Applying for Probate can be a complicated process, particularly if you have never had to do it before. If you choose not to seek expert advice, there are some common errors that are often made. Unfortunately, Executors without prior experience can at times underestimate the amount of time and work that is involved in dealing with Probate but these errors can cause delays, increase expense and bring a lot of work and stress for the Executor. So, what are these errors and what can be done?
The first common error is failing to properly interpret the Will.
A Will is a binding legal document and expresses the wishes of the deceased together with instructions on how to handle the estate.
Unfortunately, the Will may not be written clearly and can contain ‘legal jargon’ which is then open to interpretation. This is often where the mistakes are made resulting in disputes amongst Executors and beneficiaries as failing to provide each beneficiary with his or her entitlement could lead to a claim being brought by the affected, and disappointed, beneficiary.
The issue can also be worsened if there are amendments to the Will, there are Codicils (a legal document drafted to make changes to the Will), or even a beneficiary dies. All situations can make confirming the wishes of the deceased seem impossible, if you lack the knowledge and understanding of Wills.
If you are unsure of the contents of the Will then clarification from a professional is required as this could save you on costs, and time, if something needs to be rectified later.
The second common error is failing to assess all the estate liabilities and debts correctly.
Whilst it may not be clear as to every liability the deceased has, it is important that every effort is made to obtain the information and then settle the debts.
If the Executor failed to take the correct measures in identifying potential creditors and one came forward, once the assets had been distributed, the creditor may pursue the beneficiaries for the outstanding amount. A beneficiary may be able to take legal action against the Executor who failed to correctly ascertain creditors and outstanding liabilities that result in them having to return their inheritance. It is also possible for the creditor to take legal action against the Executor who failed to pay what is owed.
If you are unsure of what liabilities the deceased had then seeking professional support is required as the necessary steps would be taken to ensure all potential creditors can come forward therefore saving costs, time and possible disputes.
The third most common error is distributing money to the beneficiaries too early
Whilst an Executor is responsible for administering an estate, he should never forget that he is acting on behalf of all beneficiaries mentioned in the Will.
An Executor at times can come under pressure from the beneficiaries to distribute available funds from the estate before all the assets have been collected; as beneficiaries at times do not understand there can be delays or that the process just takes time and the Executors feel the need to keep beneficiaries happy.
Distributing assets early can cause significant problems as it can be very easy to lose track of who has received what and how this will affect the remaining amounts. It can also cause complications if future costs were to arise or any unexpected creditors came forward, leaving the executor having to pay out of their own pocket.
It is a legal requirement of an Executor to keep track and produce evidence of all incomings and outgoings and giving assets to beneficiaries in small and frequent amounts can lead to confusion.
Most Executors feel pressurised by beneficiaries and seeking professional help takes this pressure away as a professional is independent and will not be concerned when turning down a beneficiary’s request to have their inheritance early.
The fourth common error is acting as an Executor without legal assistance
If you are acting as the Executor, you can be held legally and financially liable for any errors that you make, even if these are genuine mistakes. An Executor is personally responsible for administering the Estate in line with the law and in line with the deceased’s wishes if there is a Will.
Some Executors make the mistake of mixing estate monies with their own monies, fail to keep proper documentation, fail to collect in all monies due to an estate and even sell estate property without first obtaining professional valuations.
Acting as an Executor is a demanding and time-consuming role and it is a role of trust and responsibility to the beneficiaries. At times the Executor does not live up to expectation as they opt to do things alone to save money or feel they do not need help and support. Inexperience and the lack of knowledge in this area can end up costing the estate, and with laws changing and Wills not being as straightforward as they used to be Executors are unsure how to deal with the estates and are making mistakes more frequently.
Most Executors use a professional as they can advise you in all areas of the Probate process. If you do not feel you are able to deal with an estate then you must seek help and support.
Lastly and the most common error is incorrectly filling in the Probate and Inheritance Tax forms
Unfortunately, this is the most common mistake Executors make when applying for probate even though there is a lot of guidance and information available as to what needs to be done. However, this is the most difficult part of the process, especially if the estate is complex as there can be a considerable amount of forms to complete which are not always easy to understand.
When filing the Probate forms it is important to provide the correct probate valuations for the assets in the deceased’s estate and be able to justify how you came to that value. Not providing details of assets that HMRC have asked for can result in serious repercussions. When providing these details, it is better to be overly cautious when providing information and values of the deceased’s assets than to it is to risk a uniformed estimation.
Another mistake we see often when completing the application forms is Executors not applying for all the tax exemptions that the estate is eligible for. Without prior knowledge of Probate, it is easy to miss out on potential tax exemptions the estate may be entitled to. Correctly applying for exemptions can save the estate thousands of pounds in inheritance tax.
Executors can at times underestimate the complexity of the estate, and these forms, and find that their time runs out to deal with them resulting in interest being incurred. Time restraints also cause Executors to rush the through the forms and applications which can lead to further mistakes and further penalties. Also, the Executors often do not know that in some cases if inheritance tax is due, that some or all the tax must be paid within 6 months of the person passing away therefore incurring even more charges as interest will be applied to the tax due.
How Penguin Legal Services can help you
It is these misunderstandings and lack of knowledge and experience that lead to incorrect information being provided, delays, complications and disputes and dealing with an estate which is large enough to be liable to inheritance tax without professional advice is generally a mistake.
Dealing with Probate has many pitfalls which is why people seek a professional. If you are an Executor and need to support in obtaining the Grant of Probate then please call us for some friendly advice and support.