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Are Prepaid Probate Plans and Packages Good Value?

Are Prepaid Probate Plans and Packages Good Value?

Many of us are unaware that we need probate when it comes to managing and sorting out a deceased relative’s Will. Writing a Will itself can be a daunting experience but having to sort out someone else’s assets and distribution to the honourable heirs can be taxing at the best of times.

Imagine having a professional organisation who will sort all of your estate for you for a one off lifetime fee, Sounds good?

Prepaid Probate Plans are the new way of getting your assets, property and wealth organised. You pay a competitive probate fee in advance and this pre-paid probate means your family do not have to pay for it or organise anything after you die. It means the legal costs and the management of your wealth assets and property are organised and planned for in advance.

A grant of probate has to be obtained before administering the estate of a deceased person, resolving the claim and distributing the deceased estate under the Will can be undertaken. By granting probate to the executor they are then able to distribute the wealth and possessions according to the Will.

Occasionally Wills are complex (or indeed there is no Will) and the distribution of wealth becomes a very messy task. With this can come tremendous legal and tax complexities in the probate process. Solicitor’s fees and the costs of court lawyers can quickly add up and are collected from the deceased’s estate.

How much does Probate cost in the UK?

Probate does not need to be undertaken by a professional, if you are sure the person doing it is both capable and indeed has enough time. Probate can take 6 months or more and significantly more on a complex estate.
Some solicitors will offer a fixed fee and you should check if this is for obtaining the grant of probate or for full estate administration.
Commonly, solicitor’s charge a percentage of the estate value, often 2%, irrespective of the amount of work that is required. If your solicitor, or bank charges an hourly fee then costs can very quickly increase and you have very little control over the final fee.

Ben Jackson, 33, knows only too well, of using a solicitor with no costs fixed in advance. He explains,

“After the death of my mother, Jackie to breast cancer, I felt unsure of what I should do next. I found my mum’s Will and sought legal advice on how to apply for probate, I was the executor of her Will. I was advised by the said solicitor, they would apply for the grant of probate on my behalf. They sent me a bill for £458 of an application letter, we then got the probate. They then charged £765 for another letter and administration costs due. Every single week we had to pay another charge, overwhelmed was an understatement. Being the oldest of my siblings and the financially minded one, it was very much left to me to arrange. Her Will was read and the distributions to the rest of family, grandchildren and nieces, were split, however, I had no idea that after all the legal and administrative fees we were charged, the estate had a loss of £15,000. Money that should have been used to fund university fees in the future and inheritance to the grandchildren in trusts for when they reached the age of 18”.

At a time of grief and vulnerability it is unsurprising that people use a professional to help them through what can be considered a daunting task. But it simply doesn’t have to cost this much.

Pre-paid probate packages could be a solution to this problem. It is not right for everyone and indeed individual circumstances will determine if it’s right for you and your family. A prepaid probate plan covers the probate process at a fixed cost, in advance. There are usually 2 types of plan,

  1. Applying for the grant of probate.
    This is obtaining probate and usually no more. The estate will then have to be administered by the executors.
  2. Full estate administration.
    Will usually include applying for the grant of probate, administering the estate, paying off debts and distributing the residue to the beneficiaries.

A good prepaid probate company will advise you if it will be of benefit, if it is cost effective and worthwhile and also tell you in advance what is not included in your plan.

Prepaid probate plans vary in cost and service provided dependent on the type of plan you opt for.

Benefits of a Prepaid Probate Plan

  • If you have planned your Will, LPAs, Trusts, Inheritance Tax, Funeral it is a natural step to also pre-plan your probate.
  • It ensures there is no burden, nothing for your loved ones to do at a time when they are grieving.
  • The costs are set and paid in advance so it will not be taken from your estate value prior to distribution to your beneficiaries.
  • You know exactly how much it will cost.
  • Costs are fixed at today’s prices. None of us know when we will die and what the price of probate will be in the future. Future costs will, at the very least, rise with inflation, a pre-paid probate plan protects against this.
  • Peace of Mind

If you wish your loved ones to be executors and to apply for probate we recommend you speak to them and ask them in advance. Many people do not understand how much time and work is involved. You should be sure that when the time comes they don’t simply feel they are unable to do it and then decide to appoint a solicitor without due consideration. It is at this vulnerable time they are more likely to make a decision that could result in many thousands of pounds being removed from the estate value.

If you are considering purchasing a probate plan in advance you should do thorough research to check costs, inclusion, exclusions and indeed how your money is protected in the time between paying for the policy and activating it.