When it comes to dealing with the affairs of a deceased relative or friend, more and more people are increasingly choosing to do it themselves, rather than use a Solicitor. The legal term for administrating an estate is known as “Probate.”
Most people choose the DIY approach to avoid having to pay professional fees. But you would pay for a Funeral Director to organise a funeral, so why not a Solicitor to ensure that Probate is dealt with properly? There are a number of risks you should be aware of if you are thinking about going down this route.
Firstly, is the Will valid and would you know if it was not? Would you know how to deal with the assets if there was no Will?
It is important that any Will is interpreted correctly to avoid paying money or distributing assets to the wrong beneficiary or paying at the wrong time.
If the estate is not handled properly, the person who administers the estate, known as the Executor or Personal Representative, may be personally liable for unpaid debts or to the beneficiaries of the estate.
Notably, one of the major liabilities of an estate could well be Inheritance Tax. The Executors are under a duty to report valuations of the estate to HMRC and to settle the Inheritance Tax due. If they fail to do so, or do not make the appropriate enquiries, HMRC can come after the Executors personally for the tax and any associated penalties or interest. There could be other taxes that are outstanding and need to be settled before distributing the estate.
As long as the process is carried out correctly, the Executor will not be personally liable for debts that the estate cannot afford to pay. If there are liabilities that outweigh the estate or the residuary gift of an estate, there are strict rules and procedures to follow.
Should you as Executor cause a loss to the estate, such as selling a house too cheaply or if assets are lost or mismanaged, then you could be held personally liable to any beneficiary that suffers as a result.
Anyone who is unfamiliar with the terminology and contents of a Will could easily misunderstand its terms which could lead to being sued by disappointed beneficiaries.
Probate is a very complex area of law and the amount of paperwork can be considerable.
If something goes wrong, ignorance of the process is not a defence for an Executor.
Therefore, it is important that you assess whether or not DIY probate is right for you.
If you have doubts about any issue in an estate, seek specialist legal advice and bear in mind that professional fees will be paid by the estate.
If you would like advice on this matter contact Lucy Watson, Sian Lias or Claire-Marie Selwood who will be happy to help you.