Summary 12

Summary 12

Area of law: Wills and probate

Complaint reason(s): Conduct; costs excessive; cost information deficient

Remedy: £100 compensation to each complainant; to provide a written explanation and audit trail relating to Inheritance Tax

Outcome: Ombudsman decision accepted by complainant

Mrs N and Mrs J were beneficiaries of their late mother’s estate and the firm were acting as executor. The administration got off to a bumpy start when the Grant of Probate was issued with an error in the value of the estate. The value stated on the Grant was almost double the true value of the estate.

This didn’t prevent the administration from continuing and the following month the firm made a payment to HM Revenue and Customs for the Inheritance Tax due on the estate. They then made substantial interim distributions to Mrs N and Mrs J.

When the Revenue and Customs wrote to the firm again, they provided a final calculation of the Inheritance Tax due and the firm paid the outstanding balance immediately. They then went on to finish the administration and complete the estate accounts. All that remained was the final distributions under the will to Mrs N and Mrs J.

Before making these final payments, the firm asked Mrs N and Mrs J to sign a deed that officially discharged the firm from any further responsibility as executor. Mrs N and Mrs J didn’t understand why they needed to sign something to get the money due to them. They were very concerned about potential future tax liabilities. The firm insisted that the deed needed to be signed.

After Mrs N and Mrs J complained, the firm contacted the Probate Registry to try and rectify the error on the Grant of Probate. They were told, since the error had not had any effect on the administration, that the figure could not be amended.

We concluded that it was reasonable for the firm to ask for a deed of indemnity to be signed, but as it was clear that Mrs N and Mrs J were concerned about this, that it would have been reasonable for the firm to explore these concerns and explain the tax situation to Mrs N and Mrs J. The ombudsman decided that the firm should provide Mrs N and Mrs J with an explanation about the tax processes and compensation of £100 each to recognise the concern they had experienced.