The compliance officer and manager of a firm has to pay a fine of £2,000 after the firm took on a probate matter with no experience. The Solicitors Regulation Authority (SRA) imposed the penalty after the solicitor showed a ‘disregard for his regulatory obligation to exercise proper management’ over the business. This lack of control and oversight allowed for almost £58,000 in client monies to be held without the firm even having a secure client account.
In December 2017 the firm began work on a probate matter despite having no prior experience. The fee-earner assigned to the work had never handled a probate matter previously.
No file reviews were completed by any manager at the firm and there was no due diligence of any client. It was not spotted that the estate of the probate matter had debts of £6,000 before estate monies were distributed to beneficiaries, and potential beneficiaries with equal or greater claims to the estate were not identified. A total of £37,600 of estate monies were paid out to several third parties inappropriately, including payment of hospital bills for relatives of the deceased.
What is Probate?
Probate is the legal and financial process that deals with the property, money, and possessions of someone when they die. When a person dies, before the executor of their Will can distribute their estate, they must apply for probate. After the court grants probate, the next of kin or executor can then deal with the deceased’s assets.
The Process of Probate
The process of probate often involves a lot of complicated tax, legal and financial work. Therefore, it breaks down into five stages.
- Identifying all the deceased’s assets and liabilities to determine the value of the estate.
- Paying inheritance tax and applying for the Grant of Representation.
- Selling the deceased’s assets, paying liabilities, and accounting to HMRC for any further tax due to or from the estate.
- Preparing estate accounts showing all payments, and showing the balance left for the beneficiaries. Sending the accounts to the executor for approval.
- Transferring the assets that the beneficiaries wish to keep, and distributing the Estate.
Probate is required in England and Wales when the deceased owns property. This includes houses, buildings, and land. When a bank or financial institution requests a Grant of Representation, this also requires probate. Usually, this happens when property goes over the threshold that the institution sets.
The process of probate can be long and complicated. This is why it is important for the solicitors dealing with the case to know what they are doing. If they do not know, they can make mistakes or distribute the estate incorrectly. This was the case at the firm who had no experience handling probate cases.
How We Can Help
Here at The Inheritance Experts, we work with solicitors who have a wealth of experience dealing with Probate. Contact us today by filling in our contact form or by calling us on 01614138763 to speak to one of our friendly knowledgeable advisors.