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A recent case has highlighted the dangers of taking on the administration of someone’s estate, “DIY Probate”, without appropriate professional advice.
Hannah McDonald died leaving a Will appointing Solicitors to act as her Executors. Hers was a sizeable estate with Inheritance Tax due. Even so, he asked the Solicitors to step down as Executors, no doubt in a bid to save costs. Instead, a Mr Harris chose to administer the estate himself.
He managed to obtain a Grant of Probate. This enabled him to sell Hannah McDonald’s house. He then arranged for the proceeds of the sale to be paid to her brother, a beneficiary. This was done on the understanding that the brother would pay the Inheritance Tax due (more than £300,000!).
Unfortunately for Mr Harris, the brother did not pay the Tax and left the UK for Barbados.
Not surprisingly, the HMRC are wanting their Inheritance Tax. Proceedings were issued against Mr Harris as, in his role as Personal Representative, he is personally liable to settle the Tax due.
He was able to contact the brother. Even though he had acted in good faith his ignorance of the fact that Tax can be recovered from him is no excuse in law.
The Court confirmed that he was personally liable and as he does not have the funds, he faces bankruptcy!
Admittedly such cases are very rare. More commonly Personal Representatives are held personally liable for relatively minor errors. For example, a couple of years ago, two Executors acting without legal advice were fined £5,000 for not correctly declaring the income of an estate.
Whilst having Solicitors administer an estate is not the cheapest option, it does provide peace of mind and help to ensure that such problems will be avoided. The advice and protection afforded by involving Solicitors can be invaluable at such an important time.
If you would like more information, call 01270 625478 to speak to one of the solicitors in the Wills and Probate department or complete this form for a call back. Alternatively you can visit our Wills and Probate services page here.
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