administration of estate

Background: Hubby is named as the sole executor of his mother's will and trustee of her estate (she recently died in a nursing home). The estate will be divided into 4 equal parts: one to hubby, one to his sister, one to his brother, one to 5 named charities/organisations. The will was prepared by a local firm of solicitors (employed by the deceased) and the original has been kept there (we only have certified copies). The will included an end para which said the deceased "direct the trustees to employ (the solicitor firm) in connection with the administration of the estate".
We understand after the funeral, we must wait for the death certificate, then apply for Grant of Probate, before the administration of the will (ie distribute the estate). The estate comprises 2 bank accounts in the deceased name, a house (deceased's home before moving into the nursing home, been lived in by hubby's brother) and the refundable deposit from the nursing home. No share (it was sold while deceased living in nursing home - used as part nursing home deposit).
Question:
If the will made a specific requirement that the executor / trustees of the estate to use a particular solicitor firm in the administration of the estate, then does this mean absolutely that the executor must use that firm to do the probate and distribution of the estate? Or, can the executor use different legal firms to do the probate and the administration of the estate?
Reason for asking, how do we know the firm selected by the deceased does not overcharge in their fees? We have seen a number of organisations advertise online for doing the grant of probate, and the administration of the estate after probate is granted. Is it advisable to use one of those "online" firms?
Where can we find out how much to expect to pay for doing the grant of probate? And the costs charged by legal firms for the administration of the estate (separately from the grant of probate)? Hubby thinks he can do the administration himself - however, since there are third parties involved (the 5 charities) he may want to get it done by a legal firm. We read somewhere that these firms charge a % of the estate (in this case the estate is estimated to be in the range of $500K to $1M).
Appreciate any comment on this.

 

Ask the solicitor nominated for a fee proposal, shop around with a few others then negotiate with them.

 

Quote ..
Hubby thinks he can do the administration himself - however, since there are third parties involved (the 5 charities) ..


You would want to hope all the people--and the charities --third parties are on the same page ,otherwise this could turn into a legal very costly nightmare..

 

It's the Executor's decision. One can only hope the person is fully aware of the legalities involved and not simply trying to save a couple of bucks.

 

The use of a particular solicitor is not binding on the executors.
Solicitors cannot charge a % of the estate and solicitors should enter costs agreements with clients so you will know what their fees will be.

Keep in mind that the nominated solicitor may be familiar with the affairs of the deceased.

 

I think that your hubby should bear in mind these points when considering whether or not to hire a lawyer:

1) This is not a "very simple" estate. It's not overly-complicated, either, and shouldn't cost tremendously much to administer, but it's not one where you'd say "absolutely, go ahead, probably doesn't need a lawyer's involvement". (Those are ones where perhaps there's no real property and a couple of bank accounts in the same state with a few $K. Yes, there are a significant number of Aussies who die in such circumstances - bearing in mind super [usually] and jointly owned property, doesn't form part of the estate.)

2) If he makes an error, he can be personally sued.

3) Yes, the charities will almost certainly insist that a lawyer is involved, and they can be quite aggressive in pursuing their rights under wills.

4) If he does make an error, the fact that he tried to do it himself in light of the fact that the testator a) directed him to use a lawyer, and b) provided funds to pay for the lawyer, will make the court less likely to view any error sympathetically.

5) As executor, your husband has a fiduciary duty to put the interests of the estate above his own. It's an extremely high standard of care owed, and very difficult to do when you're grieving, and you're a beneficiary, and your siblings are also beneficiaries. The involvement of an emotionally-detached professional who's done this many times before can pay for itself many times over.

Good luck. x

 

If your mum has vetted and then chosen a particular law firm and left you a directive to use them: it might be worthwhile to talk to them about their value proposition.

Most professionals are interested in helping people. The ones who are simply in it to rip you off are quite transparent.

 

Thanks, Scott No Mates. We will ask the nominated solicitor for a fee proposal. Hubby has spoken to them briefly on the phone but they sounded a bit cagey. We will probably end up going with them (in accordance with the deceased's wish) but we want to make sure their fees are not outrageous. We will shop around to get an idea on the fees and negotiate - as you have suggested.

