When someone dies, a grant of representation is the document the person dealing with the estate (usually the executor or next of kin) needs to obtain in order to confirm their legal status and ability to deal with the estate. If the person who has died left a will appointing executors, then the executors will apply for a grant of probate. If there is no will, the next of kin apply for a grant of letters of administration. The more general term for these documents is a grant of representation.
In 2017 259,956 grants of representation were issued (this includes grants of probate, letters of administration and letters of administration with the will annexed). This figure hasn’t changed much over the years. In 2007 a total number of 286,175 grants were issued. Applications can be made with the help of a specialist solicitor, or directly to the Probate Registry. Some banks offer probate and estate administration services, but they are usually more expensive than using a solicitor.
So, what are the benefits of using a specialist solicitor to assist you?
Dealing with bereavement can be challenging. As an executor you may find yourself with the onerous and stressful task of having to sort out the estate of a family member or friend while you are grieving. This can involve arranging the funeral, going through personal papers to notify banks, building societies, utility providers etc, and dealing with other family members and beneficiaries. All of this before you even start to navigate the forms required to apply for a grant of probate (or grant of representation). The forms required include the probate court application form and inheritance tax forms.
The amount of Inheritance Tax (IHT) paid hit a record amount of £5.2 billion in 2018 (according to statistics published by HM Revenue and Customs). The total number of estates liable for inheritance tax has risen every year since 2009/10. The duty to pay IHT can be a complicated process of valuing the assets, applying available exemptions, filling in a lengthy return, assessing what tax is due and then arranging payment of the tax. An error could result in the executors being personally liable for penalties which could be as much as 100% of the tax due. It is therefore essential that an accurate IHT return is submitted in time and the correct amount of tax paid.
The new residence nil-rate band is forecast to reduce IHT receipts for the Treasury by around £1.5bn in 2020/21 (Office for Budget Responsibility). This, when coupled with the nil-rate band (£325,000 per person) will enable couples to potentially pass on £1m without incurring inheritance tax liabilities. By instructing a solicitor they can work with you to ensure that all potential reliefs and allowances are claimed to maximise the assets passed on to the beneficiaries, possibly with the benefit of ‘after the event’ planning such as a deed of variation.
A solicitor will be able to handle issues that may turn out to be more problematic than first thought: if for example a dispute arises, the deceased died without a will, the estate involves property or assets outside of the UK, the estate is bankrupt etc.
If you are dealing with the estate of the first of a couple to die, a solicitor can provide valuable advice moving forward such as advising a surviving spouse or civil partner about lifetime gifting, the benefits of a Lasting Power of Attorney and perhaps reviewing their own will.
Solicitors are regulated by the Solicitors Regulation Authority and are required to maintain professional indemnity insurance cover, giving you comfort should things go wrong. When choosing a solicitor, it is worth looking out for those who are members of specialist organisations such as Solicitors for the Elderly and the Society of Trust and Estate Practitioners (STEP).
In conclusion, when instructing a solicitor to assist you, you will benefit from professionalism, expertise and impartiality. A solicitor can take the pressure away from you, and it’s worth remembering that the legal fees are payable from the estate.
Gina Dixon (TEP) is a Director and Solicitor at Dixon Alderton Law. To find out more about how we can help you contact Gina on 01926 563080 or at [email protected] , or submit an online enquiry form.