What is the cost of probate?
Probate is the process of applying to the courts for a grant of probate or letters of administration. You will need a grant of probate to gain access to any assets held in the deceased’s sole name, for example, property or banks accounts. The cost of administering an estate can vary greatly because there are a lot of different factors to take into account so it is hard to give an average for the cost of probate.
You have to be aware that every Estate is different and will require a different amount of time and work to administer.
With that in mind, you don’t have to resign yourself to paying thousands of pounds in every circumstance. There are a couple of different routes you can take to obtain probate and these come at different costs.
Solicitors costs for probate can vary dramatically. This is because solicitors can work on different fee structures. A percentage, an hourly rate or both. This means you won’t know the final cost of probate until the end of the process. Solicitor’s fees are usually based on the guidelines provided by The Law society. Every estate is different and one type of estate could benefit from working on a percentage fee whereas another may save more money working at an hourly rate.
On average the percentage a solicitor will charge for executing a Will is around 1-2%. There is nothing stopping a solicitor from charging whatever percentage they want but most will be somewhere between 0.50% and 5%. Some will charge a higher percentage on liquid assets than on a property. You will also need to take into account additional expenses such as court fees, VAT and any other disbursements. The cost of the grant of probate is £155. It is important to note that percentage rates do not take the complexity of the estate into account only the value.
On average these work out to be around £250 an hour but they can be anywhere between £100 -£400 depending on experience and location. It is important to know that hourly rates are not charged solely on the hours spent doing actual paperwork. When calculating how many hours of work they have done solicitors will include a combination of tasks, just some include meetings, phone calls and letters. For example, if you were to speak to your solicitor four times, around 10-15 minutes, your solicitor will add an hour to your overall bill. Without realising these hours can often add up and end up costing you a lot more than you expect so it is important to be aware of your contact time.
When using an hourly rate it is hard to monitor exactly how many hours of work are actually being done and the longer it takes the more expensive it will become. You will not know for sure how many hours of work the solicitor has done until the administration is complete and you have received the bill.
You can read more about solicitor’s guideline hourly rates on the government website.
Percentage and hourly rates combined
As with hourly rates, using this fee structure makes it difficult to work out the cost of probate prior to the administration because the amount of hours work is not known until the end of the process. With the percentage rate included it also means that the higher the value of the estate, regardless of the work involved, the more you will pay.
Each solicitor will use a different method of combining the percentage and hourly rate. A lower hourly rate may mean a higher percentage and a higher hourly rate may mean a lower percentage. However, others may just combine their standard hourly rate and percentage rate together. A percentage and hourly rate combination often does not work out to be the most cost-effective method of administering an estate.
Probate brokers will use a panel of solicitors this means they have the resources to make a reasonable estimate at how much work is involved in administering an estate and will charge according to a fixed rate fee. Some use the estimated amount of hours work; others will work on the volume of assets making it hard to work out an average. Having a fixed rate fee means you will know the cost of the probate work at the beginning of the process and once a price is agreed upon it will not change unless the work involved changes.
In most cases, fixed-rate fees work out as the best value for money and provide the comfort of knowing you won’t be hit with a huge bill at the end of the process.
Banks come out as the most expensive option. Banks will usually pass the work onto an independent probate provider that will charge a percentage of the estate. On average banks charge between 4-5% but there have been, in some rare cases, families charged as much as 10%. Therefore, on an estate consisting of 1 house and 1 bank account worth in total £300,000 charged at 4% would mean fees of £12,000.
Estate administration specialists
Estate administration specialists offer the same services as a solicitor but in most cases are not solicitors themselves and therefore cannot be regulated like a solicitor would be. For this reason, it is hard to work out an average rate as they don’t have to follow any guidelines and can charge any amount they decide.
It’s hard to work out the average cost of what someone spends when they DIY an estate as it’s hard to monitor. A lot of people would assume that doing probate yourself would be the cheapest option, unfortunately, this isn’t always the case. It could work out to be the cheapest option on an estate consisting of 1 asset. In those cases, it could be worth taking the time to apply for probate yourself.
However, if you are looking at a slightly more complicated estate you could quite easily run into problems. Without a good understanding of probate, it’s easy to miss things that a professional wouldn’t, for example, potential tax exemptions. It is also easier to make a mistake which in some cases can be costly. You can be issued with penalties if there are errors or discrepancies in the applications that result in the probate office taking extra time to resolve or loss of tax to HMRC. We would recommend reading through the HMRC penalties procedures.
The best way to ensure you get the best deal is to shop around and get a lot of quotes and compare probate fees. Make sure you understand the differences in how the charges are worked out. From there you can make a reasonable decision on the most competitive price. Read our Top Ten Tips to reduce probate fees.
If you are the executor of an estate that requires probate speak to a member of our team on 08007318722 for a fixed rate quote or complete the form below to receive a callback.