Fees on inheritance

[Clare]

Hello, first time posting here.

I recently cam into an inheritance with my sister consisting of land, property and a small amount of money. The total value of the estate is about €1.2M.

The will was straightforward, only ourselves and a few other family members involved, and it has been completed fairly quickly with myself and my sister as executors. The solicitor sent out the bill for his fees, and we were gobsmacked to find that it was €30,000!

Can this be right? Is there a guideline figure? I was under the impression that it would be around 1% of the estate, which would be about €12,000. I didn't expect €30,000 at all.

Can anyone advise?

 

[mathepac]

... Can this be right? ...

Have you checked with the solicitor? Is there a breakdown of costs given, outgoings, professional fees, VAT? Did you ask for an estimate of fees etc upfront?

... Is there a guideline figure? ...

Not that I am aware of. Have you checked by searching the site for other examples / experiences?

... I was under the impression that it would be around 1% of the estate, which would be about €12,000...

How did you form that impression, did you discuss costs with the solicitor before allowing him / her to proceed with the work?

 

[Clare]

Have you checked with the solicitor? Is there a breakdown of costs given, outgoings, professional fees, VAT? Did you ask for an estimate of fees etc upfront?

We have now asked for a breakdown. The letter just stated the amount, no explanation of what or why.

Not that I am aware of. Have you checked by searching the site for other examples / experiences?

I have now done a search and found another thread suggesting that 2% is standard! That is still higher than I expected, and even at 2% €30,000 is very high.

How did you form that impression, did you discuss costs with the solicitor before allowing him / her to proceed with the work?

Foolish of me, I didn't discuss costs, and I didn't think there was a choice in allowing him to proceed. He was my late Aunt's solicitor, we were the executors. We just ploughed blindly on.

 

[Clare]

Anyone else have any advice?

It just seems crazy for the solicitor to charge €30,000 in fees, when in reality he did very little. Getting valuations, contacting accountant, calculating tax etc, we did ourselves.

The solicitor handled the paperwork and the land registry stuff etc, and charges €30,000???

 

[billythefish]

You might consider taking a case to the Law Society. But first, I would ask the solicitor to justify the fees. There might actually be a good reason for them that you're not aware of.

 

[Kate10]

Hi Clare,

I'm afraid you are way off on the work carried out by the solicitor. It is much more complex and involved that you think. I don't do probate myself (although have dealt with a few estates in the past) but some colleagues of mine still do it. The old scale fee used to be 3%, but fees have come down a lot in the last five years so of course you can expect to do better than that.

In this case I don't have the file so I don't have the detail of the work carried out. But filing the Revenue Affidavit, extracting grant of probate, dealing with title matters, stamping, tax returns, etc etc amounts to a lot of work for a solicitor. Also, don't forget that 21.5% of your bill is VAT. So your solicitor charged you around 24k which is about 2% of the estate. You also mentioned that your solicitor dealt with things quickly which is a good thing.

I often think solicitors are their own worst enemies, as we can be very bad at communicating the work we do to our clients. They tend to be there for the beginning and the end and never hear about the problems and issue we encounter and deal with in the middle.

Having said all that, clearly your solicitor should have told you in advance what the fees were likely to be. I strongly advise you to ask your solicitor for a meeting to discuss the bill. Just call him/her up, explain that you were surprised by the amount, and that you would like an opportunity to discuss the work carried out in more detail. You might find that you are satisfied that the fee is reasonable after that meeting, or you may wish to dispute it. Either way you will at least have the information you need to make a judgement about the situation.

Just to mention also that insurance costs for solicitors dealing with probate tend to be quite high, as these files are the files that are most often the subject of future litigation (i.e. people who think they should have inherited get ****ed off and sue their siblings,neighbours, aunts uncles etc) so this cost is also reflected in the fees.

Good luck,

Kate.

 

[trev]

Hi Clare & others.

First time poster, but felt compelled to register as I am in an almost identical situation.

My brother and I recently came into an inheritance from an uncle. Both of us and my father are executors. Small rural town solicitor held the will. I use a different solicitor myself and did not realise that we had a choice to use another solicitor, I thought he automatically did it. Valuation of the estate is approx €1.3m mostly made up of farm land and about €100k cash.

First visit to see what the story was and he put various forms in front of us, sign here and here etc. No mention of the extent of the process or his fees.

I didn't particulary trust him and wanted to get my own tax advice from my own accountant before initiating the probate process, only returning to sign the various forms when I got some good advice (which will save me a lot of money).

