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Probate Prepayment - Lightening The Load

Date Added: February 20, 2010 04:18:31 PM
Author: Administrator
Category: Legal Experts


Probate Prepayment - Lightening The Load



Author: Edith Peterson


Probate pre-payment is similar to pre-paid funeral plans and probate fees are based on the amount of work involved in managing an estate as against computation based on the value of the estate.


The probate plan is paid for prior to the person’s death so the fees are no longer part of the estate. The value of the estate for inheritance tax liabilities is therefore reduced. And unlike funeral charges, probate fees cannot be deducted from the estate when they are incurred after the death.


Probate pre-payment can be taken out any time in a person’s life and fees are held by an independent trust which guarantees that the services will be provided whenever needed. The cost that entails in the preparation of a new will or reviewing of an existing one is also included in the plan.


These types of probate pre-payment plans can actually save you a great deal of money when handling the estate of a family member. For instance, from a £200,000 estate a 4% pre-payment charge of normal banks would take £8000 whilst a solicitor normal 2% charge would take out £4000.


When you opt to take out a pre-payment probate plan, it means that you can protect more of the estate, paying less and at the same time keeping the fees of the inheritance tax net whilst also protecting the estate against inflation of legal costs.


Generally, probate brokers can quote probate fees at a fraction of 4% of the value of the estate VAT included, which banks commonly demand.


Moreover, because pre-payment avoids inheritance tax, your actual savings is even greater- for instance a £5000 pre-payment plan is in effect £3000 once the IHT is factored in. Professional advisers must therefore consider pre-payment as best advice when advising those drawing up wills.



Article Source: Link



About the Author

Edith Peterson is a freelance author who has a vast knowledge in probate pre-payment. For more information please visit:  http://www.finalduties.co.uk

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