
Many people appoint friends or relatives as the Executors of their Wills, believing that this course of action will save money on Probate fees and that those savings can then be passed onto their chosen beneficiaries, but this is often a false economy.
HMRC are now investigating approximately one in four estates that pay the death duty (IHT) and their investigations in 2019-20 have seen a massive £274 million in additional tax having to be paid amounting to an average yield of almost £50,000 paid in extra IHT tax, per case reviewed!
This is mainly due to the general public just not understanding the complex tax rules, rather than any deliberate attempt to underpay death duties.
Those unskilled in the administration of estates frequently fall foul of the rules, with gifted properties being the most common gift to “go wrong”, generating around £300 million for HMRC over the past three tax years.
Using a Professional Executor
You can appoint a professional with specialist knowledge, such as a solicitor or accountant, to act as your executor. This is particularly useful if your estate is complicated, or if you think a family executor would need help to do the job properly. The process of sorting out your estate (known as probate) can take some considerable time too, up to a year.
Appointing a professional executor helps ensure the administration is done properly and in a timely fashion, to keep things moving forward for your family.
A professional such as a solicitor will charge for their services as your executor, either through a fixed fee, an hourly rate or a percentage of the estate. Executors can also claim reasonable expenses for their work in dealing with your estate. These costs will be deducted from the estate before distribution.
Read our guide to chosing the right executor here.
At Panthera Estate Planning, we offer professional advice and help with appropriate planning. Every plan we create is bespoke to you, as everyone’s situation is different. To discuss your circumstances individually, please: