Executor's expenses

[legaleaglenot]

I'm acting as the executor for my late grandad's will.

I've decided to do all the work on filling in the forms for probate, etc, on my own as Grandad's solicitor was going to charge a fortune. Solicitor is still available to advise me but I am just paying by the hour.

I thought I could put legal expenses, cost of valuations, cost of insuring the house until it's sold etc, against IHT. Solicitor says I can't claim for any of this, only for funeral expenses.

Does anyone have experience of this?

All those costs come out of the estate. You must have wires crossed with the solicitor. Either that or there's nothing in the estate.

Do you benefit anyway from the will, or are you doing this for other family members?

We have just done this and the cost of a probate solicitor who will also deal with the inheritance tax issue, comes out of the Estate. Funeral expenses too. I think its around £5K but not sure yet, but we don't pay it.

Unlike a professional executor, you can't claim for the hours you've spent on the 'case'.

If you have to take a day off work to do something, you can't claim any lost wages back.

You can use estate funds for all legal and funeral expenses, keep all receipts and when you tot up the final accounts, show that they are reasonable.

Any charges from the solicitor can be paid from the estate.

IME no costs can be used to offset IHT.

Are you the sole beneficiary? If not, and others are getting the benefit of you doing the admin rather than a solicitor, I would suggest an hourly rate that you feel is fair - or split the admin between the beneficiaries.

I appreciate sometimes it's easier for one person to be in charge.

I am the main beneficiary of the will. Grandad left a large estate. So there will be money to pay all these expenses, I just don't want to pay more in IHT than I need to. The other issue is that I haven't got access to Grandad's bank account etc, as this was frozen after his death. Funeral expenses were paid directly from the bank but otherwise I've been paying for all the expenses myself.

I'm very puzzled by the solicitor's advice but OTOH I can't see where I would fill in these expenses on the IHT forms.

I'm not expecting to be paid back for my time, but I did think I could claim back for the cost of valuing the house and contents, insuring the house until it's sold, estate agents fees etc.

I think I'm answering my own question. These costs can be claimed back from the estate, but as I'm inheriting the estate (minus the various individual bequests) I will be repaid them. Thank you for helping me understand this!

They're nothing to do with IHT.

IHT is paid on the value of the estate. The value of the estate is all assets, minus costs. The funeral plus the expenses you've mentioned and the solicitor fees are all costs.

You pay IHT on the net estate value once all the costs have been taken off.

Are you not confusing 2 things? I don’t think you can offset these things against inheritance tax but they can absolutely be paid out of the estate.

Might be easier to get his bank account converted to an executor account and pay all costs from
That as they arise btw.

@legaleaglenot

I'm not expecting to be paid back for my time, but I did think I could claim back for the cost of valuing the house and contents, insuring the house until it's sold, estate agents fees etc.

I did an IHT form recently

There's nowhere to fill these costs in because they come out of the estate.

Valuing the house shouldn't cost anything

Contents - if you have antiques or anything to sell that's different

But won't an auctioneer give a free valuation?

In terms of insurance etc, yes, I don't know what happens if you can't pay up front. Everyone told us "you can bill the estate" but that was not the reality.

Sorry you're going through this.

@titchy

Might be easier to get his bank account converted to an executor account and pay all costs from That as they arise btw.

Ooh...no one even told us this was an option! Interesting.

Hi, Firstly sorry for your loss. I've just done all the IHT and probate forms for my mum's estate (sols fees were crazy to just form fill, I'd still have had to gather all the info myself and chase for final bills etc) and your solicitor is right, you can't use those costs to reduce the IHT liability. Funeral expenses can be used, as can outstanding debt such as a car loan (although the asset of the car will also need to be recorded) and bills that are paid to cover the last bill issued up to the date of death will also reduce the liability.

Keep records of any bills/expenses you've paid personally as you will need to reimburse yourself from the estate for these before distributing the remaining monies/assets.

Check if you can use any unused allowances between spouses (sorry am assuming that your grandad was widowed here) - you can transfer some or all of the nil rate band and if there is a property passing to children then there is also a residence nil rate band.

