How long does it take to get a grant of probate, again?

Just for solicitors:  a grant ad coll is not a “fast track”…

Probate Service
Target Times for issuing a Grant of Representation:

7 working days from the date of receipt of your application

Example: application received 14/3/2016 would issue on 22/3/2016 provided there are no impediments.

If your application is stopped for any reason, the Grant will be issued 7 working days from the date of receipt of the correspondence clearing the stop

AD COLLIGENDA BONA GRANTS

Please note that an Ad Colligenda Bona application is not a fast track Grant but is a Grant limited for the preservation of the estate

An Order is required from the Registrar before an application can be made.

 

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Probate fees – a tax by any other name

 

The Ministry of Justice announced the consultation on probate fees last week.

 

https://consult.justice.gov.uk/digital-communications/fee-proposals-for-grants-of-probate/supporting_documents/probateconsultation.pdf

 

 

It is thought that new fee increases could be made effective from as soon as April 1 2016 – and there are many practitioners across the country who believe that this set of fee increases on probate fees is unjust, disproportionate and unfair.

 

Not only might these fees be unfair and disproportionate (the actual task of getting the grant of probate is already covered by the cost of the existing court fee) but the potential to charge quite high values of fees is seen by some as being similar to a tax.  Except the power to increase a tax is something that is given far higher scrutiny, both in the budget and in reactions to the budget – there is opportunity for more careful examination of the impact that increases in the tax burden will have on the behaviour of the populace – indeed, sometimes the reason for increasing taxes is so that the behaviour of the public is modified – towards the purchase of cars that consume less fuel, towards the purchase of particular types of alcohol – it is the primary example of applying a “nudge” philosophy – or behaviourist psychology techniques – encourage certain types of behaviour by reward, discourage certain behaviour by withholding reward (or rather, by making the retained money in your wallet significantly less).

 

Value of estate (before inheritance tax)             Existing fee       Proposed fee

Below £50,000 or exempt                                            £215                £0

Exceeds £50,000 but does not exceed £300,000    £215                £300

Exceeds £300,000 but does not exceed £500,000   £215                £1,000

Exceeds £500,000 but does not exceed £1m               £215                £4,000

Exceeds £1m but does not exceed 1.6m                       £215                £8,000

Exceeds £1.6m but does not exceed £2m                     £215                £12,000

Above £2m                                                                          £215                £20,000

 

Why would these increases be unfair?  Everything has to be paid for?

 

The probate court fees are already appropriate – the costs that are already being charged cover the cost of obtaining a one off service – this is a finite transaction – there are no ongoing case management issues – once the grant has issued, the court has no need for further supervision and intervention.  As a fee for a service, the fee is suitable.  To increase the fee so that it substantially exceeds the cost is unjust and unfair.

 

Obtaining a grant of probate is the rite of passage in most estates where there are assets that exceed £25,000 or thereabouts, since banks and building societies are frequently willing to release that sort of money without the need for any formalities.  In addition, there are many people who own assets jointly with a spouse or partner – and in those cases where assets are owned jointly, there is no need for a grant of probate in order for the asset to belong to the survivor.

 

So that’s alright then – all we have to do is to put assets in joint names and we’re golden?

 

Well, yes and no – just because assets are in joint names doesn’t mean that this is the best thing for an individual.  Putting assets in joint names whilst you are alive means that the other person can spend your money as if it was their own – potentially wiping out your savings and leaving you in a difficult situation.  If you were a vulnerable elderly person, you might be taken advantage of.

 

Putting assets in joint names can also have the effect that you are treated for some purposes as if you had made a gift of what you own – if the relationship you have with the other joint owner should become difficult, or they should themselves be in financial difficulties, your own money might be lost.

 

Just because someone receives money by survivorship after death does not mean that Inheritance Tax should not be paid on the estate.  Although the application for the grant of probate normally triggers the requirement to pay Inheritance Tax, the obligation to account for Inheritance Tax still applies, whether or not a grant of probate is required.  This is something that the public might easily not be aware of.  Failure to account to the Inland Revenue for tax that is due causes penalties in itself.  Failure to pay the tax that is due can cause penalties, and is likely to result in charges for underpaid tax and the interest on that tax.  Potentially, this means that problems can be stored up for the future, all because there was a desire not to pay this probate fee.    Trying to untangle what taxes should have been paid, the penalties and interest will be very stressful for families later on.

 

What do I do if I’m single? 

 

Good point  – you are going to need a grant of probate.  No matter who you leave your money to – even if you leave all that you have to charity, this bill will still have to be paid.  There is no Inheritance Tax to pay when you leave all your assets to charity, but still the probate fee will apply.

 

I thought it was free to leave everything to my wife?  Now you say she will have to pay?

 

Your executors will have to pay the probate fee, even if all that you have passes outright to your wife.  If you have made arrangements to give your wife everything for life, and then to go to your children (perhaps because you have been married before) then even though there is no Inheritance Tax to pay, there will be a probate fee.

