Inheritance tax (IHT) and other costs frequently arise when it comes to bereavement, and for the person who is in charge of an estate, these are vital to understand. In order to deal with someone’s estate, Britons will need to apply for a grant of probate – a legal document confirming the executor of a will has the authority to deal with assets. However, what is worth noting is that there are important costs to consider, particularly as the time to deal with probate can sometimes be lengthy due to COVID-19.
Mr Cousins provided insight into the myriad of costs which may be involved, and the potentially time-consuming nature of the process.
He said: “There are many costs associated with managing the administration of a bereavement. Some of these are known up front, for example the application to the courts for the grant for probate – £215 for estates over £5,000 after debts have been paid, or copies of a death certificate, worth £11 each time.
“But some costs only become clear once the process starts, for example, the cost of searching for financial assets via an asset search firm, which can be £200 to £300.
“Furthermore, should any tax calculations be needed, for example income or Inheritance Tax, an accountant may be needed.
“Costs can quickly mount once the process begins and the detail of the estate becomes clearer.”
However, Mr Cousins also identified that the matter is not always a financial one, and can be particularly emotionally taxing in many circumstances.
He added: “To complete all the activities needed: gathering information, filling in probate and tax forms, writing to banks, closing accounts and distributing funds to beneficiaries, can be extremely time consuming.
“Be prepared to spend 50 to 80 hours or more dealing with these matters over many months. But the overall time to complete all steps can stretch from anything from nine months to several years.”
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Costs, however, are likely to snowball for those who are employing professionals to deal with their circumstances.
Due to the impacts of COVID-19, waiting times for probate have lengthened, meaning issues which existed before the pandemic have only been further exacerbated.
Receiving responses from financial institutions, Mr Cousins said, is taking longer than before.
A recent probate report carried out by Exizent showed 56 percent of law firms stated “waiting for institutions to get back to them” caused the biggest hold ups, with most having to wait at least eight weeks.
While these delays were true before the pandemic, 73 percent of those asked pointed out things are now even worse.
Added delays have also wreaked havoc in terms of beneficiaries receiving the money to which they are legally entitled.
Mr Cousins went on to state that at a huge time of financial stress across the UK, added delays have meant money has been held up in the probate system.
These are funds which could be used to relieve mounting financial pressures and mental stress.
The money could even be put back to work in the UK economy, which is unfortunately ailing due to the pandemic’s effects.
He remarked: “Having assets trapped in the system due to administrative inefficiency is a desperately poor position to be in.”
But as huge delays continue, it is important for Britons to be abreast of the costs which could come their way, now perhaps more than ever before.
Being fully armed with this knowledge can ensure people are in the best position to tackle the task which lays before them.
Mr Cousins concluded: “Simply put, if you seek help from somebody to help you through the process, the longer they have to spend on it, the more likely it is you will have to pay more – sometimes this can take a significant amount of time.
“Because everyone’s lives are more complicated now – for example, more pensions, more finances, fundamentally different to the older days, and families are more complicated – the landscape is more and more difficult to pull together.
“As long as that fragmentation continues, the time it takes if the system stays as it is will naturally extend, which will cost you more if you’re paying someone to help you.
“The base cost of applying for probate is unlikely to change, but the time you will have to invest dealing with this is likely to extend.
“It is important for people to consider the financial cost, but also the hidden emotional costs which may arise.”