DIY Probate – The Pitfalls

With the huge increase in internet use, more & more people are being tempted to deal with probate & estate admin themselves. What are the pitfalls?

Probate, the process of dealing with someone’s estate (property, possessions, cash, savings) when they pass away, can be applied for without seeing a lawyer, but it’s not without risks. Official statistics indicate that the number of claims against executors for breach of fiduciary duty (in other words “getting it wrong”) has more than tripled in the past year. There is speculation that this increase is linked to the rise in DIY probate.

Many professionally drafted Wills contain trusts to save inheritance tax, to avoid those who inherit paying care fees and to reduce the likelihood of potential disputes. We have noticed an increase in ‘DIYers’ returning to us to seek advice when they have made a mistake or find the paperwork too tricky.

In one case, Mrs A’s Will included a trust giving her surviving spouse, Mr A the right to the income only on her estate but not the capital, known as a life interest trust. The Will then specified that on Mr A’s death, the estate should pass to Mrs A’s children from a previous marriage. However, when Mr A dealt with the estate, as he did not understand the trust, he paid the whole estate, income and capital to himself and did not set up the life interest trust. We were able to sort out the matter to ensure that, in accordance with the Will, Mr A only received the income from Mrs A’s estate and the children would receive their capital entitlement on Mr A’s death.

In another case, Mrs G sold some shares during the administration of her late brother’s estate which resulted in her having to pay capital gains tax. If she had taken professional advice, the shares could have been transferred to her before sale to avoid paying tax.

As elderly client specialists, we are also able to add value, for example by identifying cases where money is owed to the estate for care funding which should have been met by the NHS and we can assist in making a claim on behalf of the family.

We recognise that families often have their problems and conflicts of interest arise either at the outset or as the administration proceeds. As an independent party, we are able to manage any such conflicts and in most cases resolve the issues by providing clear details of the law and process involved.

In all but the most straightforward cases, it is important to seek timely specialist advice to save money and worry. Executors carry a certain amount of personal liability in their role and they can open themselves up to substantial legal claims if they are unaware of the law and their obligations.