Wednesday, 12 January 2011

YOU PAY THE PIPER, YOU CALL THE TUNE part 2

A modern approach
It’s straightforward enough to establish the composition of the estate – a face-to-face conversation with properly briefed executors and / or family of the deceased will reveal the work necessary to administer the estate from top to bottom and give the service provider enough information to price the assignment accurately. Where possible, the discussion can take place on the phone, which ought to keep the cost down. In any event, the quotation will include the service provider’s professional fee for dealing with each discrete task, VAT on the fee and the cost of any disbursements (obvious ones being the Court fee and office copies of the grant).
Swings and roundabouts - blind pricing
Experience shows that some service providers will apparently happily price the administration of a particular estate without knowing what and how much work will be necessary to administer it. Some service providers may take the view that as long as what is lost on the swings is more than recouped on the roundabouts and a profit is made overall, everybody will be happy. However, is it fair that the roundabouter, who has paid too much for estate administration should subsidise not only the service provider’s business model but also the swinger, who has paid too little?
In practice, the prices offered in such blind pricing tend not to be fully inclusive: they are unlikely to include VAT on the fee, charges for dealing with anything remotely out of the ordinary (e.g. the gathering in and sale of overseas assets, setting up of trusts contained in the will etc) and any third party costs.
Timescale
Very few service providers will commit firmly to a fixed end-date for the administration of anything but the most straightforward estate. As a rule it is very difficult to predict how long some tasks will take to complete. Some providers, however, will agree to a clause in their terms of engagement such that they will refund a certain amount of their fee for every month by which they exceed the end date agreed at the point of their taking instructions.
Advice to the consumer
Here are some tips for the consumer:
• Remember – YOU call the tune
• Estate administration can be complex – find a service provider you like and trust
• Shop around – but be wary of hourly rates and / or fees based on the value of the estate or parts of it (e.g. the deceased’s home)
• Ask for a fixed fee quotation, not estimate
• Ask what the price you’ve been given excludes – if the fee you’ve been given is truly fixed and transparent, the correct answer will be “Nothing”
• Look for as firm a commitment as possible to completing the administration within a given timeframe
And finally, to quote Yogi Berra:
• “Always go to other people's funerals, otherwise they won't go to yours.”

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