fixed fee solicitor for executorship

[Eboli]

Is anyone aware whether you can negotiate a fixed fee for a solicitor to act as an executor (say £x + inflation increase from date of will)? Every approach I have made has resulted in a request for a percentage of value of my estate.

Some background may be helpful. I have an estate that comprises one property + investments + cash + chattels. There will be a sizeable IHT liability even after increases in the nil-rate band as a widower and main residence increases. I have no family and after charitable gifts of specific amounts I want to divide the estate into 5 equal parts and gift each part outright to 5 individuals (assuming they survive me). Leaving aside the chattels (which I can provide for in the will) it seems to me that the solicitor needs to fill the IHT forms; pay IHT; get probate; then realise the investments (all in an ISA) and sell the property; and then add the cash and divide the total after expenses and write cheques. I cannot see why this should reasonably cost more than £30K (excluding the legal and other costs of selling the property, of course)...or perhaps I have just been unlucky with the lawyers I have sought quotes from?

Any thoughts?

Eb

[didds]

This isn't a legal "answer" - but on a pragmatic approach if eg the bulk of that 30K was disposing of the house on your death, you could possibly consider an equity release deal so you get cash up front and the mob you deal with just gets the house (I think that's how it works anyway!). then the cash can be part of easily distributable inheritance. And presumably the executor's job will be much simplified and thus be cheaper.

Or you could distribute the up front cash in advance at £X a year to the beneficiaries and if you live > 7 years it drops out of the IHT arena (I think that's how it works!).

Or place the house in an 6 way trust leaving the 5 beneficiaries to sell/whatever and distribute the 1/6th portion appropriately - again avoiding IHT implications (7 year rule again?).

There has to be other methods of minimising the house sale implications as well. Of course - you may not be that bothered

Somebody who knows what they are on about will be long soon!

didds

[Slarti]

A possible way round the solicitor's fees issue would be to name some or all of your 5 individuals as the executors and then, at the time and if they feel the need, they could consult a solicitor for anything required.

I've just finished being executor for a friend's mother's estate (I was the emergency spare in case he and his brother were both gone) and it was no great strain. Especially as friend did all of the work and I just signed a couple of documents.

But the estate could have hired a solicitor if needed.

Slarti

[Clitheroekid]

I cannot see why this should reasonably cost more than £30K (excluding the legal and other costs of selling the property, of course)...or perhaps I have just been unlucky with the lawyers I have sought quotes from?

£30k?? That seems to be an extraordinarily large sum for what sounds like a relatively straightforward estate. If that's the sort of price you've been quoted then you have indeed been unlucky with the lawyers you've spoken to.

Many firms these days don't apply a `value' element, i.e. a percentage of the estate. There's really no justification for doing so, as it's not inherently any more difficult to deal with a £5m estate than a £50k one. The normal charging mechanism is based on hourly rates for the work done, and it's not unduly difficult to estimate the amount of work involved in a straightforward estate.

From what you've said I would not think you should be expecting to pay more than £10k in legal fees, and it may - depending on your age and state of health - be possible to agree that the solicitors' charges should be capped at a specific figure.

A possible way round the solicitor's fees issue would be to name some or all of your 5 individuals as the executors and then, at the time and if they feel the need, they could consult a solicitor for anything required.

I would agree that this is probably the best approach - though you can only have a maximum of four acting executors. The residuary beneficiaries have a financial interest in carrying out the administration economically, and even if they don't want to deal with it themselves they can shop around after your death to get the best deal.

You should also bear in mind that with technology developing so quickly, particularly in the realm of artificial intelligence, the concept of appointing solicitors to deal with a routine probate may be completely outdated by the time you drop off your perch!

[Lootman]

Many firms these days don't apply a `value' element, i.e. a percentage of the estate. There's really no justification for doing so, as it's not inherently any more difficult to deal with a £5m estate than a £50k one. T

I think that case can be made for any fee based on value.

Why should a conveyance be based on home value? A million pound home can be sold as easily as a 100K home.

A low-value tax return can be messy whilst a high-value tax return is easy to do, so accountants should not be charging by value either.

We used to have share trading commissions that were based on value. Now it's usually a fixed charge because trading 100,000 shares is the same work as trading 100 shares (mostly anyway).

The one "fee" that should be value-related is insurance, because the premium must be related to the amount of loss at risk.

[Eboli]

Many thanks for all the replies. The £30K was based on one of the higher charges based upon the value of the estate (and, yes, I am trying to enjoy spending it as fast as possible ) Clearly I have a lot of sympathy with an upper cut-off amount if not a flat fee. But it is not quite true that larger estates are just as easy as there are more things for which valuations need to be obtained and in my case the enhanced IHT allowances are not automatic but have to be claimed.

Incidentally, I had previously provided (in an earlier Will) that up to four of the five residuary beneficiaries could be executors. However, none of them seems keen with the idea and at least two are at daggers with each other. So I thought a solicitor might be a solution to both problems. I would much prefer the solution of appointing them and writing a note to them to appoint a solicitor as needs be (but I suspect even that might produce difficulties).

Thanks to all,

Eb.