 

Thanks, willair. Since there are 3rd parties involved (the charities) we want to ensure they do not cause any problem and things to be done properly. Hence, hubby prefers to employ a legal firm to administer the estate. I am a bit weary of charities ... and prefer to donate money to them while I am alive, and not in my will (just personal opinion)

 

Thanks, SatayKing, we are not trying to save the money. [we have no interest in the getting $ from the estate - in fact, hubby will give all his share to his brother to buy a house - brother has no house and been living in deceased's house. we are comfortably off and do not want the share of the estate. hubby told his mother while she was alive that he would not care if she left her money to the other 2 children and to charities.] Hubby is an honorable person and will do the right and proper things. We want to understand the process and what he can / should do so that no one named in the will can lay the blame.

 

Thanks, Terry_w. It is good to know that the use of a particular solicitor is not binding on the executors. I was concerned that if it was specified in the will, then we would have to follow it. Hubby thought that we would have no choice in the matter. We will certainly ask them to quote before doing the work on the estate. They don't really know much about the estate - we do, well all the children of the deceased do. We keep them in the loop so they all know - we have records and documents.

 

Thanks, Perp. Agree with most of your points.

The deceased was one of the few lucky retirees who had a defined benefit superannuation pension. So, no super fund. The family have notified state super to stop the pension on the day of death. The only property is the house and it is in the name of the deceased. Because of the above pension, the deceased did not have to sell the house when moved into the nursing home. Cash from selling a unit (before moving into nursing home) and term deposits formed the refundable bond required by the nursing home. Thankfully the deceased pension paid for the daily costs at the nursing home.

I am fully aware of the potential problems with the charities. This is why hubby wanted to use the services of a legal firm. His siblings understand their shares in the estate. Although hubby has a share in the estate, the $ will not come to us as hubby has promised to give it to his brother to buy a place to live (this is another topic which I will post for questions later). Hubby wants to do things properly and in accordance with the will, so the use of a legal firm is inevitable. We do not benefit anything from the estate.

 

Thanks, Ross Forrester. You are right that the deceased clearly stated in the will that the executor / trustee of the estate to use a particular legal firm (the one who did the will). Hubby has spoken briefly to them but he said they were very cagey. As others have suggested, we will get quotes from other firms as a basis for negotiation.

 

Guess who drafted the will ??? Its the worlds oldest referral scam. And then the solicitor explains the Law Society scheduled fee for a deceased estate. Its gold plated. AMP couldnt devise a better way to make money.

 

Absolutely agree with you Paul@PFI. The will was done by the deceased and we have to follow the deceased's wishes.
However, there was a twist in this. The will was drafted by one law firm (say X), but when hubby contacted them about it. They said the deceased had moved the business / the will to another law firm (say Y, closer to the deceased's house) and the original will has been with that local law firm Y. Hubby phoned them and they have confirmed this - Y has the original will.
I am still puzzled, the will is no longer with the original law firm X, and the will still stated that the deceased "direct" the trustees of the estate (executor) to use their services in the administration of the estate, the question remains: Does the executor have to use X? Does the executor have to use Y? Or the executor can use any law firm for assistance in probate and distribution of estate?
Hubby has asked Y about their services but they were reluctant to discuss much more until after the death certificate is received. Funeral was held this week and we were told the funeral director would have the death certificate in a few weeks.

 

No
No
Yes

 

Terry - I believe that a executor can seek to use any competent professional to assist them to discharge their legal and tax obligations and have a right for this to be paid by the estate.

Would the reasonableness test for that ultimately rest with the courts if a beneficiary contested the use of the trust assets ?

 

Do the costs of use of professional in the Grant of Probate and administration of the estate come out of the estate? The siblings are not likely to contest, but the 5 charities may cause some problem.

 

Yes they could use anyone that is licenced. The will likely authorises costs to be incurred with the administration

 

Have read an article which supported Terry_w's view that we do not have to use the original law firm who did the Will (they have become a large firm now, being acquired by another bigger firm), or the law firm holding the Will.

We have asked the law firm holding the original Will of MIL to quote on both Grant of Probate and distribution of estate. We need to get another quote for completeness and comparison. Have found on the internet a few probate firms (like online conveyancing firms) advertising their services. I am still not sure about using these online firms. Would anyone like to comment on these online firms? Would like to get some recommendations of legal firms whom you have used in wills and estate - in NSW, Newcastle area but this is not essential.

Many thanks in advance.