What are the potential pitfalls of do-it-yourself probate? Laith Khalib, of Howells Solicitors, explains what you need to know.
When it comes to dealing with the affairs of a deceased relative or friend, people are increasingly choosing to do it themselves, rather than use a solicitor. Though the obvious benefit of a DIY approach is the avoidance of professional fees, there are a number of risks that you should be aware of, should you choose this route.
Here’s what you need to consider before deciding to administer an estate without professional help.
The risks of DIY probate
If you have any doubts about the solvency of an estate, you should tread carefully. If the estate is not handled properly, the person who administers the estate (usually called the executor) may be personally liable for unpaid debts to HM Revenue and Customs (HMRC) and/or other creditors.
However, if the process is carried out correctly, the executor will not be personally liable for debts that the estate can’t afford to pay.
Bear in mind that if you, as the executor, cause a loss to the estate, you could be held personally liable to any beneficiary that suffers as a result. This may arise if, for example, a house is sold too cheaply, or if assets are lost or mismanaged.
Research the executor’s role
To do the job of probate properly, you’ll need to spend some time researching the duties and responsibilities attached to the role of executor.
But be aware that some online content may be unreliable or out of date, so only refer to trusted sources.
The specific issues and requirements for different estates will vary significantly. That said, here are some tips that can be applied in most cases. As executor, you should:
- thoroughly assess the deceased’s financial affairs, to identify the extent of the assets and liabilities, and to consider if any tax reporting needs to be done
- ensure that all debts are paid before distributing the estate. If you don't, you could be forced to pay a missed debt personally. You can protect yourself from unknown creditors by placing a notice in The Gazette and a local newspaper, in accordance with Section 27 of the Trustee Act 1925. If you do that, and a surprise debt comes to light after the notice expires, you will not be liable to pay it yourself and the creditor would have to pursue the beneficiaries for repayment
- not distribute the estate if you are on notice that someone may either challenge the validity of the will, question your interpretation of the wording of the will, or pursue a claim against the estate under the Inheritance (Provision for Family and Dependants) Act 1975
- carry out bankruptcy searches against beneficiaries – if a beneficiary is bankrupt, the executor should liaise with the trustee in bankruptcy over payment of the legacy
- consider appointing a genealogist to produce a family tree if there is no will, unless the family circumstances are obvious and known to you, to ensure that all entitled heirs are identified
- on the finalisation of the estate, produce an estate account to set out details of all the assets and liabilities of the deceased at the date of death, details of capital and income payments received by the estate, transactions undertaken by the executor on behalf of the estate, payment of funeral costs, tax, debts and expenses
This record will enable each beneficiary who is left a share of the estate to see how their entitlement has been calculated. Beneficiaries who are left a set sum, or specific items, are not entitled to see the account, unless their gift can’t be satisfied in full.
Probate is a complex area of law, and this whistle-stop tour doesn’t constitute watertight advice. Pleading ignorance will not amount to a solid defence for an executor who gets something wrong and is pursued by a beneficiary or creditor. So it’s important that you assess whether or not DIY probate is right for you.
If you have doubts about any issue in the estate, seek specialist legal advice. Professional fees will be paid by the estate, and in the event of a solicitor making a mistake, you will have the protection afforded by the solicitor’s indemnity insurance.
About the author
Laith Khatib is a solicitor at Howells Solicitors, Cardiff, specialising in wills, trusts and estates, with a particular emphasis on litigation in those areas. He also deals with negligence claims against other professionals in relation to will/trust preparation. You can follow Howells on Twitter @howellslegal.