A will to help bereaved
AS WELL as mourning the loss of a loved one, bereaved families face the agonisingly slow process of tidying up their affairs and distributing assets in line with their will.
Executors need a grant of probate to administer somebody’s estate, but it is a complex process that typically takes eight weeks and often longer.
The Probate Service was in crisis even before Covid-19, as staff cuts and IT problems caused delays last year.
This year’s lockdown and rising death rate has increased the pressure on what is still largely a paper-based system, as offices storing vital documents such as wills have been forced to close.
Just one out of three legal firms say the time it takes to prepare probate is “reasonable”, and seven in 10 say the lockdown has made things worse.
The biggest hold-up is waiting for institutions to respond, according to the research from new bereavement platform Exizent, which aims to speed up probate by connecting data, legal firms, institutions and executors.
Chief executive Nick Cousins said executing a will is more complex than ever: “Too much time is wasted on administration, causing frustration, long delays and unnecessary anguish for families.” After registering the death
and locating the original will, executors need to go through the person’s papers and bank statements, to sort out their assets and any outstanding debts.
This involves contacting banks, lenders, fund managers, investment platforms and pension companies, checking with the local authority for outstanding council tax, and contacting HM Revenue & Customs.
A key step is to value the total estate, including property, and set money aside to cover any inheritance tax liability.
Andrew Wilkinson, partner at law firm Shakespeare Martineau, said recent delays have had significant knock-on effects: “Property sales have fallen through and the probate registry has lost original documents, resulting in extra expenses preparing copies.”
Stephen Ward, director of strategy at the Council for Licensed Conveyancers, said legal jargon adds to the problem.
Phrases causing confusion include a “pecuniary legacy”, which means a gift of money, a “specific bequest” referring to a gift of a particular item, and a “contingent legacy”, which is a gift subject to conditions.
Ward said: “The death of a loved one is stressful enough without having to spend time deciphering what your lawyer is telling you, so be sure to ask.”
You can apply for probate yourself or pay a solicitor, who will charge from £500 for simple estates to several thousand for complex cases.
For estates worth more than £5,000 you also have to pay a probate application fee of £215, or £155 if you use a solicitor.
Delays in receiving money can cause financial difficulties for families, and banks have often released smaller sums of up to £40,000 before seeing a grant of probate.
Gillian Coverley, a tax, trusts and estates partner at law firm Irwin Mitchell, said some have issued sums of up to £175,000 during the lockdown: “The danger is that this could go to the wrong people or they may innocently neglect to pay inheritance tax, causing unforeseen consequences,” she warned.
However, you may not need a grant of probate for estates worth less than £10,000, or if the deceased owned their assets jointly, as they will automatically transfer on death.