In this article we look at fixed-fee probate. Is fixed-fee probate becoming more popular? What are the benefits of fixed-fee probate?
Let’s start with the basics:
What is probate?
‘Probate’ is the common name for ‘estate administration’, and is the legal process by which the affairs of a deceased individual are finalised.
The person or people appointed to do this are the ‘personal representatives’ (PRs). This is an umbrella term for either the executors (where the deceased left a Will) or the administrators (where there was no Will, or no valid appointment of executors).
Do I need a solicitor for probate?
Not always.
Obtaining the grant of probate is, in legal terms, an application for a court order. One of the key tenets of the rule of law is that the law should be accessible to all. For this reason, anyone can apply for a grant of probate, with or without professional assistance.
There is no requirement for PRs to obtain probate using legal assistance, and there are occasions where it is perfectly reasonable to do so without involving a professional. However, best practice is to engage the service of a specialist probate solicitor in all but the simplest of estates. This would certainly be prudent where, say, there is no Will, or there is tax to pay, or there is a trust or other complicating factors.
The government encourages lay executors to do this and provides a route to do so – see Apply for probate.
Probate specialists exist because things can get tricky (think trusts, charities, inheritance tax, foreign assets, missing Wills etc). It certainly does become prudent to use a solicitor if the estate is not straightforward. Even when an estate appears simple, it’s often the things we don’t know that catch us out.
Sometimes it makes sense to instruct a professional simply for the purposes of impartiality (perhaps where the beneficiaries are likely to question the neutrality of the executors).
And sometimes, it’s just about giving yourself space to grieve… probate can be time-consuming and burdensome, and taking those things off your plate could be right for you.
How do most firms charge for probate?
The law relating to solicitors’ costs, generally, is not very helpful.
The Solicitors’ (Non-Contentious Business) Remuneration Order 2009 states that a solicitor’s costs must be fair and reasonable having regard to all the circumstances of the case. It lists factors that can affect the costs involved including:
- the complexity of the matter;
- the skill, labour, specialised knowledge and responsibility involved;
- the time spent on the business;
- the number and importance of the documents prepared
- the amount or value of any money or property involved;
- whether any land involved is registered land; and
- the importance of the matter to the client.
It is not hard to see how these can tie-in with probate. But what does that mean in practice? After all, professional probate fees are notoriously variable, and often open-ended.
For a full estate administration service, professional fees typically start at a couple of thousand for a simple estate to tens of thousands for something complicated.
Quite often, the probate fees are value-based, using a percentage recommended by the Law Society. The Law Society’s practice advice booklet, Non-Contentious Costs (July 2012) suggests a fee based on a percentage of 0.5% for the deceased’s residence and of 1% for the remaining assets.
The Law Society also suggests a time-based element (or a combination of time and value). This allows the firm to charge for each unit of time (often six minutes) spent on the matter. The final costs will be calculated by reference to the hourly rate of the particular practitioner(s) working on the file.
This can mean that there is often a cost associated with each and every interaction with the person working on the matter. For example, an executor’s phone call with their solicitor will typically be recorded on the matter and result in additional charges being added.
This way of charging for probate work is an established and legitimate way of running a probate matter, and reflects the work done by the practitioner.
But is there another way?
Fixed-fee probate
Charging a fixed-fee for legal services is nothing new – conveyancing fees are typically fixed. It is certainly becoming more prevalent in other areas of law, such as litigation.
Fixed-fee probate has also been around for many years, particularly in relation to ‘grant only’ applications.
Many firms will offer a ‘grant only’ service – a low fixed fee (perhaps £500 – £1,000 plus VAT) for simply obtaining the grant. This is usually transactional, with the client supplying all the information.
Full estate administration fixed-fee probate services are becoming more common, but are still in the minority (especially in law firms). There are now some large providers on the scene, such as Co-op and Farewill who specialise in fixed-fee probate. Some of these larger firms operate nationally and so will not be the right choice for everyone.
Fixed-fee probate is now creeping into mainstream law firms. Many clients we speak to welcome the certainty that fixed-fee probate can offer.
Take a look at our fees page for more information on Requiem Law’s approach. We offer a fixed fee, full service – no hidden costs (and all matters are handled personally by Richard Whitaker TEP CTA).
Who pays for fixed-fee probate?
In most circumstances, the reasonable costs associated with administering the estate can be paid for using estate funds. In short, the assets of the deceased can be used to meet the costs.
At Requiem Law we will always try and pay our fixed-fee probate costs using client funds that we hold. For example, once the grant of probate is issued, we may receive bank account proceeds into our client account. Our fees will be paid from these funds, meaning that you never have to find the fees from your personal resources.
There are occasions when this arrangement would not be suitable (perhaps the only asset is a house). In these circumstances we will always discuss these with you first, to agree a suitable solution.
The cost of fixed-fee probate is an administration expense. These are usually payable out of the general estate, and not from any particular legacies. This means that it is usually the residuary beneficiaries (and not the recipients of fixed gifts) that ultimately bear the costs.
Is fixed-fee probate the future?
The value-based and time-based charging models for probate work have been around for many years and are appropriate for many.
However, consumers are often looking for other charging options, such as fixed-fee probate. This alternative, of fixed-fee probate, will not suit every provider or every consumer. There is a risk element for a law firm in providing a fixed-fee. After all, a matter could take considerably longer than expected, meaning that the fixed-fee probate practitioner is, in effect, being paid less.
However, at Requiem Law, we believe that this is the best charging model for the majority of clients that we encounter. We take this risk because we believe that this leads to a better overall experience for the client.
If you need help with probate in Winnersh, Wokingham, Finchampstead, Crowthorne, Reading, Henley or elsewhere in the Thames Valley please get in touch.
This article does not constitute legal advice and should not be relied upon as such. Please always seek legal advice that is specific to your individual circumstances.