Taking on a DIY Probate

chipfork

My partner's father recently passed away and I have been helping with valuing the estate and also looking at probate. The MSE Guide to Probate has been a really good starting point and there's a wealth of information in the forums and the Gov web site. This looks to be a "simple" estate so I don't believe I am taking on too much unless someone suggests otherwise. I have some questions though.

As far as the "simple" determination: it's a relatively small estate, virtually all the cash assets are in bank/savings accounts, there are no debts and the value of the property is around £150k. There is a straightforward will and the two next of kin (children) are executors.

1. Previous Joint Assets. My partner's mother passed away last year so everything was transferred into the father's name. An acquaintance suggested that this previously joint estate would have a bearing on the valuation of the current estate, is that the case? Even if it doesn't the total value should fall below the IHT threshold.
2. Valuing the Estate. We have gone through all the finances and have totalled all bank/building society accounts. How would you go about valuing contents and possessions? There are sentimental items of very little value. Virtually everything else including furniture and the TV is of an age that it has very little value. We would expect to pay to have the house cleared and there would be no financial gain in that respect.
3. Insurance Policies. The government IHT checker does not mention life insurance policies in their questions, or I missed it. How is this factored into the estate? This was a joint policy and is only now payable as the last person named is deceased. The policy states that it is not tax exempt, therefore is there tax or capital gains to consider too?
4. Expenses. The funeral director has suggested that the payment can be made from the deceased's bank account and that this is standard practice. Are any other funeral and incidental expenses deemed reasonable, i.e. can be levied against the estate? For example: funeral flowers, cost of probate, solicitor's fees if engaged, etc.
5. Future Additions to the Estate. There is a potential medical claim in respect to the deceased. Should there be a pay out, which wouldn't be anytime soon, then how should this be handled. I assume the government would need to be notified. Ultimately would this then be factored into the estate and be liable to IHT?

We are waiting on an interim death certificate as this is with the coroner's court which may take a couple of weeks to conclude. Any advice on the points above or anything I haven't thought of will be very much appreciated, thanks in advance. 

poppystar

A lovely clear post! I can’t answer everything’s but yes, you can certainly do probate application yourself (ie the executors can)

1. if all the assets from mother were left to father then they do all form part of his estate. Remember though that, assuming they were married, her NRB of £325k will also have passed to father - so he will have a total of £650k before tax is due. There is also additional available via residential nil rate band but it doesn’t sound as is you will need this (if you did then you’d have to do an IHT return too).

2. it almost certainly will be more costly to get rid of everything than you are likely to get but it is still worth putting down a nominal sum rather than nothing - the probate people suggested to me £500 when I asked this question.

3. Never dealt with insurances myself - I’m sure someone else will be along in a mo.

4. I don’t think you can claim for probate fees but you can for solicitors fees if you use one - but please don’t, it will generally quicker without especially on a small estate where there are no full IHT forms to complete. Lay executors can claim incidental expenses like postage costs but not charge for their services. Keep a record of all that is spent and that can be claimed against the estate when the final accounts are drawn up - clearly you won’t know all expenses at probate application time.

5. Not sure on the medical claim but I expect it will depend on who the payment is considered compensation to - the deceased or their kin. It does sound like the estate is probably far enough under the threshold to allow for any future payment in - unless you are expecting millions….

p00hsticks

1. Not sure what your friend is getting at - possibly that the mothers IHT allowances can be transferred for use by your father ? Whatever your mother left to your father (and he hasn;t spent) would now fomr part of his estate. 

2. General consensus is to put a nominal value of a few hundred pounds on house contents (personally I put £500). As you rightly say, it will probably cost more to clear than the contents are worth. Make sure anything potentially valuable (jewellery etc) is removed from the property ASAP   

3. Sorry, not sure on this one.

4. not sure about the funeral flowers, but the probate and solicitors fees can come out of the estate (although you may not have access to estate funds straight away - you may need to pay out your own pocket and reclaim later). Also as you suggest there is now an empty property, any costs involved in maintaining and then selling the house (e.g. house insurance). As discussed previously on this board, most utility companies are happy to freeze the account until the property is sold in these circumstances - you need to look for and speak to the specific bereavement department for the company - most large firms have them. The key thing is to ensure that house insurance is in place and valid; the insurance company need to know that the property is now unoccupied, and you need to know what additional restrictions (if any) the insurance company insist on in that case - e.g. checking the property frequently, removal of valuables etc. 

The executors need to keep records of expenses and moneys received and keep it separate from their own affairs - you don't usually need a formal executors account (although check when it comes to selling the house where the conveyancer is happy to pay money into) but the executors can just set up and use a separate bank account in joint names.  Depending on the sums involved, banks may pay out straight away on proof of ID, or they may want to see the grant of probate. 


