4 Reasons an Accountant is best placed to deal with grant of probate

What is probate?

Firstly, let’s look at exactly what probate is as it is not always an easy topic to talk about.

Broadly, probate is the lengthy administrative task of dealing with the financial and legal process of a deceased’s estate. It generally involves identifying the assets within the estate (e.g. property, money, investments and possessions), paying any amounts owed and distributing what is left in accordance with the will.

Probate can be carried out by yourself, with individuals applying for a grant of probate. However, it can be a very detailed procedure and will of course involve an element of tax. Therefore, many individuals will look for the advice of professionals in what is a very difficult time.

Depending on the complexity of the estate the process can take anywhere from 3 months to in excess of 12 months.

It is worth noting that if the deceased’s assets are worth less than £5,000 or all the assets pass directly to a spouse probate is not required.

Did you know Accountants can assist you with probate?

Up until 2014, probate could only be carried out by banks or solicitors. The ICAEW, of which we are a member firm, became the first approved probate regulator and licensing authority outside the legal profession.

4 Reasons an Accountant is best placed to deal with grant of probate

We believe there are four main advantages of asking an accountant to assist with probate.

1.Existing strong relationships

As accountants, we have an existing relationship and regular communication with our clients. Over time this relationship means we will have a detailed knowledge of the deceased’s financial affairs.

2.Knowledge

Alongside the existing relationship, accountants are well placed to support with probate as we have the accounting, tax, legal and administrative skills required to undertake this kind of work. In fact, many probate solicitors will still turn to accountants at some point as they will often have the information required for probate.

3.Getting the admin right

The aftermath of someone passing away is inevitably a very difficult time and it is often some weeks or months before their survivors start to address the “admin”, or probate as it is called. There can be pitfalls when completing this yourself and so we can support to get things rights.

4.Charges

Historically either probate solicitors or banks employing solicitors have handled probate applications, but such a closed market meant the fees they typically charged were quite large. As a consequence, some people try to do it themselves but the process, whilst not particularly complicated, isn’t entirely straightforward and between them HMRC and HMCTS guidance often confuses more people than it helps. We are transparent and competitive on our fees so individuals have the full picture.

A few words below from our managing partner, David Hartley:

“Acting for successful clients in the South East means there is often an inevitability of Inheritance Tax arising. I find it astonishing therefore how many either don’t have wills, or if they do, haven’t reviewed them in years.

In truth it is probably on lots of peoples “to do” list but in the busy lives we live it never quite rises to be the top priority. It is also a subject a lot of people don’t really want to think about, contemplating ones demise is depressing and it also often raises complicated family issues one would rather not address.

My advice is to keep it simple at first – if you are a married couple pop into a local solicitor and draw up wills that simply pass everything to one another, and if you have children to them if, heaven forbid, you are both in a car or plane crash. Simple, avoids intestacy rules and means there is something up to date if something unforeseen were to happen.

Then come and have a chat with me and one of my tax colleagues. We will spend some time understanding the family, your assets and give you a broad overview of your position as it stands. Even if you can’t or don’t want to alter anything at least you will better understand your exposure.

Two clients with seemingly similar assets may have quite different scenarios. One runs an engineering business worth £1m, has a house worth £800k, and other assets of £200k, and is married with 2 children. The other has the same assets, except his business owns property which is rented out and he is single. One may be able to pass all his assets to his children free of Inheritance Tax, the other may be looking at tax to pay of £670,000!

There are few silver bullets connected with Inheritance tax but to achieve the first outcome it needs their wills to do the right thing. In this example even the other chap may be able to make use of some straightforward annual reliefs which don’t appear to be much but which over time can make a significant difference.

Once we engage clients in these sorts of dialogues it becomes something we can review with them every few years, circumstances change, views change and different factors come into play. And therefore plans and strategies can be refined. Current laws around pensions mean it is sensible to deplete other assets rather than draw down on ones pension but legislation and therefore strategies may alter.”

In summary

As you can see, we do not only deal with probate but the long term planning in advance, which can assist with simplifying and ensuring your affairs are handled in the most tax efficient way. For more information please contact us.