Probate guides

The costs of probate

Managing the estate of somebody who has died can be a complicated, and it can be difficult to forecast the costs that you are likely to incur.

Here's a breakdown of the costs commonly associated with managing an estate to help you to plan ahead:

1. Probate Costs:
• Probate Application Fee: This is the fee paid to the government for obtaining the legal authority to administer the estate. The fee varies based on the estate's value.
• Executor Fees: The person handling the estate, known as the executor, can claim reasonable expenses for their time and effort.
2. Legal Expenses:
• Solicitor's Fees: Many executors work with probate solicitors to handle the legal aspects of estate administration, such as obtaining probate, dealing with assets, and settling debts.
• Estate Administration Costs: These cover legal work required to distribute assets, settle debts, and manage the estate's affairs.
3. Inheritance Tax (IHT):
• IHT on the Estate: Inheritance Tax is payable if the estate's value exceeds the current threshold (nil-rate band). The rate is 40% on the amount over the threshold.
• Gifts Tax: Tax may be due on gifts made by the deceased within seven years of their death.

You can read our guide to Inheritance Tax here.

4. Funeral Expenses:
• Funeral Director's Costs: These include the funeral service, coffin, transportation, flowers, and any additional arrangements.
• Burial or Cremation Fees: Charges for interment, burial plots, headstones, or cremation services.
5. Debts and Liabilities:
• Outstanding Debts: Any debts owed by the deceased, such as mortgages, loans, credit card balances, and utility bills, must be settled from the estate.
• Creditor Claims: Valid claims made by creditors against the estate's assets need to be addressed.
6. Asset Valuation and Administration:
• Valuation Fees: In some instances, the estate's assets, including property, investments, and personal belongings, may need to be professionally valued.
• Administration Costs: This covers the costs of managing and safeguarding assets until they are distributed. For example, a classic car may need to be safely stored in a secure location.
7. Property Costs:
• Maintenance and Insurance: Expenses to maintain and insure properties within the estate until they are sold or transferred.
• Utilities and Council Tax: Keeping up with utility bills, council tax payments, and other property-related costs.
8. Miscellaneous Expenses:
• Postage and Stationery: Costs related to sending notices and correspondence to beneficiaries, creditors, and government bodies.
• Travel and Communication: If the executor or beneficiaries live far from the deceased's location, travel expenses and communication costs might arise.

How to cover estate costs:

If you’re the Executor or Personal Representative of the person who has died, you may be able to cover the costs associated with the estate’s management using accessible cash savings from within the estate.

However, in some cases the estate will not include sufficient cash to cover these costs. In these circumstances, an Estate Advance can help.

Our Estate Advance is a special kind of loan that allows Executors and Personal Representatives to borrow for the specific purpose of paying estate costs – otherwise known as ‘Testamentary Expenses’ – without having to pay the loan back themselves. This is because we are repaid using funds from the estate once assets have been sold to free up cash further down the line.