To DIY or pay someone - probate

ossie48

I've acted as executor about 15 years ago for a simple case. No IHT, simple will, one bank account, house sale etc.

Sadly I find myself in this position again although the circumstances are slightly different . The deceased has an estate roughly valued at £1 million, consisting of a house valued at £400k. He has an accountant managing about £350k of investments (much of which were moved to a loan trust and the AIM market for IHT purposes - this was done four years ago). Outside of that are ISA's / cash and premium bonds. The will leaves the estate to three children.

To complicate things slightly various large sums were gifted within the last seven years from his investments.

I presume the accountant will provide me with a settlement figure, including funds free from IHT plus detailing the sums that were gifted and will be subject subject to IHT under the seven year rule. 

The rest seems straightforward, one share account, premium bonds, one bank (with three accounts) and a house to sell. I think I'm talking myself into doing this as I have the time, so a couple of quick early questions for the experts if I may.

In relation to the IHT threshold, is the residence NRB OF £175,000 automatically added to the general rate band of £325,000 as the property is being left to siblings.

Should I set up a separate bank account to handle the ingoings / outgoings ? 

Many thanks

msb1234

Id say, if you're not a beneficiary, to get a solicitor to take over the reigns.

Emmia

ossie48 said:

I've acted as executor about 15 years ago for a simple case. No IHT, simple will, one bank account, house sale etc.

Sadly I find myself in this position again although the circumstances are slightly different . The deceased has an estate roughly valued at £1 million, consisting of a house valued at £400k. He has an accountant managing about £350k of investments (much of which were moved to a loan trust and the AIM market for IHT purposes - this was done four years ago). Outside of that are ISA's / cash and premium bonds. The will leaves the estate to three siblings.

To complicate things slightly various large sums were gifted within the last seven years from his investments.

I presume the accountant will provide me with a settlement figure, including funds free from IHT plus detailing the sums that were gifted and will be subject subject to IHT under the seven year rule. 

The rest seems straightforward, one share account, premium bonds, one bank (with three accounts) and a house to sell. I think I'm talking myself into doing this as I have the time, so a couple of quick early questions for the experts if I may.

In relation to the IHT threshold, is the residence NRB OF £175,000 automatically added to the general rate band of £325,000 as the property is being left to siblings.

Should I set up a separate bank account to handle the ingoings / outgoings ? 

Many thanks

I would set up a separate bank account given the sums involved, and doing so ensures there is no possibility of mixing up monies.

Mojisola

msb1234 said:

Id say, if you're not a beneficiary, to get a solicitor to take over the reigns.

Even if you are a beneficiary, are you happy doing all the work for no recompense while saving the other beneficiaries money?
If any of the beneficiaries are likely to be awkward about things like how much you sell the house for or how quickly they want their share or any other issues, hand it over to a solicitor.

ossie48

Mojisola said:

msb1234 said:

Id say, if you're not a beneficiary, to get a solicitor to take over the reigns.

Even if you are a beneficiary, are you happy doing all the work for no recompense while saving the other beneficiaries money?
If any of the beneficiaries are likely to be awkward about things like how much you sell the house for or how quickly they want their share or any other issues, hand it over to a solicitor.

I'm retired so have no issue in spending my time on this, my wife is a beneficiary. I'm probably the only member of the family who has full knowledge of the deceased finances. I'm also a trustee in the loan trust and have been present at various meetings with the deceased accountant over the years. 

Looking at solicitors fees for this estate I could potentially save £15-20k if I was to DIY, I'm also aware solicitors can drag their feet (as evidenced on the forum) so its early steps and just building the confidence to crack on with it I guess. 

Can anyone answer the residence NRB question, so in the case would the threshold be £500,000?

cheers 

RAS

Was the deceased married or widowed?

Or single/divorced?

ossie48

RAS said:

Was the deceased married or widowed?

Or single/divorced?

Divorced 40 years ago, never remarried.

poppystar

It sounds like the potential complications are on the financial side. Rather than pay a solicitor to do probate you could certainly attempt it yourself paying for the services of the accountant or other financial advisor as necessary. Ditto if there is a legal matter you need support with you could pay for a solicitors advice on just that issue. This may work out cheaper and, as you rightly suggest, quicker. 

poppystar

AFAIK siblings do not count as direct descendants for residential NRB https://www.gov.uk/guidance/inheritance-tax-residence-nil-rate-band

ossie48

poppystar said:

AFAIK siblings do not count as direct descendants for residential NRB https://www.gov.uk/guidance/inheritance-tax-residence-nil-rate-band

My apologies I meant children so have edited, thks.

Daniel54

As I have done a number of  occasions I have been executor of estates close to or exceeding the IHT threshold ( including trusts in one instance) you can employ a solicitor for advice and guidance without paying £15k plus.

A lot of money and time can be saved by doing the legwork yourself - which is what many of us have done ,and have had to do anyway.

However the estate is not particularly vanilla, with the complications you have set out.

You might want to establish the costs from a reliable local solicitor (STEP if a trust involved) to review and ratify the probate/ IHT 400 returns ( if applicable) before submission.

With the large amounts involved a separate bank account is most advisable

Does the estate expect to be liable for IHT ? If so, you need to think about avoiding interest at 6.5% without a payment on account with six months of date of death.