Wills Estate and Probate Accounting
Wills Estate and Probate Accounting
Barnes Roffe is licensed by the ICAEW to carry out non-contentious probate work covering the obtaining of a grant of probate and dealing with the Inheritance Tax returns that may be necessary.
We can act where there is a will, as well as when the deceased has died intestate. This means that we are now not only able to assist clients with IHT planning and will drafting, but can also provide a fully inclusive service to include obtaining probate and estate administration.
Where appropriate a Barnes Roffe partner might act as executor, but our probate services can equally be provided to non-professional executors.
All too often, people put off estate planning. This is understandable as, it requires you to consider what will happen when your life is over, hardly something most of us rush to contemplate.
Consequently, estate planning often becomes a do-it-tomorrow task. When it suddenly becomes all-important, it might be too late. After all, accidents and sudden illnesses – such as Covid-19 – can and do happen.
This guide will help you prepare effective plans that will help ensure you control what happens to your estate.
What is Probate?
Probate is the official process of administering the estate of a person who has died and ensuring its distribution to those who will inherit, after discharging any debts and liabilities whilst also ensuring that relevant taxes are calculated and paid. Some estates can be very complicated, in which case having a probate specialist to advise you and make sure that all matters are resolved in accordance with the law, is essential.
How our specialists at Barnes Roffe can help you work through Probate
When a family member or close friend dies, it is not only upsetting but can often become even more stressful when trying to deal with all the complex legal and administrative issues that require urgent attention. Should the deceased’s personal representatives (executors or administrators) decide they do not want the burden of undertaking the administration of the probate process they will need to engage the services of a suitably qualified professional such as Barnes Roffe.
As probate and inheritance tax go hand in hand, as accountants, Barnes Roffe is fully qualified and has the specialist knowledge and experience needed to tie up all probate matters as efficiently and painlessly as possible, whilst also advising on how best to minimise the Estate’s liability to taxes.
To sum up, we can help remove the stress and make this complex process simpler for you by:
- Applying for the Grant of Representation
- Researching and assessing the value of the deceased’s Estate
- Preparing the estate accounts;
- Taking care of all the legal paperwork;
- Calculating the tax position to the date of death and for the period of administration of the estate;
- Completing inheritance tax calculations and agreeing the inheritance tax liability with HMRC;
- Obtaining grant of probate;
- Gathering assets and paying creditors and beneficiaries;
- Advising beneficiaries and executors of the tax implications connected with selling any assets;
- Preparing tax returns for personal representatives;
- Advising on the preparation of instruments of variation (to vary the terms of the will or intestacy).
What do we do when we are appointed act?
Once we are appointed to act our initial work will be to: -
- Review the will (and any codicils) and legacies to ensure they are valid and prepare any necessary affidavits;
- Ascertain who the beneficiaries are;
- Identify the composition of the estate* and ascertain whether a grant is needed;
- Send notification of death to financial institutions*; and,
- Value the estate. Where third parties are required, these will need to be commissioned. We are able to value assets such as private company shares.
The elements indicated * may be predominantly carried out by the executors in order to reduce costs.
Once we have been able to ascertain and schedule the various elements of the estate, we move to the application process.
There are 2 stages to the application process with which we can assist you:
- Complete an inheritance tax form – The IHT “Account” will schedule how much the estate is worth including property, shares, goods and chattels etc. The outcome of this valuation decides how much tax is liable to be paid on the estate. At this stage it is important to identify all the exemptions and relief that are available to the estate. The tax owed must be paid before you can apply for the Grant of Representation.
- Complete the Probate Application Form and file the application online. As HMRC has to confirm the value of the estate for IHT purposes there is usually around a six -week delay between the start of the first stage and the submission of the Probate Application. How long it takes to get a grant after application varies with the waiting times in the Probate office but on average takes 6 to 10 weeks.
Administering the Estate – What happens now?
Once the Grant of Representation has been granted our involvement can cease if the executors wish to collect in and distribute the estate themselves. If we are appointed to carry out the administration of the estate we will send a copy to the deceased’s asset holders, such as banks and building societies etc. and we can assist the executors in liquidating the deceased’s assets. This will provide funds to clear debts and pay any additional inheritance tax, income tax, or capital gains tax arising from the estate.
It is also important to give notice to potential creditors by placing an advert in the deceased’s local paper and in the London Gazette after which any further potential claimants have a fixed time of 2 months and one day to make a claim.
Preparing Estate Accounts – who gets what!
Once all claims on the estate have been investigated and all debts and taxes have been paid, we will help you distribute the estate assets to the beneficiaries as identified in the will, or by state of the law if there isn’t a will. All beneficiaries should sign a discharge form to confirm receipt of their assets or funds. Residuary beneficiaries will normally sign the estate accounts, that we will prepare for you, to confirm that they are happy to accept the amount left to them once all other payments have been made and confirm that they have no further call on the estate.
Why Choose Barnes Roffe rather than a Probate Solicitor?
- For Existing Clients – a lot of the work is already done!
We will already know a considerable amount about our client’s financial circumstances. For instance, we may have prepared their annual accounts and/or tax returns; be aware of their business and financial affairs and have a good understanding of the family situation. All of this helps the probate process enormously.
Most importantly, we will already have details of some, if not all, of their finances, assets and business dealings. This will save lots of time and money when it comes to preparing the necessary paperwork for the Probate office and HMRC.
- Not an Existing Client?
