Rise in “DIY probate” is stoking risk of tax avoidance and fraud



uk/resources/services-directory/title-research” target=”_blank”>Title Research, which is a Legal Futures Associate, says government statistics indicate that the share of probates undertaken by solicitors has fallen from 72% of all probates in 2004 to just 65% in 2009

Julia Szczepanski of Title Research said: “An almost inevitable effect of fewer people using a solicitor or other professional adviser to undertake a probate is going to be a rise in incorrect distributions of estates, fraudulent distribution of estates and inheritance tax evasion

The idea that relatives can save on solicitors’ fees might be an attractive one but probate and inheritance tax (IHT) are incredibly complex areas and the chances of making a costly mistake are high

Title Research says that the rise in DIY probate could, in part, explain why there are an increasing number of legal disputes over inheritance that reach the courts and perhaps why HM Revenue & Customs are now so concerned over possible IHT evasion

There has been an 86% leap in the number of High Court cases launched by claimants dissatisfied with their inheritance

Legal disputes in the High Court specifically relating to the “provision for dependants” jumped to 80 in 2008, up from 43 in 2007

In 2006 there were just 10 such cases recorded

Ms Szczepanski added: “Law firms we work with are reporting a definite increase in contentious probate work

Legal disputes can quickly burn through the value of an estate, so DIY probates can be a false economy

” Further, DIY administrators can open themselves up to substantial legal claims, she said

“There are lots of ways to slip up, for example when you value a property you need to take into account the potential redevelopment value of that property and HMRC now expect you to get valuations from three estate agents rather than just two

Title Research said the problems with DIY probate are exacerbated by the fact that 60% (295,103) of registered deaths last year did not involve a will

“Law firms are very rigorous about appointing specialist firms like ourselves to search for potential beneficiaries – it’s questionable whether all DIY probates undertake proper searches

That corner cutting can leave the executor facing a substantial legal liability

    Readers Comments

  • Is this evidence of the market reacting to perceived lack of trust & value of current service offering?

  • How many firms doing probate work offer to do it on a fixed fee or a contingency? Predictability might make a significant difference to the willingness to instruct??

  • I am a trusts and estates practitioner. My field relies heavily on the prompt establishment of a strong solicitor- client relationship. Probates rarely deal with just administration but also tax mitigation, as well the emotional impact on the family. The current financial climate will encourage individuals to do it themselves but the standard imposed by the probate registry and HMRC are the same. Untrained executors will make mistakes. However with new HMRC penalty regulations in force those mistakes will be even costlier. Probate is one of the few areas that has not attracted client complaints against solicitors. The complexity of the speciality does not make it a natural fixed fee service; as it is only after detailed investigation do many of the contentious issues arise.

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