We filled the forms, everything was eminently straightforward, deeds and title ok, no complicated subdivisions, farm in two folios, one each, nothing complicated at all. As set out above he did not even give us tax advice. Foolishly I assumed the fees would be a few thousand at most.

When probate came through I called solicitor and asked him to send a summary of all the figures to my accountant to allow him to do the Inheritance Tax Return. My accountant called me to point out that solicitor had listed a figure of €35,000 for Administration of Estate and wondered if I knew what is was?

I called the solicitor and asked for an explanation of what this figure consisted of, thinking maybe it included other costs I was unaware of, or maybe he had included funeral costs or something.

I got a 1 page break down yesterday, stapled to a compliments slip, outlining the following justification of professional fees.

"Costs as per recommended scale of the Law Society
3.5% on first €12,700
3% on next €25,400
2.5% on balance

Together with Searches, Commissioner Fees, Probate and PRAI Fee and VAT this gave him a figure of over €43,000!!!!!!!

The last line of the 1 page statement says "We will accept €35,000"

I am outraged and still too angry to know what the hell to do about this. Sorry for the long post but would appreciate comment/advise and very interested to hear how Clare fares with here case.

Thanks again.

T

 

[MOB]

The 'recommended' scale has not been recommended for over 15 years. Even then, it was no more than a guidance based on a survey of fees around the country. ven when the 'scale' was in common use, in many parts of the country, it was normal to charge just 1% on farmland and the so-called 'scale' on the balance.

I cannot say that this probate was utterly straightforward; However, if it was, there is certainly scope for charging a lower fee than €35k.

 

[Kate10]

Hi trev,

It sounds to me like the fee is over the top as well. I would write and ask for a detailed bill of costs to be provided, stating that you think the fee is far too high. Once you have the bill of costs you can see if there were any complications you may not be aware of... Sounds excessive though ...

Kate.

 

[Padraigb]

Is there any reason why the fee should be scaled to the value of the estate? An estate worth €300k might involve more work than another worth €2m.

 

[j26]

I have now done a search and found another thread suggesting that 2% is standard! That is still higher than I expected, and even at 2% €30,000 is very high.

1.2m x 2% = 24,000
Plus VAT at 21.5% = approx 6,000

giving a total of about 30,000

 

[baldyman27]

A further query on this. If a will has been made, why is there a need for a solicitor to be so involved? My father recently made a will stating that the family home and 20k are to go to my sister with the balance of the estate to me with both of us named as executors, there is no-one else involved. If there is a comprehensive list of assets less liabilities then surely there is no need for a huge amount of work by a solicitor.

 

[sam h]

Hello, first time posting here.

The will was straightforward, only ourselves and a few other family members involved, and it has been completed fairly quickly with myself and my sister as executors. The solicitor sent out the bill for his fees, and we were gobsmacked to find that it was €30,000!

Can this be right? Is there a guideline figure? I was under the impression that it would be around 1% of the estate, which would be about €12,000. I didn't expect €30,000 at all.

Can anyone advise?

I think your problem is that the time for negotiation is before the work is done, it's very hard to do it in hindsight.

I did probate a few years ago. Like you, I did all the donkey work - getting valuations, statements of affairs etc (the solicitor told me to). That part took a fair while.

I did some research as to what would have to be done then & realised the rest was a form to be filled in, a meeting with the probate office & a trip to revenue. In total, maybe one full days work - this was the part the solicitor was going to do & charge me close to €40,000 for!!

I would say, if an estate is complex or there is likely to be any hassle from family members, you should go to a solicitor - but if it is straight forward, it's not too hard & can actually be fairly theraputic.

 

[mathepac]

... If there is a comprehensive list of assets less liabilities then surely there is no need for a huge amount of work by a solicitor.

Agreed and most solicitors who post here seem to agree that in uncomplicated cases there is probably no need for legal expertise or little demanding work for a solicitor. But, what layperson, who probably only faces an executorship or inheritance once in a lifetime, knows enough to figure out which side of the dividing line between routine and complex their particular case lies?

 

[mf1]

Agreed and most solicitors who post here seem to agree that in uncomplicated cases there is probably no need for legal expertise or little demanding work for a solicitor. But, what layperson, who probably only faces an executorship or inheritance once in a lifetime, knows enough to figure out which side of the dividing line between routine and complex their particular case lies?

