The benefits of probate accreditation
This section looks at the opportunity probate presents and what you should consider before applying.
Probate work therefore offers your firm a real business opportunity to provide a cradle-to-grave service to your clients. Combining estate administration and probate enables you to provide a one-stop-shop for your business advisory services as probate is a natural adjunct to your private client work.
Even if you do not already do this kind of work, the question is: could you, and is there a market for it? Intergenerational wealth transfers are rising substantially, and with them comes an increase in the numbers of people seeking advice in these areas. This probate in numbers infographic gives an idea of the current size of the probate market.
ICAEW can also license your firm as an Alternative Business Structure (ABS). This means you can bring together solicitors and non-legal professionals to develop a whole host of other legal services on the coattails of probate, opening up all sorts of opportunities for expansion and modernisation.
What should you consider before applying to provide probate?
This section looks at what you should take into account before planning to expand into this area.
Appraising whether probate is right for your firm is very much an individual decision based on your client base, your staff and the other services you provide. Initial factors to consider include existing work, client profiles and staffing capabilities. Preparing properly is the key to extending your business in any new direction, and probate is no exception. Thorough research is essential, as is putting together a solid business plan.
If you decide to proceed, work out beforehand how you plan to promote and market your probate services. New work will come slowly unless there is a solid marketing strategy to make clients aware of this service offering. Most people still think that probate can only be done by lawyers and banks: it is important to get the message out to your target market that this service is now part of your portfolio and that your firm can provide value in this area. See making the most of your probate licence for further marketing support.
Our members’ experience suggests that once clients are made aware of the service, the work will come. A recent survey of ICAEW probate-accredited firms conducted by SWAT found that 66% of firms had worked on six or more probate cases in the first 12 months after accreditation.
The circumstances of probate make it very different from the types of services accountancy practices are used to. As you will be dealing with families at a very emotional and difficult time, empathy is essential, as is the ability to deal with vulnerable clients. But while being empathetic you will also need to maintain professional scepticism, as a death can bring unscrupulous suppliers and spurious claimants to your door.
What specific factors are there?Some of the specific areas you should consider before deciding whether or not to offer probate include:
1. Training and licensing
Firms will need to make an upfront investment of time and money in getting individuals trained and applying for accreditation. Once the firm is accredited, accredited individuals will need regular and ongoing training and updates.
2. Working capital lock-up
It takes an average of about six months for probate to be granted on most estates. The probate practitioner’s fees will be settled out of estate proceeds available after probate has been granted, so this can mean funding payroll and any other costs (such as systems, software and fees) before fees start flowing through to your practice.
3. Professional indemnity insurance
- There is a minimum PII requirement of £500,000 for probate and estate management work. You should discuss your cover with your insurers to ensure these activities are covered by their existing policies; if not it may be possible to arrange an extension of cover at this limit in connection with probate or estate administration work.
4. Building up a client base
- Ensure your current clients are aware of how you can help them. A number of practitioners have found advising on inheritance tax or a client’s will are good ways of extending client relationships and generating probate work.
5. Investigate potential third-party relationships
- If you intend to provide a service in which you will be responsible for storing, valuing and selling assets you will need to associate yourself with third parties you might not have used before. These can include valuers, storage facilities for high-value and high-risk items, antique dealers and insurance agents.
What about existing relationships with solicitors?
The ongoing blurring in distinction between services that can be provided by accountants and solicitors means both sets of professionals are undertaking services that the other used to provide exclusively. It is important to continue to maintain good relationships with local firms of solicitors as there will be occasions when both parties will need to refer work to the other.
Are there any limits to the probate service that member firms can offer?
ICAEW regulated practices are not allowed to conduct contentious probate. If there is a dispute in a probate assignment you have taken on, then that assignment must be passed on to a specialist probate lawyer. Once the point of contention is settled then the probate application can revert to your practice.