Solicitors fees for administration of estate

[Maggiethecat]

Sadly lost a close family member suddenly last week.
I’m one of her executors and have had solicitor’s letter with fee quote for administration of her estate.
My relative simplified her will and has gifted her house to her kids and there will be monies held in bank accounts gifted in equal shares to them. That’s it, no complexities.
Estimated gross value of estate is about £1.5 million.
The quote is for 1.5% of gross value plus VAT, which based on the estimate would total about £27k.
Never had to deal with this before and have had a quick look online but just wanted to get a sense check here of what kind of fees people have paid.

Sorry I've completely misread 'shares' in the original post!

That’s a lot because I handled an almost identical estate myself last year and whilst it takes a bit of time not £27k worth. Most of the work will be done by a paralegal anyway and you will still have to provide all the information. Delays in getting Probate have reduced and the staff are extremely helpful if you call them. IHT calculation is straightforward and because you are giving them money I found HMRC mostly helpful.
i assume you are selling the house which will mean agreeing the price with relatives. This is the most likely area of conflict along with who gets what of the personal effects. This will still be the case whoever does the admin.

Thanks everyone. I realise that executors will have to do a fair amount of leg work - gathering various documents, receipts etc. and it is tempting to do it ourselves.
However, use of a solicitor will probably save a lot of headache and tension in the family.
Off to get some quotes!

I found it pretty shocking myself that they were able to charge for the work plus a percentage of the estate

They don't all do this, @Pineapplesunshine

The solicitors my late parents had always used did, and believe it or not tried to justify a "risk fee" on top for administering a simple estate, so I simply went to a firm which charged a simple hourly rate instead and what would have been a £10k+ bill came out as £3,200

Probably best to do as much as possible yourself and just consult the solicitor at the final stages when you've done all the donkey work, to deal with any queries etc.

An awful lot of it is sifting through piles of paperwork for the solicitor to satisfy themselves that everything is known. You can save them tens of hours of time if you do that yourself, organise it all, schedule all assets/liabilities etc.

Likewise with probate application forms and IHT forms - all available online along with lots of guidance notes etc. Again, why not try drafting the forms yourself and just ask the solicitor specific queries?

If your wills are done and stored with a solicitor, and you need a solicitor to sort it all out do you have to have the same one ?

Surely it’s the relatives who have to get all the paperwork together to give to the solicitor anyway, or do you give them the details of which banks and financial institutions the savings, bonds, isas, etc are with and leave them to get statements etc?

That’s shocking - and extortionate!

You can give them the names of institutions and they will search them all. We gave as much as possible but you have to have values on date of death
We are finding problems with financial institutions that have merged old accounts

Not at all, Allseeingallknowing; the executors can use any solicitor they wish

Unless you already have a copy yourself, simply ask those who wrote it to hand it over and take it wherever you wish

No. We changed solicitors after fil died. Our new solicitor approached the old one to get the will. It is such a complex estate we weren't convinced the old solicitors could deal with it

So the solicitor will find the value on date of death, or did you have to find that out too, in which case you might as well do it yourself. If you do you have to open a special bank account into which all the monies are paid, then you have to distribute it . If it’s a mirror will with everything left to the surviving spouse, do you need probate or is it all transferred.

When my DM died, her solicitor wanted an hourly rate plus a % of the value of the estate, which would have added up to £8-10k for a simple estate.

My sister and I both got quotes from our own solicitors, which both came in at around £3k for time only with no % of the estate.

We did the legwork of gathering all the info (savings accounts, house valuation etc) and the solicitor did all the paperwork with HMRC, getting probate, distributing the estate - for the quoted £3k.

Did they charge you for that and storing the will for years?

I did my mother's estate - which was more complicated because she had bank account savings in the UK but was a resident in an EU country but a British citizen. Plus her original will was missing and we could only find a copy. We had to go to probate because her savings were over the limit, and jump through various hoops because her will was not the original, and a few more hoops because she lived in an EU country. We did it all ourselves and it cost us nothing. It is very easy to complete forms online and there are people to help if you are not sure about something.

Thanks, have a feeling the solicitor will find who did our wills would charge a lot, as did for writing the wills. Although I would be able to get details of savings together, I wouldn’t know what the hell I was doing if I had to deal with HMRC etc. I would have to have some help , and hope the solicitor would recognise my part in getting the documents together. There ought to be legal guides who would help you , it would be much cheaper.

Do you mean the original solicitors? I don't think so. Our current solicitor never mentioned a charge and I think she would have done had their been one.

You don't have to deal with the land registry at all. You can use a conveyancer to transfer the property into the children's names which will be several hundred quid. Alternatively you can sell the property and split the proceeds.

There aren't any shares but that's similar, just contact the stockbroker they are held with and instruct them to sell them all and then give the children the money.

Nothing here is difficult but will be time consuming.

No we didn't have to find out anything. Just gave details to our solicitor and she did it all. The monies from the accounts go into the client account at the lawyers and earn interest you don't need your own account. One bank in Scotland has been very slow but now 3 months after we instructed our solicitor a lot of the money has come through so my husband has been reimbursed for some of his expenses and the lawyer has paid the funeral director and the energy companies.
My husband is running the broadband so we can keep cameras in the properties for security until we can sell them. He is claiming this back from the estate. The estate is my FIL and his wife died 2.5 years ago so everything went to him. The estate is way above IHT levels so we need confirmation (= probate...we are Scotland) before we can distribute anything or put the properties on the market. We have realised the investments so we have money for the IHT bill. If you have a mirror will I think you still have to wait for probate if it's above a certain amount until you can transfer it.

I would have to have some help , and hope the solicitor would recognise my part in getting the documents together

So would I, @Allseeingallknowing, but they're businesses after all and the best way to ensure that is to have one who charges by the hour

Hmm, I am a solicitor and unless the estate was my own parent and I knew a lot about them/ their finances/ was close to the beneficiaries I don't think I would attempt it myself.

reason - as executor you would be liable for any mistakes.

Do you know the rules about gifting a house and remaining in it? Will there be IHT to pay? Are you transferring a nil rate band?

At the very least I would want an accountant to check and submit the IHT return, do the final income tax return and prepare the estate accounts.

Getting the grant is the easy bit.

A solicitor will deal with it from scratch (or at least the ones I know that work in this area would) and would check for any debts, overpaid benefits etc.

And if you use a solicitor, yes you may have to do some of the work but not all of it - they will check with all the banks etc anyway (well, a decent one would). If there are any shares they can deal with the sale/ transfer. They do take the hassle off executors and will give you peace of mind.

That's up to the executors to decide how much work they want to do. But it's not just finding the paperwork, it's organising it, sorting out the old stuff that's irrelevant, putting it into date order, segregating it all into different accounts, identifying what's missing and asking for duplicates/copies, etc. It's often quite a lot of detective/forensic work to get a proper picture of what's what and check nothing is missing!

A huge amount of time can be spent just taking papers out of envelopes, unfolding papers, etc. People have a nasty habit of opening an envelope, having a quick look, and putting it back in the envelope, meaning some other poor sod has to open it all again and sort it out! You really don't want to be paying the solicitors to do that as it's something anyone can do.

Fortunately I was able to sit down with my DM and put together a spreadsheet that covered everything whilst she was still able to do so. There were still a couple of surprises along the way.

I've made sure that my DC know where everything is.

The complexity is gifting it to her kids, unless you can show she paid a market value rent to them (and presumably have declared the income?) HMRC will look v closely.....