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Checking Understanding

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  • Checking Understanding

    I have been asked to sign a solicitors letter regarding the Executory Duties for a relatives will. I am joint executor.
    In the letter under costs for Process he says ( inter alias) they will take
    5% for 'Collection of Income"
    1.5% for realising capital and
    1.5% for transfer of moveable estate.

    Can you confirm exactly what this means ?

    Thank-you
    Tags: None

  • #2
    Re: Checking Understanding

    Hi M1B,
    I am confused! Not a method of charging that I have seen before and I'm having difficulty understanding exactly what he means by collection of income etc etc.

    Are you the joint executor with this solicitor? Or have you approached this solicitor to act on the executors behalf dealing with the estate? If the solicitor is not your co-executor then it may be worth getting some other quotes before committing to them.

    I really am not sure how he is separating the 'charges' here but my first thoughts were that collection of income may be the information gathering that needs to be undertaken to obtain the necessary values in order to complete the relevant inheritance tax forms needed to obtain probate. I suspect realising capital would be the gathering in of the assets, once probate has been granted and transfer of moveable estate (ie not property or land) would be the distribution part of administering the estate.

    If that is the case then in my opinion this does seem rather an excessive amount to charge. However, as I am really not sure exactly what he means by the terms that he has used, I think that you need to go back and have him explain it in a way that you can understand, before signing the client care letter.

    Usually solicitors charge either a fixed fee for certain aspects of the process or an hourly fee. They can also charge a 'value element' which is a percentage of the estate value. The percentage may differ depending on the type of property so for example the value element applied to a residential property may be 0.5% and for all other assets 1.5%

    Generally for a straightforward estate the total fees however they are calculated, whether hourly or hourly plus a value element would be about 2% of the whole estate value. This can of course differ depending on the type of estate and if any complications arise. Banks appointed as executors in my experience charge about 6%.

    I hope this gives you a little guidance. Sorry I couldn't just answer your query. Pin the solicitor down regarding the fees before you sign anything. If he is the co-executor you may unfortunately have little choice, but it may be possible to negotiate his fees further between you before committing to the above scenario.
    I am a qualified solicitor and am happy to try and assist informally, where needed.

    Any posts I make on LegalBeagles are for information and discussion purposes only and shouldn't be seen as legal advice. Any practical advice I give is without liability. I do not represent people on the forum.

    If in doubt you should always seek professional face to face legal advice.

    Comment


    • #3
      Re: Checking Understanding

      Found this on BBM SOlicitors website ( http://www.bbmsolicitors.co.uk/uploa...eofcharges.pdf ) which might give a clue ( means nothing to me I'm afraid )

      E ADMINISTRATION OF TRUSTS
      1 Collection of income
      Where BBM collects income and distributes it among beneficiaries BBM shall be entitled to charge for collection of income on:

      (a) Interest and dividend
      s on stocks and shares collected by BBM.
      Where individual payments are up to
      £1,000 5%
      Next £4,000 3.5%
      Balance over £5,000 2%

      (b) rents, interest on heritable securities and other miscellaneous and periodical payments: not to exceed 10% of actual amount received.


      There's also a bit on Realising Capital ( page 15 )



      Most other mentions I can find seem to be US based as they refer to the IRS.
      #staysafestayhome

      Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

      Received a Court Claim? Read >>>>> First Steps

      Comment


      • #4
        Re: Checking Understanding

        Whatever it means any fees charged by law firms are meant to be clear and transparent. I wouldn't say the fees that you have been quoted are, so you need to get clarification before you do anything.
        I am a qualified solicitor and am happy to try and assist informally, where needed.

        Any posts I make on LegalBeagles are for information and discussion purposes only and shouldn't be seen as legal advice. Any practical advice I give is without liability. I do not represent people on the forum.

        If in doubt you should always seek professional face to face legal advice.

        Comment


        • #5
          Re: Checking Understanding

          Originally posted by Peridot View Post
          Hi M1B,
          I am confused! Not a method of charging that I have seen before and I'm having difficulty understanding exactly what he means by collection of income etc etc.

          Are you the joint executor with this solicitor? Or have you approached this solicitor to act on the executors behalf dealing with the estate? If the solicitor is not your co-executor then it may be worth getting some other quotes before committing to them.

          I really am not sure how he is separating the 'charges' here but my first thoughts were that collection of income may be the information gathering that needs to be undertaken to obtain the necessary values in order to complete the relevant inheritance tax forms needed to obtain probate. I suspect realising capital would be the gathering in of the assets, once probate has been granted and transfer of moveable estate (ie not property or land) would be the distribution part of administering the estate.

          If that is the case then in my opinion this does seem rather an excessive amount to charge. However, as I am really not sure exactly what he means by the terms that he has used, I think that you need to go back and have him explain it in a way that you can understand, before signing the client care letter.

          Usually solicitors charge either a fixed fee for certain aspects of the process or an hourly fee. They can also charge a 'value element' which is a percentage of the estate value. The percentage may differ depending on the type of property so for example the value element applied to a residential property may be 0.5% and for all other assets 1.5%

          Generally for a straightforward estate the total fees however they are calculated, whether hourly or hourly plus a value element would be about 2% of the whole estate value. This can of course differ depending on the type of estate and if any complications arise. Banks appointed as executors in my experience charge about 6%.

          I hope this gives you a little guidance. Sorry I couldn't just answer your query. Pin the solicitor down regarding the fees before you sign anything. If he is the co-executor you may unfortunately have little choice, but it may be possible to negotiate his fees further between you before committing to the above scenario.

          Thank-you very much for your response. The solicitor is in fact a co-executor so as you allude to little choice. I did however meet with them (para-legal and solicitor) again today and based on your guidance tried to pin them down on the charges. Interestingly they said they were not used to such questions and were uncomfortable in the fact they too were unsure of some of the meanings !! Anyhow as a result of my discussions with them I am now clearer on some of the points. I do however intend to do some of the 'legwork' myself for the confirmation, out of interest and also to draw down the costs. Thank-you for your assistance.

          Comment


          • #6
            Re: Checking Understanding

            Hi M1B,
            As you mention, maybe the solicitor executor would be willing to let you do some of the 'legwork' obtaining valuations etc. This would keep the costs down but without a proper understanding of how they are charging their fees it is difficult to gauge. Both the solicitor and you would of course have to be certain who was dealing with what, so everything was covered.

            You could ask if they would be willing to renounce their position and allow you to deal with matters yourself as a sole executor? Of course your relative at the time seemed to wish the solicitor be appointed, but if the estate is relatively straightforward and there is little likelihood of there being any family dispute about the will then they should consider renouncing. They also have a duty to deal with the estate in the most appropriate way which includes looking after the assets, which if they are charging high fees when the estate is straightforward is not really appropriate. You would need to speak to them quickly about this before they have carried any work out.

            I'm glad you spoke to them and also a bit relieved that they were as confused as me with their pricings, so I wasn't missing anything. Although that is obviously worrying for you. Just insist they keep you regularly informed of their charges and if they appear to be unreasonable you are entitled to query them.
            I am a qualified solicitor and am happy to try and assist informally, where needed.

            Any posts I make on LegalBeagles are for information and discussion purposes only and shouldn't be seen as legal advice. Any practical advice I give is without liability. I do not represent people on the forum.

            If in doubt you should always seek professional face to face legal advice.

            Comment

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