5. Sorry, don't know.   

Keep_pedalling

With a property valued at £150k and a transferable NRB available from his wife’s estate the total IHT exemptions available are £800k so IHT is not going to be an issue. As long as the estate is below £650k the residential NRB will not be needed which will avoid the need to complete an IHT return.

chipfork

Thanks everyone, really helpful.

1. That's great clarification for my lack of understanding. It was the transferable NRB and total IHT exemptions, which will be significantly more the value of the estate, even if the life insurance pay out is included and a possible medical claim should lead to something.

2. We'll certainly put a nominal value on the house contents. All sentimental items, jewellery, cash and anything else of value has been removed from the house and noted.

3. We are reaching out to the insurers as no doubt they'll be familiar with all the ins and outs.

4. This is where my role fits in, I'm the methodical type so have spreadsheets for all the assets, income, expenditure and expenses. More importantly, it takes a significant burden from my partner and her brother.

5. We were considering a joint account for the executors should there be any income, e.g. from a medical claim. The bank account that exists is still active, we've made sure that the debit card is in a safe place and isn't used. There are still utility bills on direct debit, obviously we want to retain those services until the house is sold.

We are working through the laborious task of contacting utility providers, pension providers, etc. The council tax is stopped, they allow 6 months for probate and the sale of the house which is good. The TV licence is cancelled and we're holding off on the Sky TV and BT phone contracts as he had a Sky email and a lot of friends contacted him through that.

We're a little stuck at the moment as this has been referred to coroner's court and they have said they cannot provide an interim death certificate until they're complete which may be a couple of weeks. It may then go to an inquest.
This is due to the questions around the medical issue, a pulmonary condition which brought on a very sudden deterioration.

poppystar

The account should be frozen and utilities moved into the executors name….”executor of…” Most will have a bereavement department for you to speak to rather than use the usual contact number. You should not then have to pay bills until probate granted and funds are released. Some, such as the water companies, will also not charge where the property is empty. If empty you should also get insurance designed for that - they will put checking and heating conditions on it. Even if the current providers have said they will continue cover you may find that cover is now very restricted - basically I found that cover was pretty much limited to a plane falling on the property! With specialist insurance the cover was actually useful. Apologies if you’ve already discovered all this.

chipfork

poppystar said:

The account should be frozen and utilities moved into the executors name….”executor of…” Most will have a bereavement department for you to speak to rather than use the usual contact number. You should not then have to pay bills until probate granted and funds are released. Some, such as the water companies, will also not charge where the property is empty. If empty you should also get insurance designed for that - they will put checking and heating conditions on it. Even if the current providers have said they will continue cover you may find that cover is now very restricted - basically I found that cover was pretty much limited to a plane falling on the property! With specialist insurance the cover was actually useful. Apologies if you’ve already discovered all this.

This is a learning experience and that is really helpful, thank you.

msb1234

Now you should notify the bank and all utilities. Don’t use the bank account!  The bank will freeze the account, all DDs will be stopped and the utility providers will sort out what’s owed etc. I am dealing with my mums estate, she died in 2022 and her house still hasn’t sold. I just get a bill from Eon every few months and they are happy that it will be paid off after the house is sold. 

All funeral expenses can be paid from her bank account - just send all invoices to them and they pay directly. They paid for all funeral expenses including flowers, buffet for wake, room hire etc. 
I would open an executors account especially as there is a possible compensation claim pending. I did it through Barclays. Once funeral expenses have been claimed, her bank can transfer any remaining funds into the executor account, as can the insurance company. My mums insurance company would only pay out either to a solicitor or into an executor account. Have you notified the pensions service? There may be additional pension due or an overpayment.

Newly_retired

Have you used Tell Us Once? It will inform DWP, local authority for Blue Badge, DVLA etc.
The registrar gave me lots of information when I registered the death, including a reference number for TUO. 

It is worth getting a few copies of the death certificate, maybe 4 or 5 at time of registration. I gave one each to my fellow executors, I always keep one, and have one available to send away if requested, though many organisations accept an online copy uploaded.
My life insurance company paid me as spouse beneficiary and it does not form part of the estate. Yours may be different.
i opened a separate account for the estate, in my name but designated as estate account. Otherwise it meant all three executors going together into a branch, difficult when we live a hundred miles apart. 

I requested copies of statements from my husbands bank accounts and credit cards, which proved useful in discovering various direct debits for subscriptions etc. also I kept checking his emails for two months for the same reason.
There is a lot of work but you sound very organised.

chipfork

Thanks again everyone for sharing your knowledge and experience.

Some notifications have been straightforward, others which require the death certificate are on hold. We're waiting on the coroner, a death certificate, not even an interim one has been issued as yet.

Thankfully, much of the paperwork is available, it's still a time-consuming process.