Probate and Estate Administration Risk: A Practical Guide for Private-Client Lawyers

Probate and estate administration looks routine until it isn't. A straightforward-seeming instruction can turn into a capacity challenge, a beneficiary dispute, or a fraud investigation almost overnight, and the Solicitors Regulation Authority (SRA) has made clear through its thematic review work that probate is an area it is watching closely. This guide sets out the main risk points private-client lawyers in England and Wales need to manage, from the moment a will is drafted through to final distribution of the estate.

Why the SRA is paying attention to probate

The SRA has carried out thematic reviews specifically focused on probate and estate administration, alongside a wider review of firms' professional obligations. The consistent theme across this work is that firms handling probate matters are not always able to demonstrate robust supervision, up-to-date training, or a documented approach to assessing fee-earner competence for the work they are doing. That matters because probate work combines technical complexity (tax, trusts, succession law) with emotionally sensitive clients and, frequently, significant sums of money passing through a client account. Where supervision is thin, small errors compound into serious ones, and where training records are weak, firms struggle to show a regulator that competence was properly assured in the first place.

For fee-earners and managing partners alike, the practical takeaway is that relying on established habits is not a defence. Firms should be able to point to a clear competence framework, a supervision structure appropriate to the seniority of the person doing the work, and a record of how junior staff are trained and checked before they run probate files with limited oversight.

Verifying will validity and testamentary capacity

Challenges to a will's validity typically turn on one of a small number of issues: lack of testamentary capacity at the time of execution, lack of knowledge and approval of the contents, undue influence, or defective execution. The long-standing capacity test derives from the 1870 case of Banks v Goodfellow, which requires the testator to understand the nature of making a will, the extent of the property being disposed of, and the claims they ought to give effect to, and to be free of any disorder of the mind that would distort those judgments.

Risk is highest where a will is drafted for an elderly or vulnerable client, particularly where there has been a recent diagnosis affecting cognition, a significant change from a previous will, or involvement by a family member who benefits from the new provisions. Good practice includes contemporaneous attendance notes recording the capacity assessment, considering a medical opinion (often referred to as the golden rule for elderly or seriously ill testators), and being alert to who introduced the client and who stands to gain. These records are often the only evidence available years later when a dispute arises, so thoroughness at the point of drafting is a direct control against future litigation risk.

Beneficiary disputes: spotting them early

Contentious probate claims, whether brought under the Inheritance (Provision for Family and Dependants) Act 1975 or arising from disputes over interpretation, validity or the conduct of administration, are increasingly common. Early warning signs include unequal treatment of children without a documented reason, estranged family members, blended families with competing claims, and beneficiaries who were excluded or whose expectations were not managed. Executors and their advisers should communicate proactively with beneficiaries, keep clear records of decisions and the reasoning behind them, and take advice promptly where a dispute looks likely rather than waiting for a claim to be issued. Firms advising executors also need to be alert to conflicts of interest where the same firm has historically advised both the deceased and a beneficiary with an adverse interest.

Executor duties and personal liability

Executors owe fiduciary duties to the estate and its beneficiaries, and can be held personally liable for losses caused by breach of those duties, including distributing assets before settling debts or tax, failing to identify all beneficiaries, or acting negligently in managing estate assets. Lawyers acting for executors, or acting as professional executors themselves, should ensure statutory notices under section 27 of the Trustee Act 1925 are considered to protect against unknown claims, that searches are carried out where missing beneficiaries or unknown creditors are a realistic possibility, and that executors understand the significance of signing the Inheritance Tax account and the estate accounts before final distribution. Where an executor is inexperienced or reluctant, clear written advice at each key decision point reduces both the executor's exposure and the firm's own risk of a complaint.

Estate account accuracy

Estate accounts need to reconcile precisely: assets collected, liabilities and expenses paid, tax accounted for, and the residue correctly calculated and distributed according to the will or intestacy rules. Errors here are not just administrative, they can trigger beneficiary complaints, professional negligence claims, and SRA scrutiny of how client money was handled. Firms should apply the same rigour to probate client accounts as to any other client money, with regular reconciliation and a second reviewer checking the final distribution calculation before funds go out. This overlaps directly with a firm's obligations under the SRA Accounts Rules, covered in more depth in Learnsignal's guide to client money controls under the SRA Accounts Rules.

Inheritance tax reporting deadlines

Inheritance Tax (IHT) timelines are unforgiving. In broad terms, HM Revenue and Customs expects the estate's IHT position to be reported within six months of the end of the month in which the person died, and any tax due is generally payable before the grant of probate can be obtained in most taxable estates, with interest starting to accrue on unpaid tax after that point. Thresholds such as the nil-rate band and residence nil-rate band, and the detailed rules on excepted estates, instalment options and reliefs, are updated periodically, so practitioners should always confirm the current figures and forms directly on gov.uk or in HMRC's Inheritance Tax manual before relying on them in a client matter rather than working from memory or older precedent.

Fraud and impersonation risk in probate

Probate transactions are an attractive target for fraud, and both the SRA and the Law Society have repeatedly warned about scams involving bogus law firms, cloned websites, and individuals impersonating genuine solicitors or clients to redirect estate funds or obtain a grant fraudulently. Common patterns include fraudsters claiming to be an executor or beneficiary using forged identification, impersonation scams targeting elderly clients under the guise of a family friend, and payment diversion fraud where fraudsters intercept correspondence and provide altered bank details for the final distribution. Robust identity verification at the outset, independently sourced contact details for all parties rather than relying solely on details supplied by the person you are verifying, and a strict process for verifying any change of bank account details before releasing funds are essential controls. These risks sit alongside wider due diligence obligations, discussed further in Learnsignal's guide to source of funds and wealth checks for legal practitioners.

Building risk awareness into your practice

None of these risks are eliminated by a single checklist. They require an ongoing culture of vigilance, proper file supervision, and regular training that keeps pace with regulatory expectations and known fraud patterns. Structured continuing professional development is one of the most effective ways private-client teams keep this knowledge current across the firm, not just with the most senior fee-earner.

Frequently asked questions

What is the golden rule in probate practice?

It is the recommended, though not legally mandatory, practice of obtaining a contemporaneous medical opinion on testamentary capacity when preparing a will for an elderly or seriously ill client, to provide evidence that capacity was properly assessed if the will is later challenged.

Can an executor be personally liable for mistakes in estate administration?

Yes. Executors owe fiduciary duties and can face personal liability for losses caused by breaches such as distributing assets before settling known debts or tax liabilities, or failing to take reasonable steps to identify beneficiaries and creditors.

How quickly does inheritance tax need to be reported and paid?

As a general rule, the estate's Inheritance Tax position should be reported within six months of the end of the month of death, with tax normally due before a grant of probate is issued for most taxable estates. Because thresholds, reliefs and exact deadlines can change, always confirm the current position on gov.uk or HMRC's Inheritance Tax manual for the specific estate.

What should firms do to reduce probate fraud risk?

Verify identities independently rather than relying on documents or contact details supplied by the person being verified, confirm any change of bank details through a separate, trusted channel before releasing funds, and train staff to recognise common impersonation and payment diversion patterns.

Probate risk is manageable with the right processes, supervision and training in place, and staying current on SRA expectations and HMRC deadlines is a core part of that. Explore Learnsignal's CPD courses to keep your private-client team's knowledge up to date.