Your probate options
Option 1: Do it Yourself
Some people assume that a solicitor or trustee company that is holding a Will that appoints you as executor has the right to apply for probate.
The benefits of "Self-Help"
- you save thousands in lawyer fees or commissions
- you can usually get Probate in the shortest time, and
- your inheritance stays under your personal control the whole time, and you usually get access to it much more quickly. (and you avoid fights about commission with trustee companies).
Option 2: Pay a Solicitor
Lawyers (solicitors) have two fees:
- FEE 1 is to prepare the application for Probate and lodge it at the Probate Office. The price rises with the value of the estate, and is typically a few thousand dollars.
- FEE 2 is to arrange to get assets released and then distribute them to beneficiaries. This fee is based on each "item" of work, and it varies widely, but is usually thousands of dollars.
If the lawyer also acts as an executor, they might also be entitled to claim "executor's commission" of 3% to 5% of the estate.
Unexpected Costs: There might be another cost in getting a lawyer to apply for probate, although it is hidden from view - it is the cost of losing the interest on your inheritance before it is distributed (for perhaps 6 months or more. From about 2018 on, interest rates were so low that this was not a big factor).
Delay in getting your inheritance might also cost you in other ways. See this report of the Law Reform Commission for some clues on the problems executors can face when dealing with solicitors.
Option 3: Pay a Trustee Company
Employing trustee companies is a very effective way of losing a big slice of your inheritance, because trustee companies typically take 5% of the value of the estate
- Plus GST
- Plus lawyer fees
- Plus other expenses.
A quick calculation says it all: 5% of a million dollar estate is $50,000 - for something you can easily do yourself.
You would need a really compelling reason to choose a trustee company (including State Trustees) as a method of getting probate.
Some people accept "make-your-will" offers by trustee companies without realizing:
- that their family will probably lose all control over the administration of the estate, and
- how much of their estate will end up in the trustee company's pocket - eg 5% of $1m = $50,000.
Some beneficiaries feel that they have to employ the trustee company that prepared the Will because in the Will the trustee company appointed themselves as executor (a practice that should be banned). We have heard of cases though where the trustee company agreed to family requests that they do not act as executor. In such cases the trustee company formally "renounces" the right to apply and provides the necessary renunciation paperwork for your application.
The Public Trustee?
Some Victorians remember that there was once a government owned body called the "Public Trustee", whose purpose was to help poor people who could not afford funeral and probate related fees. But Victoria privatised the Public Trustee, so that it became State Trustees - by far the most expensive probate option.
Our Probate Recommendation
We recommend that you apply for Probate yourself (of course!) because:
- You save thousands of dollars in lawyer fees
- Even if you employ a lawyer you usuallly end up doing the most time-consuming task anyway - that is - digging out details of assets and debts
- Applying for probate yourself is actually the quickest way. (You have only one application on your plate - your own - so it gets your 100% attention). You can usually have your application lodged in a few weeks.
- Assets get released direct to you (or as you direct) - not held in someone else's trust account, from which it might take time to get released to beneficiaries.