The Pitfalls of DIY Probate!
The rules of Intestacy can be complicated. This is the true story of two brothers who found out the hard way, just how things can go wrong with probate if you don’t know these rules!
A few years ago, the cousin of two brothers died alone in the local hospital. It wasn’t until some days later that one of the two brothers, we will call him Steve, received a phone call from the hospital informing him of his cousin Fred’s demise. Steve informed his brother Jim and they both went down to the hospital to make sure their cousin had a proper send off as he deserved.
Once this had been completed Steve and Jim had to set about the unenviable task of dealing with Fred’s estate. This is known as to administration of an estate or probate. This meant driving over to Fred’s house and sorting out his personal belongings and trying to locate all the documentation which would inform them of the size of the estate they were dealing with. The first thing they looked for was Fred’s Will, but try as they might, no Will could be found for Fred. This meant Fred had died Intestate!
Whilst at the house a woman, who was completely unknown to either John or Jim, arrived at the door with the next-door neighbour. The neighbour explained that Fred had said this woman could have all his prize Koi carp once he died. Knowing no better and taking the neighbour’s word, Steve & Jim allowed the woman to remove the Koi from the pond. This was their first mistake! Once someone dies any verbal instruction or gift fails. For a gift of this kind to succeed it must have been given and received whilst Fred was alive. So here the fish became part of the estate and needed to be dealt with through probate.
Having found no Will and not knowing of any other living relative Steve & Jim applied to the Probate Registry, to administer the estate of their late cousin Fred. This was approved, and a Grant of Letters of Administration was issued. Steve and Jim now acting as the administrators of their cousin’s estate began selling Fred’s assets and collecting in the money. Believing in all honesty that there was only the two of them left alive in the family they then divided the money on a 50/50 split. This was their second mistake! More investigation should have been carried out. Fred had no children and his wife had already died. However, Fred did have uncles and aunts. Some of these had also died, but they had children of their own. This information can be found by tracking family history via records of births and deaths.
Steve took his half and invested it into a small flat. Jim decided to improve his house by adding a conservatory. This whole process had taken just over a year to complete. Both brothers, happy that they had done everything correctly, then went about their business as usual. It was just about this time that Jim received a phone call from someone he did not know, claiming to be a relative of Fred. He claimed that he was entitled to some of Fred’s estate. As you can imagine this came as a total shock to both Steve and Jim. However, they agreed to meet with this person later that week.
At the meeting it became clear that this person was in fact a relative of Fred and because Fred had left no Will, this chap (we will call him Harry) was entitled to a share of the estate. But of course, the brothers had spent some of all of the money. This was clearly a mess, the pobate process had not been carried out correctly and Steve and Jim began to wonder if there were any more relatives that they did not know about. Fortunately, at this point they spoke to us. We advised Steve and Jim to enlist the help of a professional Genealogist, who could trace the family history and tell the brothers just how many relatives there were and how many had an entitlement to receive some of Fred’s estate.
Some months later the Genealogist’s report was received. It was not good news, there were eleven people who stood to inherit from Fred’s estate. Steve and Jim did not know any of them and they didn’t think Fred did either! Nonetheless, because there was no Will, the law dictates who can receive some of Fred’s wealth. Now Steve had to sell the flat he had bought to recover the money and repay it to the Fred’s estate. Jim had to get a loan to cover the cost of his new conservatory, so he could repay his money too. And so, with all the names and addresses in hand Steve and Jim set about paying out the estate to all the beneficiaries. If only it had been that simple!
One of the beneficiaries lived somewhere in Devon or Cornwall and for his own personal reasons, did not want to be found. Another lady was quite poorly and had been diagnosed with dementia. Her husband sent a document from the Department of Work and Pensions to the brothers. In that document it said the husband was dealing with all of this lady’s pension payments due to her dementia. Steve and Jim were just about to pay out he share to her husband when they again come to see us. We immediately advised them that they were not legally entitled to pay this money to her husband. The lady had dementia and could not make her own decisions. We asked if the husband had a Lasting Power of Attorney for his wife, but he didn’t, and neither was he able to get one because her dementia was too server. (See out article about Power of Attorney) This meant there was no one able to provide the estate with a valid receipt and the money she should have inherited had to stay in the estate account. It was only after this lady had died that her executors could act for her and they were able to receive the inheritance from Fred’s estate.
In the meantime, another lady had been located in Australia, who was also going to inherit under the intestacy rules. Of course, time was dragging on and Harry was getting inpatient. He demanded to know when he was going to get his money. He began phoning, harassing and threatening Jim. Jim was now dealing with this on his own because his brother Steve had been diagnosed with terminal cancer and was himself now in hospital. We advised Jim about the relevant aspects of the Protection from Harassment Act 1997. Harry was duly served notice under the terms of the act and fortunately that stopped the calls and threats and Jim could carry on with administering Fred’s estate.
Sadly, Steve died some months later. That resulted in his children receiving his share of Fred’s inheritance sometime later. Eventually all of the beneficiaries were given their share of the estate and Jim could get back to his normal life without having to worry who was going to inherit what. In total it took over five years, from being told their cousin had died to issuing the last beneficiary with their inheritance! (It can take much longer)
Steve and Jim thought they knew what they were doing when Fred died. They thought they knew who should benefit from his estate and how to go about doing that. Unfortunately, they only knew some of the process, but they were unaware of the pitfalls that lay before them. It should be said that Both Steve and Jim acted in good faith and did the right thing by all of the beneficiaries in the end.
DIY Probate is an option, but if you get it wrong, the responsibility rests with you. If someone does not get the inheritance they should because you have not done it correctly you are personally liable.
We provide you with a free, no obligation quote for probate work. Our fees are fixed and transparent. Save yourself the hassle and stress of dealing with the Probate process.