Average cost of Probate Fees
Probate is the process of applying to the courts for a grant of probate or grant of representation. You will need probate to gain access to any assets held in deceased’s sole name for example property or banks accounts.
It is hard to give an average cost for probate as there are many different factors involved that can vary the costs.
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 different routes you can take to obtain probate and these come at different costs.
Solicitors can work on different fee structures, a percentage, an hourly rate or both. This means you won’t know the final cost 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 where as another may save more money working at an hourly rate.
On average the percentage a solicitor will charge on an estate is around 1-2%. There is nothing stopping a solicitor charging whatever percentage they want but most will be somewhere between 0.75% 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.
If you were to be working on a percentage rate, an estate consisting of 1 house and 1 bank account worth £300,000 could be charge at 2% meaning fees of £6000+VAT.
On average these work out to be around £250 an hour but they can be anywhere between £100 -£400 depending on experience and location. With a simple estate comprising of 1 house and 1 bank account worth £300,000, it would be reasonable to assume it would be 10 hours or less of work. Therefore 10 hours’ at the average rate of £250 would work to be £2500+VAT.
Whether you will be charged for 10 hours work is another matter .You will not know for sure how many hours work will be needed until the administration is complete and you have received the bill. It is hard to monitor how many hours work they are actually doing and the longer it takes the more expensive it will become. Some solicitors will also charge for meetings, phone calls and letters on top of the hourly rate. You can read more about solicitor’s guideline hourly rates on the government website.
Percentage and hourly rates combined
In our experience the most commonly used charging structure for solicitors and banks is a combination of the percentage and hourly fee. For example the fees for an estate comprising of 1 house and 1 bank account with a value of £300,000 would be worked out by the percentage in our previous example of 2% equaling £6000 plus the hourly rate worked out above as £2500 giving a total of £8500+VAT and any other disbursements you may need along the way.
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 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 at a percentage of the estate. On average banks charge between 4-5% but I have heard in some cases families being 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. I would recommend reading through the HMRC penalties procedures.
The best way to insure you get the best deal is to shop around and get a lot of quotes. 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.