I recently read an article which suggested that “people in control of their finances tend to live longer (and happier) lives”. I cannot provide empiri...
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June 1, 2017
One subject which I have touched upon previously in relation to Lasting Powers of Attorney (LPAs) and Self Assessment tax returns is that of professional fees, and if you read to the end of this article, you and/or your friends and family might potentially end up saving a lot of money.
People normally accept that fees are an inevitable fact of life when obtaining legal or financial advice without necessarily asking themselves whether they can do things more cheaply without compromising the quality of the service which they are receiving. When I wrote about LPAs, I pointed out that solicitors typically charge £500 plus VAT for drawing one up, even though it is relatively easy to do it yourself. I have also written about the disproportionate fees charged by some accountants for completing simple tax returns.
However, fees can take on a totally different dimension if you are getting divorced or administering the estate of a deceased person. In respect of matrimonial disputes, the solicitor may be charging in excess of £500 per hour, whilst the fee for administering an estate may be a percentage figure based on the aggregate value of the estate in question. It is little wonder then that the final bills in these situations often end up being tens of thousands of pounds.
Having recently helped to administer the estate of my late-mother, I am able to say that, in her case, it was a straightforward exercise, which did not require the services of a solicitor, and only cost £215, which was the requisite fee in respect of the probate application. The most difficult part was ascertaining which forms needed to be completed!
I think that it would be fair to say that people often seek legal advice when they are at their most vulnerable, for example, when they have suffered a bereavement or matrimonial breakdown. Owing to the associated emotional stress, as well as the fact that they may not be familiar with the legal processes involved, they may take what they later regard as irrational decisions and ultimately pay far more than they needed.
Whilst I am not pretending that I can replace solicitors altogether, particularly when it comes to interpreting the law, I believe that, in most cases, I can help my clients to reduce substantially their legal bills by, for example, helping them to complete their Form E if they are getting divorced or the PA1 and relevant Inheritance Tax (IHT) forms if they are acting as an executor. My fees pale into insignificance when compared to those of solicitors.
Another particularly topical area where fees are concerned is in respect of pension transfers. Anybody considering leaving a defined benefit (DB) scheme is required to take appropriate independent advice, which incidentally I am unable to offer, the cost of which varies tremendously. It cost me £495, but I was quoted £13,500 by Hargreaves Lansdown.