 

How will my executors pay those massive fees?

 

Yes, that’s a problem.  When it is Inheritance Tax, you can pay a portion of your tax bill in instalments if your money is tied up in your house.   Usually your bank will only allow payments to be made for Inheritance Tax and for your funeral bill.  Perhaps the banks will start to allow payments to be made for probate fees.  It might take them a little while to get structures in place though.  Until then, it will be for your executors to produce the money out of their own pocket.  If they don’t have the money, they will have to borrow it.

 

This really sounds like a bad idea – who thought it up?

 

Yes it does.  And I can’t actually point to the Chancellor of the Exchequer and blame him for making the rules.  Still – it is “open for consultation” so feel free to comment directly.

Regulate the Probate Services Industry | Campaigns by You

Regulate the Probate Services Industry | Campaigns by You.

 
A petition to call on all probate service providers to be regulated in some way.

Because not all people who provide legal advice are regulated.  This means they may or may not be qualified to give legal advice.  They may or may not carry insurance.  They may or may not sign up to any standards of professional behaviour.

Because this is a time when families are vulnerable and where financial details are being exchanged, and the public needs to have some certainty that they can trust their advisers to do a proper job (and if they do not, there will be compensation) to not sell on their details, to administer the estate as efficiently as possible, whilst taking a reasonable amount of care.

Vulnerable people should be treated with respect, and not merely fodder for the mincing machine.  They need to be protected, because of their vulnerability at a sensitive time.

An unregulated business has no interest in anything but their profit, and remaining within the confines of the law. Whilst an unregulated business may choose to ascribe to a code of ethics, if that is not regulated, then how can it be enforced?  There is no obligation on such a company to even profess such concepts.

Open Letter to anyone who made a Will with HSBC and appointed them as Executors

Open Letter to anyone who made a Will with HSBC and appointed them as Executors.

 

It’s a good letter:  I’m not sure whether whoever reads it realises that it is carefully written and may have taken a good few hours to check and double check, particularly when it refers to the organisation(s) to whom the wills have been sold.  Just as “concerned” means “angry”  and “precise” means”nitpicking in the extreme” in legal terminology, the swathes of what is not said about Simplify and its associated companies speak volumes.

It might seem odd that your executors can sell on the rights to deal with your assets, as the bank have done here.  But this sort of thing has happened, by and large, for professional executors over the years, albeit perhaps not so obviously.  Law firms never die, they just get taken over…  successor firms can prove the wills of the prior firm if the will was drafted that way.  Or encourage the clients to make a codicil (and in doing so, both correct any massive errors in initial drafting and/or update terms).  It is no mistake that the wills stored by a firm are called a “will bank”.  Usually, however, with a whole firm takeover, the wills and live files, the contacts and reputation are all bound up together and described as “good will” valued for a greater or lesser amount than the desks, carpets and computers.  Slightly less clear that your will can be seen as a commodity in itself, for sale to another organisation for a price, whilst still being your own property as a client.

 

Who you choose to be your executors is a personal choice – you might prefer a professional executor because your family do not get on well with each other – or you think that it is too much of a burden for friends to bear.  That’s quite alright for you to make this choice – but as this letter rightly points out – the terms on which you appoint a professional do need to be made clear to you – they will charge for their work – and how they do this should be something you feel comfortable with – these are your assets, after all.

Some professionals are bound by professional codes in their conduct towards the public – solicitors are – you can make complaints to the SRA if you feel you have not been treated in a fair way.  Accountants have a professional body too – it is fair to say that complaints to a professional body can be incredibly damaging to the firm, and so a reasonable amount of time is spent in trying to do the right thing and not get complaints in the first place.

If you are to choose a professional, then it’s a good idea to see what institution regulates them – who is the person that they have to answer to when you are no longer alive to express your concerns – who can your beneficiaries turn to when they think they are being overcharged, or waiting for ages – is there anything or anyone to protect them?

 

Woman who disowned mother fails in claim on estate | STEP

Woman who disowned mother fails in claim on estate | STEP.

 

Conduct does affect the way the court views the situation of a child claiming for support under the IPFDA.  And a letter outlining the reasons for excluding a child has significant weight.

In considering the request, the judge was entitled to consider Wright’s conduct toward her mother – Mary Waters had left a letter explaining her reasons for disinheriting her daughter. A key element was that Mary Waters had sent her daughter GBP10,000 to invest on her behalf in 1998, but Patricia Wright later refused to return this money, insisting that it was a gift. In her letter of wishes, Mary Waters stated: ‘My daughter has already taken without my consent GBP10,000 of my savings’.

There had later been a serious falling-out between mother and daughter on other more personal matters. These quarrels culminated in Patricia Wright sending her mother a letter disowning her and wishing her dead, and stating that she did not wish to communicate with her any more. There was no further contact between them.

One might conclude that if mother and daughter had made it up and become marginally less estranged, the IPFDA letter, if unamended, might have been less effective.