This is the nub of it. I teach and very often in tutorials the students will ask me something to which I will reply, oh don't worry about that, thats standard! - to which they reply, well you know that but we don't.
A recent Probate in the office was a handwritten will done just days before death with a faulty attestation clause and a number of VERY disappointed beneficiaries - complex or routine?
Or a "straighforward" sale of a property and distribution amongst five where one decides she wants more and tries to blackmail the rest? - complex or routine?
Valuation dates in a stagnant/dropping market? - complex or routine?

mf

 

[Clare]

According to the "legal charges" section on the Law Society's website, there are 2 things that stand out to me.

1 - A solicitor's professional fee must be reasonable for the work they have done.

Surely that would prohibit simply charging a percentage? As someone pointed out earlier, It may take more work to complete a complicated €200k will than a straightforward €2M one. But the beneficiaries of the €2M will will pay a fortune and the €200k beneficiary gets a smaller one? That suggests to me that the fees are not even related to the work done, never mind whether they are reasonable or not. It is just a standard "piece of the pie" based on how much the solicitor thinks we can afford because he knows what we inherited!

2 - When you instruct a solicitor to carry out some work for you, your solicitor is obliged by law to give you information in writing about the legal charges you will incur.

The information you will be given will be as follows: the solicitor’s actual charges, or, where this is not possible or practicable, an estimate of the solicitor’s charges, or, where this is not possible or practicable, the basis on which the solicitor’s charges are to be made.

To me, (and admittedly I'm no legal eagle), this means that he is legally obliged to inform me of the likely fees before proceeding. It says charges that we WILL incur, not have already incurred so does this not mean that the solicitor should have made me aware of this in advance? This seems to be the same in Trev's case, the solicitor asked for a load of forms etc signed without ever giving any indication of the potential fees. My case, and Trev's, seem to be the same as Sam h. A fairly short amount of work, (maybe not just a day but certainly not anything worthy of a €30k bill) and he made no attempt to tell us that we would face a massive fee, or that we could do much of the work ourselves.

Full details from the Law Society here...
[broken link removed]

 

[mathepac]

Good find Clare and I'd love to agree with you, but unfortunately the same document you quote from and link to includes the following -

"How does my solicitor work out my charges?
Your solicitor bases your charges on a number of factors such as:
...

• the value of any transaction that might be involved;

..."
and IMHO the above bullet-point does not seem to preclude the use of a percentage to calculate at least part of the fee...

 

[Clare]

Just another point for Trev, and for general discussion.

Trev's solicitor said that his fees were based on the "recommended scale of the Law Society". What scale? I can't find anything of the sort on their website and like I said, the very notion of using a scale like that is totally contradictory to the notion of fees being "reasonable".

Good find Clare and I'd love to agree with you, but unfortunately the same document you quote from and link to includes the following -

"How does my solicitor work out my charges?
Your solicitor bases your charges on a number of factors such as:


...

• the value of any transaction that might be involved;

..."

and IMHO the above bullet-point does not seem to preclude the use of a percentage to calculate at least part of the fee...

Just spotted that. But there certainly isn't a "scale" on the site anywhere. My main point though remains. How can applying a general scale of 2-3% on the total value of the inheritance be acceptable when it later states that the fee must be reasonable for the work they have done? A standard scaled charge by it's very nature bears no relation to work done as it does not reflect difficulty or the lack therof.

And before you consider any of that it all goes back to the issue that the solicitor is legally obliged to inform us of potential charges before they are incurred. Even if I concede that the fee is "reasonable", and I don't by the way, the solicitor failed in his legal duty to keep us fully informed of potential charges.

 

[paddytt]

I think if you look at other posts, someone said that the "scale" was actually the results of a survey about 15 years ago - so it's not a recommendation, just the average returns from a bunch of solicitors around the country.

We negotiated hard before signing up and saved many 10's of thousands of Euros. 2% would have been €80k, we got it for less than €12k.

Try negotiating hard after the event. Keep saying No, it's too expensive. You've got nothing to lose....

paddy

 

[Bronte]

Anyone who thinks that a solicitor is going to charge the same amount of money on an inheritance for an estate of 200,000 versus 2 million even if the work is equal needs to get their head examined.

The get out clause is 'what is reasonable.' In other words not quantifiable.

The fees being charged to the OP are nothing short of outrageous. Probate work is the most lucrative work for solicitors. The OP's and others only hope now is to negotiate as far downward as possible.

On another point, it is still amazing after all the scandals that clients have apparently no idea of how much they are going to be charged.