The IHT helpline/online chat at HMRC were incredibly helpful with some queries I had as I had to do the full IHT 400 return along with all the supplementary forms. The online chat for Probate was also very helpful with a couple of queries.

The bank has told us that we can't get the bank account converted. It's a posh bank (!) so maybe their rules are different.

I've paid for a "red book valuation" via a surveyor on the advice of a solicitor because the house is the biggest asset. I also had to pay for a valuation from an auctioneer (Grandad had a collection of jewellery of Granny's and also some stamp collections which needed to be properly valued by a specialist).

@titchy I originally thought that all these costs would be deducted from the value of the estate, reducing the amount of IHT payable, but I now understand that they will not be deducted in this way. The solicitor says even legal fees won't be deducted. Seems odd to me. But I do now understand that they can be repaid from the estate.

@CarmelBeach thank you! As my username suggests, I am at sea with all this.

Thank you very much @chocorangeaddict77. I will contact those helplines. Solicitor is helping me with nil rate bands etc.

OP

I know the feeling of being at sea. Information reveals itself as you go along, which is annoying. Sorry to say but I am wary of solicitors on probate, especially if the estate is large.

I don't know what a red book valuation is. But we used an estate agent and the final IHT bill will be dependent on the total final value of the estate in reality, not via estimate.

I think you will have to pay the first instalment of IHT within six months, unless anything has changed. The bank should release money from his account for that but my rellies had a high street bank account.

Thanks for your understanding @CarmelBeach. I'm very anxious about getting it all right. Obviously I want to be honest and I'm also worried about falling foul of the rules inadvertently and being fined or something.

Solicitor has already made me wary by making a very basic error, sending a copy of an old will to the bank! I was relieved I spotted it but it did make me think.

Yes, I need to pay the first chunk of IHT quite soon. Before selling the house, the biggest asset! It's so strange.

@legaleaglenot

Thanks for your understanding *@CarmelBeach*. I'm very anxious about getting it all right. Obviously I want to be honest and I'm also worried about falling foul of the rules inadvertently and being fined or something.

Solicitor has already made me wary by making a very basic error, sending a copy of an old will to the bank! I was relieved I spotted it but it did make me think.

Yes, I need to pay the first chunk of IHT quite soon. Before selling the house, the biggest asset! It's so strange.

We were worried about this too, accidentally making an error. And I agree that paying IHT before property is sold is really unfair. Some people have to take loans.

In terms of the errors, an accountant friend told me "HMRC aren't on a mission to get you". We had a mess of paperwork to deal with and found out about a couple of accounts just before probate was granted. It wasn't an issue, they could see that we'd only just found out - because of the date on correspondence arriving which alerted us to it. They simply adjusted and there was no delay.

It was the lack of control that was so unnerving and I hate our property sales system. At one point I wanted to do "we buy any property" but my partner was against it.

You could keep this thread for ranting/support. I hope it all goes smoothly. Looking back, it did. It's just weird and of course, the worst timing to be on top of your game with admin

Sorry for your loss I've done Probate for my parent's estate. Any expenses to do with wrapping up the estate can be claimed back. Obviously if you're the only beneficiary it won't make much difference, but still keep receipts and a spreadsheet with your expenses; e.g. cost of Probate, building insurance, estate agent and solicitor fees, storage costs, anything to do with wrapping up the estate. (Your solicitor sounds dodgy btw).
Buy a folder to put everything in!

Once you get Probate, you can close your grandad's bank account and transfer it to another one. Open a new account just for this so it doesn't get confused with your own money and bills etc.

How big is the Estate? If your grandad was widowed, his IHT doubles to £650,000, then there is another allowance for giving a property to a family member, taking the IHT to nearly one million.

Oh and I sound HMRC very helpful with queries.

Agree, not sound!

I mean found! Doh! 😂

I'm doing probate myself for both my parents currently. I wonder if we could have a support thread?

@helpmemakeit

I'm doing probate myself for both my parents currently. I wonder if we could have a support thread?

I think that sounds a good plan. Most of us will have to do it at some point, alas.