The Perils of DIY LawOctober 10, 2013
The death of a loved one is an extremely distressing time for anyone, however it can be more distressing for related executors trying to deal with the administration of a deceased’s estate themselves.
There are many reasons people seek to administer their loved one’s estates themselves. One of the most prevalent reasons is the rise of the internet as a convenient resource. The Northern Ireland Courts Service website provides various links and information to help relatives who seek to personally apply for a grant of probate or letters of administration such as a link to an overview of the probate process by HMRC. In addition various links to Inheritance tax forms and Probate forms are provided along with an HMRC helpline number and the telephone numbers and email address of the Probate Offices in Northern Ireland. Such information makes people believe they do not need professional help.
It is sometimes believed that if the estate is administered personally it will be cheaper. This can prove to be a somewhat misguided notion, especially if problems appear between beneficiaries or the executor makes a mistake.
Often at first glance the administration of an estate can seem fairly straightforward. This is especially so if it isn’t a large estate, and there are no ex-spouses or children from previous relationships.
However, while administering the estate may seem like a straightforward process, it can actually turn out to be complex and time consuming. The most common reason for this is the deceased not having kept their affairs in order. It is not uncommon for loved ones to be left with bags of papers which are in no discernable order. It takes a lot of time to go through these papers, and sometimes an expert eye can streamline the process, knowing instinctively what is important and what is not. As a result, it is possible for assets to be missed.
It is harder to ensure all assets are accounted for now, especially with the rise of online accounts. Gambling, shopping or PayPal accounts can hold a lot of money online but may be inaccessible to relatives without the necessary username and passwords. While solicitors can contact these companies and be provided with required information relatively quickly, or have money released, it is often very difficult for personal representatives to obtain this information due to security. This can lead to time consuming communications with the companies in question. Further, when inheritance tax is due on an estate it is more difficult to administer. Many laypersons do not understand the inheritance tax process as it is not something they have to deal with regularly. This is something a solicitor can deal with quickly and easily.
Issues with the administration of an estate are further complicated by the Inheritance (Provision for Family and Dependants) (NI) Order 1979. This Order provides that certain classes of people can make applications on a deceased’s estate even where they have not been provided for in the will. Any applications of this nature would be difficult for a layperson to handle from a legal viewpoint, but also on a personal basis, especially if it causes disagreement between those making the application and beneficiaries of the will. It is helpful to have a solicitor as an independent advisor in such cases.
Many executors do not know that they can be held personally liable for mistakes made in the administration of an estate. Mistakes can be as simple as missing an asset or returning an incompleteIHT form to HMRC. However, these mistakes could be costly if a disgruntled beneficiary decides to take issue with the executor. Therefore, what may have begun as a cost saving exercise could quickly unravel should any contentious probate proceedings be brought.
All in all, with the increase in more complicated family arrangements such as second spouses and children from previous relationships, along with the rise in online accounts and the disorganisation of peoples affairs it can be a long, complicated and possibly expensive exercise for people trying to administer their family’s estates. It seems that the disadvantages most definitely outweigh the advantages.