The simple answer to the question “What are probate costs?” is to quote the cost of the probate application fee which is currently £273 for estates over the value of £5000. If the estate is valued under £5000 then there is no probate application fee.
Full details on the current application fees and details of costs for additional copies of the probate documentation can be found on Applying for Probate – Fees: Gov UK
However, in reality there are numerous other costs associated with probate.
The Associated Probate Costs
If the estate is small and the administrators or executors of the estate deal with the probate without professional assistance, the application fee plus the time it takes to complete the probate administration could be the only cost of probate. However, when estates are more complex and involve property, investments, inheritance tax calculations and payments plus multiple, possibly missing, beneficiaries and many other possible variations the costs can add up.
Although it should be noted that most, if not all, of the probate costs will eventually be claimed back from the estate before the estate is distributed to the beneficiaries. This is assuming that there is enough money in the estate to pay. Sometimes estates have debts which need to be dealt with before an estate can be distributed, so the executors or administrators need to consider what happens to debt when someone dies.
When the value of the estate can cover probate costs, a problem can occur when the funds are not readily available from the estate, for example they are tied up in property or investments. In this situation the administrators or executors are expected to fund the costs via their own personal funds or via an estate expense loan or inheritance tax loan. If personal funds or loans are used to fund probate costs both the loan and any associated interest are normally paid from the estate fund before distribution to the beneficiaries.
What are the Associated Probate Costs?
Professional Fees
A probate solicitor or probate practitioner is not essential to complete probate process, however it is highly recommended to seek professional assistance if the estate is in any way complex. There are risks with being an executor or administrator including the possibility of being held personally liable for any mistakes. The amount solicitors charge for probate depends on the size and complexity of the estate and whether they assist with applying for the Grant of Probate / Letters of Administration or if they are instructed to carry out the full estate administration. If you do get a quote, ensure you understand the difference and ask the solicitor to explain exactly what’s included in the probate quote.
Inheritance Tax
The Grant of Probate cannot be paid until the Inheritance Tax has been calculated and at least part paid. Inheritance Tax is not payable on every estate, it depends on the value of the estate and the applicable Inheritance tax thresholds. It can be a significant outlay but is one that will be claimed from the estate.
When a probate property is involved
When a property is part of the estate there is likely to be numerous costs. For inheritance tax purposes the property will need to be independently valued to satisfy HRMC requirements and many valuers charge a fee. If left unoccupied it’s highly recommended to get Unoccupied Property Insurance. If the property is unoccupied, utility bills will need to be paid and the house will need to be properly maintained and, if the house is to be sold, there will be estate agent fees. If there are no local family or friends to carry out the task, a house clearance service may be required.
Probate Insurance
Every probate is different and will therefore involve different types of probate costs. For example, if there is a missing beneficiary every attempt to find them must be made and if they still can’t be found with professional assistance, it’s advisable to consider Missing Beneficiary Insurance. In addition, there are other types of insurance that may be applicable including Lost Share Certificate, Executors Liability Insurance and Missing Will Insurance.
Other fees
Other professionals that could add to probate costs include genealogists, asset research or will searching companies.
Funeral costs
Although not a direct probate cost often the administrator or executor is expected to cover funeral costs until the estate is finalised. Again, these can be paid directly from the estate if the money is accessible, if not, the executor or administrator needs to find the funds.
Contested Probate Costs
It’s worth mentioning the cost of contested or disputed probate. When a dispute arises it immediately poses the risks of creating delays and increased probate costs. There are a few companies that offer probate dispute loans or conditional fee arrangements (no win, no fee) but however it’s funded, a dispute will raise costs and these are costs that, more often than not, cannot be claimed from the estate. If a dispute does arise it’s worth getting some initial free advice from a contested probate solicitor.
Final thoughts
Probate can be a complex task and it’s not simply the financial costs that needs to be considered. It’s a long process with lots of administration so there is a time cost to also consider. If you are considering seeking professional help a good place to start is either with a probate quote or a free introductory call with a probate solicitor.
