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Pre-Paid Probate Plans

There is absolutely no need for you to pay for the administration of your estate upfront. If you are ever asked to sign up to a prepaid probate plan you need to say no.

This could be the next big mis-selling debacle for our older and vulnerable clients, who I for one, really care about.

The usual scare mongering tactics are employed by companies who sell these products. They try to frighten clients about the professional advice provided by regulated lawyers by saying probate is needed for assets in excess of £5,000, that a bank or solicitor has to complete the probate process or that regulated professionals charge 4% of the value of the estate or more for complex estates.

These providers offer to fix costs to avoid unnecessary expenses, a reduction in stress by minimising legal responsibility, to ease anxiety by protection from financial liability and promise the plans are quick and easy to arrange. They will tell you about the huge responsibility that will come at a distressing time and the personal legal liability that will fall on your shoulders, how wills could be misread and interpreted wrongly, how liabilities and debts could be incorrectly assessed, funds could be distributed too soon or tax forms could be incorrectly completed. And all of these could happen whether you use a company that offers a prepaid probate plan or a regulated lawyer! They are not your saviours.

So you can compare, I thought I would tell you how I run an estate administration in my office.

I will draft a will for for a fixed price and store it in my strongroom for free. If you wish to use my company to deal with the administration of an estate you can but you have the freedom of choice to do as you wish. I will not charge you now for an estate that may or may not need a Grant of Probate in the future. I will not make you appoint my firm to act as an executor so I have to deal with the administration and charge.

If you choose to appoint Argo to assist you in your role as executor you can choose the service you wish to purchase from me and pay for it when it is needed, and not before. You will only pay for the service you purchase. The fees I charge are paid by the estate and not by you as executor. I make a minimum charge of £2,500 plus VAT to deal with an estate but my fees are clearly detailed in my terms of business and certainly never reach 4% of the value of the gross estate. Sometimes there are things that need to be done which fall outside the scope of daily estate administration so I charge separately for these and you can see what I charge before I do the work for you. If you do not wish Argo to complete the full administration you can pick and choose the jobs you want me to do at an agreed price.

It is my job to protect you as an executor. If you act you do have a personal liability if things go wrong but you pay me to ensure they don't. We check for unclaimed assets, complete comprehensive searches for assets, chase down missing beneficiaries, advertise for debts, correctly complete the application for the Grant, deal with all tax calculations and save you from dealing with HMRC. If something does go wrong I have insurance that you can claim against so the liability does not sit with you.

It is the asset that governs whether you need a grant in an estate not the value of the estate. If you have shares or a house, or a significant balance in a bank account it is likely you will need a grant. If you own things jointly you should not need a grant and if you don't need a grant there should be minimal or no costs involved in the administration.

One question I have not been able to answer is what happens to the money you pay. If you prepay for a funeral plan the funeral company has to protect your money until it is needed. It is held in a special trust which is overseen by the Financial Services Agency who check and supervise funeral plan providers. They have to be regulated because they are holding your money. I cannot find any evidence to indicate how the pre paid probate companies are looking after your money for the future and what happens to it if they go bust (which these companies often do).

Why would you want to give a sum of money to someone you have never met, with no information to how it is being looked after, with no guarantees they will be around in the future, when you don't know if you will need the work done anyway because you may not die for decades. Surely that is like giving a stranger on the street your hard earned cash and taking the risk he may bring it back sometime?

This is absolutely not worth the risk. Your money is your money and should be kept with you because you may need it. You cannot predict the future and what will happen so how can anyone else.


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