Probate and estate administration is essentially an accounting and taxation exercise and as accountants experienced in probate, we have all the expertise to tie up all probate matters as efficiently and painlessly as possible, whilst also advising on ways to minimize the Estate’s liability to taxes. Whilst a probate solicitor would normally still need to utilise the services of an accountant.
- Competitive Pricing
Traditionally solicitors and banks charge a percentage of the value of the estate to carry out any probate work. This can be as high as 4%. Furthermore, the time it takes them to gather all the necessary financial and tax related information can prolong the process.
At Barnes Roffe we have the specialist financial knowledge which means that we can carry out probate quickly and succinctly, keeping costs down.
It is difficult to estimate fees in abstract but as an indication: -
- If we were simply preparing IHT returns and a probate application for an estate of around £2M based on complete information from executors and the estate is not overly complex or fees are likely to be in the order of £2,500 plus VAT. In addition, the probate office fees would be disbursed and would be recoverable from the estate. It would likely take around a month to prepare the return and the application and the time from appointment to grant is likely to be four to five months taking account time for HMRC and the Probate Office to process the submissions to them.
- In the same case if we were to write to financial institutions for information and perhaps obtain a property valuation in order to value the estate this would likely take around a further three months and cost a further £2,500 plus VAT. In addition, we may have to pay for third party valuations which would be a disbursement and recoverable from the estate.
- In the same case if once we have a grant of probate, we then collect in the estate assets and hold them on client account until they are paid out to the beneficiaries after the creditors are paid. We will prepare tax returns for the estate as necessary and accounts for the estate showing the collection and payment out of the assets of the estate. This stage will take around three months (subject to the completion of the sale of any property assets) and is likely to cost around £3,000 plus VAT.
The foregoing is an indicative example and before commencing work on any appointment we will be able to provide both fee and time estimates based on the size and complexity of the estate. We will keep you up to date through our work both as to fees and the likely timescales.
- We are Tax Specialists
At Barnes Roffe we specialise in tax, so you can be confident that you will pay only the minimum amount of tax that needs to be paid from the estate. We will look into the inheritance tax, income tax and capital taxes, calculate the overall tax liabilities of the estate and we can also work with the beneficiaries to set in place plans to minimise their future tax burdens.
- We offer a personal, confidential service
We understand what a difficult time this is for family and loved ones. You can be confident that we will be discreet and understanding and that you can trust us to take away the administrative burden from you as much as we can and complete the probate process as quickly and painlessly as possible.
- ICAEW Compensation fund Complaints
Whenever we engage with a client, we specify a partner to whom you are able to complain if you are not satisfied in any way with our work. In addition, you can complain to the ICAEW How to make a complaint | ICAEW or to the legal ombudsman Bring your complaint to us | Legal Ombudsman . Our engagement letter will set out further details.
As with all our work we have professional indemnity insurance and in the event that you have a claim against the firm and the ICAEW has a compensation scheme in respect of probate work ICAEW Probate Compensation Scheme arrangements | ICAEW
For a free probate consultation, please call the office most convenient for you, or fill in the contact form and we will call you to discuss how best we can help.
Glossary of Probate Terms
The words used in probate can often be confusing, so we have provided a glossary of some of the more common terms to help better understand their meaning:
Assets passing by survivorship – Where assets are held in joint names they will pass to the survivor automatically rather than through the will and are excluded from the value of assets for probate purposes.
Beneficiary – The person who is the recipient of money or assets as assigned in the will.
Codicil – This is a legal document that amends (rather than replaces) a previous will. It may add or replace small provisions (e.g. a change in executor), or may completely change the majority of the will. It must conform to the same legal requirements as the original will have the signatures of the testator and two witnesses who do not benefit from the will in any way.
Deed of Variation – A legal document that allows the beneficiaries to change the terms of the will, even after the person’s death.
Grant of Probate – The legal process of administering the estate of a deceased person by resolving all claims and distributing their property according to a valid will.
Executors’ Oath – A written statement sworn by the Executors or Administrators of an Estate which accompanies an application for a Grant of Representation.
Estate – All the deceased’s property and possessions including stocks and shares etc.
Executor – The person appointed in the will to administer the estate of a person who has died.
Estate Administration – The process through which a deceased’s assets, (property, bank accounts, stocks and shares for example), are distributed according to their wishes.
Grant of Representation – A document issued by the court which enables the person, or people named in it, to deal with all assets of a deceased person (i.e. their estate). It allows money to be collected from bank and building society accounts, property to be sold or transferred and for debts to be paid.
Gross Value of Estate – The total value of the deceased’s property before deducting liabilities.
Intestate – A person who has died and not left a legally valid will.
Intestacy – The situation whereby someone has died without leaving a legally valid will.
Legacy – An amount of money or property left to someone in a will.
Letter of administration – In cases where there are no executors appointed, still living or willing to carry out the executor’s duties, this documentation is given by the registrar to appoint people to handle the estate.
Liabilities – Debts.
Net value of estate – The value after deducting liabilities.
Probate – The term used in England and Wales for applying for the right to deal with a deceased person’s Estate which is often referred to as administering the estate.
Testator – The person who has written and executed a last will and testament.
Will – The legal documentation that allows a person to instruct how their estate will be managed and distributed after death.
Discover more about Barnes Roffe
However to help us keep that promise and ensure that you ALWAYS receive accurate, detailed responses, please provide us with as much additional information as possible.
We will use this extra information to tailor your response and ensure that the right member of our specialised team contacts you.