When it comes to protecting your assets, you want a knowledgeable solicitor to administer your estate. Many people tend to handle estates themselves, especially if a family member dies. It’s understandable to consider doing it yourself, but as many quickly realize, this can be a much taller order than expected.
There are countless resources available online to help aid you through the process. If your estate is simple your loved ones will be able to administer it.
But, if you’re not a professional, you may miss things that could cause major problems down the road. As an experienced solicitor, I understand the pitfalls that can occur. I want to guide you through a few of the major risks of DIY probate.
Risk #1: Checking the Will and Assets
It would help if you made sure that the Will in your possession is the deceased’s last Will. This issue may seem simple, but another Will may exist that would void the previous one. Having another Will come up after you have dealt with the estate could be catastrophic.
In addition to the Will, a thorough evaluation of all the assets needs completion. You could miss old bank accounts, premium bonds, the holding of shares, gifts, and many other things easily.
Hiring a professional to survey the details helps decrease the risk of missing something. If you miss something when you do it yourself, you could be personally liable for it and may have to pay out of pocket later on.
Risk #2: Interpretation
Reading a Will is one thing, but interpreting it is another. Sometimes they are handmade and not easy to understand. Sometimes the wishes are unable to be fulfilled, which could cause even further complications. This problem could come from a missing beneficiary or an asset that no longer exists.
There are rules laid out in legislation about what should happen in these instances. When you hire a professional, you help eliminate the risk of mistakes.
Risk #3: Personal Liability
As the executor of the estate, you could be liable for unpaid debts. This liability means you will have to pay out of your pocket if you don’t receive the due inheritance. This problem could happen for several reasons, including not obtaining the real market value for a property.
You could also have an unknown beneficiary come forward after the estate is distributed, or there could be an outstanding tax bill. Ignorance is not something you can plead if this happens, so the risk is very high.
All estate debts need payment before any beneficiaries receive compensation. The single way to avoid liability is to make sure the estate is dealt with appropriately. You need a specialist solicitor with the training and experience to get the job done to do this.
Risk #4: Calculating Taxes
Most estates have tax issues. More estates these days are now liable for inheritance tax (IHT). When an estate exceeds value at £325,000, IHT can charge up to 40 percent of the value exceeding the amount.
Since many properties are worth that amount and more, it makes sense that many come with the IHT band.
Many tax reliefs and exemptions are available. Some of these include charitable legacies, business assets, and your primary residence. The rules aren’t simple, and inaccurate calculations could mean that you pay the wrong amount. You could end up having to pay beneficiaries out of your pocket, and you will be responsible for all of it.
IHT needs early payment. With this responsibility, it could cause financial issues. You may not have the money available just yet. As executor, you will be responsible for paying it. It may be tempting to pass the responsibility onto a beneficiary, but it is not worth the risk.
Even if you trust the beneficiary, there are cases where the beneficiary has backed out or even ran off with the money. This situation will still leave the executor responsible.
Other details should be considered, such as lifetime gifts that could create more IHT. Income tax could also be payable on trusts and rental properties.
Risk #5: Risking Unexpected Claims
The rise in extended families means a higher risk for unexpected claims by unknown beneficiaries. You could deal with the estate yourself, pay all the heirs, and someone could suddenly come forth with a formal claim that they are entitled to a share of the estate. This issue could blow all of your plans out of the water.
The only way you could avoid personal responsibility for this is if you have publicly notified creditors of the death through the correct newspaper sources. This practice isn’t a strict legal requirement, but it helps protect you if a claim arises.
We’re Here to Help
Elizabeth Middleton Solicitors is here to help you through your probate challenges. Don’t risk unnecessary complications, contact us today to get started, and make sure you and your family are in good hands.