The administration of an estate can range from relatively straightforward to highly complex. While some matters involve a simple estate with limited assets and no disputes, others require extensive legal work involving tax issues, property sales, or disagreements between family members.

For both solicitors and litigants in person, one of the most common questions is how legal costs in administration of an estate are calculated, managed, and recovered.

At ARC Costs, we regularly advise on legal costs arising from estate administration, including disputes over fees, recoverability, and the assessment of costs. Understanding what work is required, and how those costs are structured, is essential for avoiding unnecessary disputes later.

What does it mean to administer an estate?

To administer an estate means dealing with the affairs of a person following their death.

This typically includes:

• Identifying the assets and liabilities of the estate
• Applying for the grant of representation
• Paying debts and liabilities
• Completing tax obligations
• Managing the collection and distribution of assets
• Final distribution to the residuary beneficiaries

The complexity of the work will depend on the nature of the estate, the number of beneficiaries involved, and whether disputes arise.

The role of the grant of representation

A key stage in most estates is obtaining authority to deal with the deceased’s assets. Where there is a valid will, this usually involves obtaining the grant of probate. Where there is no will, an administrator may instead apply for letters of administration.

Collectively, these are referred to as a grant of representation.

The process includes:

• Valuing the estate as at the date of death
• Preparing inheritance tax forms
• Making an application to the probate registry
• Providing supporting documentation

Without the grant, it is often impossible to deal with property, bank accounts, or investments forming part of the estate.

What legal costs arise during estate administration?

The legal costs involved in estate administration depend largely on the complexity of the work required. For a simple estate, costs may be relatively modest. However, more complicated estates can involve substantial time and expense.

Common areas generating legal costs include:

• Identifying and valuing the assets of the estate
• Preparing inheritance and income tax documentation
• Drafting and preparing estate accounts
• Dealing with HMRC correspondence
• Handling the sale or transfer of property
• Managing disputes or claims against the estate

There may also be costs payable to third parties, including:

• Probate court fees
• Valuation fees
• Barrister or accountant fees
• Land Registry charges
• Search fees

In some estates, additional searches may also be required, including bankruptcy only land charges department searches for beneficiaries or personal representatives.

Who pays the legal costs in administration of an estate?

In many cases, the legal costs of administering an estate are paid from the estate itself rather than personally by the executor or administrator. This is because the work carried out is generally for the benefit of the estate and the beneficiaries as a whole.

Typical costs paid from the estate may include:

• Legal fees for obtaining the grant of representation
• Costs associated with collecting and distributing assets
• Fees for preparing estate accounts and tax documentation
• Probate application fees and other court fees
• Professional fees payable to accountants, valuers, or other third parties

However, problems can arise where disputes develop.

If there are disputes between beneficiaries, or if a personal representative acts unreasonably, the court may decide that certain legal costs should be paid personally rather than from the estate.

For example, where unnecessary litigation is pursued, excessive costs are incurred, or the administration has been mishandled, the court may refuse to allow some or all of the costs from the estate assets.

This is why proportionality and proper record keeping remain important throughout the administration process.

Fixed fees or hourly rates?

Many firms offer estate administration services using either fixed fees or an hourly rate charging structure. For straightforward estates, fixed fees can provide clarity and predictability. However, where the estate is more complex, charging on an hourly basis may be more appropriate.

This is particularly relevant where there are:

• Numerous assets
• Foreign property or investments
• Significant tax issues
• Multiple beneficiaries
• Disputes between family members

The key issue is ensuring that clients understand how fees are calculated and what work is included.

Clear communication at the outset significantly reduces the risk of disputes later.

Tax work and estate administration

Tax obligations are a major component of many estate administrations.

This may involve:

• Inheritance tax calculations
• Estate income tax returns
• Capital gains tax issues
• Ongoing tax returns during administration

The complexity of this work depends on the nature of the estate and whether assets continue generating income during the administration period. Where specialist tax advice is required, additional costs may arise from accountants or tax advisers instructed to assist.

Collection and distribution of estate assets

Once the grant of representation has been obtained, the focus shifts to the collection and distribution of the estate.

This may involve:

• Closing bank accounts
• Selling or transferring property
• Realising investments
• Paying liabilities and creditors
• Distributing funds to beneficiaries

The process can become significantly more complicated where there are multiple beneficiaries, disputes over entitlement, or delays in selling assets.

Property transactions in particular often increase the amount of legal work required, especially where there is a sale or transfer involving complex ownership arrangements.

Preparing estate accounts

An important part of the administration process is preparing estate accounts.

These accounts provide a full record of:

• The assets and liabilities at the date of death
• Money received during administration
• Payments made from the estate
• Costs incurred
• Final balances for distribution

Estate accounts are particularly important where there are multiple beneficiaries or concerns about how the estate has been managed.

Poorly prepared accounts often lead to disputes.

Disputes between beneficiaries

One of the most significant drivers of legal costs is disputes between beneficiaries.

These disputes may involve:

• Allegations that the estate has been mismanaged
• Challenges to the level of legal fees charged
• Arguments over distributions
• Concerns about delays
• Disagreements regarding property or valuations

Where disputes arise, costs can escalate quickly. What may have started as routine estate administration can become contentious litigation involving detailed scrutiny of the work undertaken and the costs incurred. This is often where specialist legal costs advice becomes important.

Legal costs and proportionality

Even where legal work is necessary, the costs incurred must still be proportionate to the estate.

The court may consider:

• The size and complexity of the estate
• The conduct of the parties
• Whether the work undertaken was necessary
• Whether the level of fees charged was reasonable

This applies both to solicitors acting in estate administration and to disputes involving the assessment of costs. Clear retainers, accurate time recording, and detailed explanations of the work undertaken are essential.

How ARC Costs can assist

At ARC Costs, we assist solicitors and private clients with disputes and issues relating to legal costs in administration of an estate.

Our work includes:

• Advising on recoverability of estate administration costs
• Reviewing legal fees and retainers
• Assisting with disputes involving beneficiaries
• Preparing and challenging Bills of Costs
• Supporting solicitor-client assessments and detailed assessment proceedings

We understand the complexities that can arise during estate administration, particularly where estates become contentious or involve substantial assets.

Our approach is focused on ensuring that legal costs are properly justified, proportionate, and recoverable where appropriate.

Need advice on legal costs in administration of an estate?

Whether you are a solicitor managing a complex estate or a litigant in person concerned about legal fees, specialist costs advice can help avoid unnecessary disputes and protect your position.

At ARC Costs, we provide practical advice on estate-related legal costs, from initial retainers through to formal costs disputes and assessment proceedings. Our costs draftsmen and costs lawyers regularly assist private client solicitors and litigants in persons in legal costs recovery.

To speak to a member of the team, feel free to give us a call on 01204 397302 or send an email to info@arccosts.co.uk.

Follow Us