PAYING FOR PROBATE – THE UNKINDEST CUT OF ALLMonday 11 February 2013
• Charging a percentage of the value of the estate, not fairest for families • Most people could save money if they paid according to the complexity of the estate
PAYING FOR PROBATE – THE UNKINDEST CUT OF ALL
Mourning relatives are not getting the best value when it comes to organising probate, according to new data from Saga Legal Solutions#. The vast majority of legal firms set their fees for probate as a percentage of the value of a person's estate. However, Saga believes that in 19 out of 20* cases families could be charged less if the price was determined on the complexity of the estate instead.
The average estate was worth £152,358 in 2002, but increased by almost 75% to £265,281 by 2010**. Of course, the size of an estate does not necessarily mean that the estate costs more to administer. The way legal services charge for probate is generally based on a percentage of the value of a person's estate, meaning that higher value estates incur higher probate charges, regardless of how much legal work there is to be done to settle the estate. However, Saga Legal Solutions only charges people on the amount of work it takes to settle the estate.
Roger Ramsden, chief Executive, Saga Services, commented: "As people get older many naturally tend to simplify their financial arrangements, closing down unwanted accounts or putting their money into fewer accounts so it is easier to manage.
“But despite many people simplifying their estate, many solicitors take a percentage cut from the estate – probably the unkindest cut of all as their work doesn’t depend on the value of the estate, but its complexity. Saga is determined to ensure that families and beneficiaries get their fair share of an estate, rather than lining lawyer’s pockets.”
A Saga survey of almost 4,000 people who had experience of arranging probate, found that over a quarter of them said that they were unclear of the legal costs charged to them until afterwards or that they paid more than they expected to***.
• *According to Saga Legal Services customer data
• *Source - ONS - identified personal wealth statistics
• ***Research conducted by the Saga Populus panel amongst 10,203 over 50s between 29th and 31st August 2012
• The scenarios below illustrate the different prices people could be charged based on the two methods of charging.
Scenario 1 Scenario 2 Scenario 3 Scenario 4 Value of estate £500k £330k £500k £1.25m Value of property £450k £280k £185k £170k Bank accounts 1 1 2 1 Savings accounts 0 4 6 3 Share portfolios 0 5 6 30 Pensions 2 0 0 4 Specific legacies 0 11 0 1 Charities 0 0 0 4 Saga Legal Solutions fee (based on complexity of the estate) £1,890 £3,640 £1,344 £3,920 Fee @ 1.5% (typically charged by high street solicitors) £7,500 £4,950 £7,500 £18,750
Saga’s fixed price Probate Service includes full professional legal service, advice and support with other aspects of the administration of an Estate.
Saga service offers fixed fees agreed in advance
#Please note: Saga Legal Services and online legal documents are currently only available for use in England and Wales
Value of estate
Value of property
Saga Legal Solutions fee (based on complexity of the estate)
Fee @ 1.5% (typically charged by high street solicitors)
For more information about Saga Legal Solutions please visit www.saga.co.uk/legal
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