The Ultimate Guide to Probate
The probate process can be complex. Our Ultimate Guide To Probate breaks down each step, so you can be sure to protect your interests.
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When a person dies, they leave behind their estate including any assets, property, money, and other possessions. Before you can manage these matters and deal with any outstanding liabilities you may need to obtain a grant of representation.
In general, the term ‘probate’ covers applying for the Grant of Representation and settling the deceased’s estate by clearing their debts, paying inheritance tax and distributing the remaining assets to the beneficiaries in line with the Will.
Technically, the term probate refers to the legal document known as a Grant of Probate that formally authorises the executor to carry out the instructions detailed in the Will and administer the estate.
Managing the estate is a huge logistical and administrative task. Most people are unaware of the complexity involved until they go through it.
That’s why it is essential to fully understand the procedures involved in probate if you are appointed the executor of the Will, are the next of kin, or are a named beneficiary.
This guide is for anyone whose loved one has recently died and who is responsible for taking care of the estate administration. It will detail the steps involved in the probate process to help you fully understand the legal implications and administrative procedures.
If you are the named executor of the Will, you may have to apply for a Grant of Probate before you are allowed to administer the estate.
A Grant of Probate is a legal document issued by the Probate Registry Office that confirms a Will is genuine and valid, enabling the named executor to deal with the assets in the estate.
Most financial institutions will not allow you to take control of the deceased’s assets until you receive a Grant of Probate.
Whether or not a Grant of Probate is required depends on the value of the assets that make up the estate and the requirements of the financial institutions where those assets are held.
For example, a Grant of Probate will likely be required if the Will contains property or significant assets held solely by the deceased.
If the property was jointly owned, it will automatically pass to the surviving owner if they are joint tenants. In this case, probate would not be required but could still be necessary if other significant assets are in the estate.
For tenants in common, you may need a Grant of Probate because the deceased’s share will not automatically pass to the other person. Their portion of the property forms part of the estate that they can bequeath in the Will.
Where the assets are less than £5,000 or when there is no money left after paying off debts, liabilities and inheritance tax, it is unlikely that probate will be required.
Probate is a crucial part of estate administration and refers to managing someone’s financial and legal affairs after they pass away. It covers a range of activities, from obtaining the Grant of Representation to distributing assets and settling any debts or inheritance tax due.
When a person dies, they leave behind their estate, including assets, property, money and other possessions. Before you can manage these matters and deal with any outstanding liabilities, you may need to obtain a Grant of Representation.
A Grant of Representation is a legal document issued by the Probate Registry Office that legally authorises the personal representative to administer the estate.
Many financial institutions will not allow you to take charge of the deceased’s assets before the Grant of Representation is received or you have ‘got probate.’
If the deceased left a Will and you are named an executor, the Grant of Representation you apply for is called a Grant of Probate. A Grant of Probate confirms the legal validity of the Will, granting you legal authority to take control of assets, property or bank accounts and distribute them according to the Will.
When the deceased did not leave a Will, the person responsible for administering the estate must apply for Letters of Administration before dealing with legal or financial matters.
There is no set time scale in administering an estate; the time taken will depend on the value and complexity of the assets involved. In most cases, the application for probate typically takes around 3–4 months. For straightforward estates, you can expect the whole process to be complete within 12 months.
Often, with more complex estates, probate can be arduous and confusing. There may be a delay in getting probate if the information supplied in your application is incomplete.
That’s why you may consider sharing the responsibility with an expert probate legal team. A specialist probate solicitor can help with applying for the Grant of Probate and guide you efficiently through the process to avoid any unnecessary hold-ups.
The person responsible for managing someone’s estate after death is known as the personal representative. If there’s a Will, the personal representative will be the executor named by the testator. The executor is legally responsible for applying for a Grant of Probate and is obliged to carry out the wishes of the deceased as set out in the Will.
Sometimes, more than one executor is named. These could include a close family relative or a legal specialist with relevant expertise. There’s no limit to the number of named executors in the Will, but only up to 4 executors can deal with a person’s estate at one time.
In cases where there is no Will, the person with the responsibility to administer the estate (administrator) will apply for Letters of Administration.
The role of executor or administrator involves various tasks, including:
It’s essential to fully understand your role as a personal representative, as your actions could have serious legal implications. Executors and administrators owe certain duties to the beneficiaries of the estate. If you fail to comply with your obligations, this could lead to legal action against you. Beneficiaries may attempt to remove you from your role, or you may have to reimburse the estate for losses caused by your actions.
Executors must remain impartial in all dealings with the estate and must never prefer the interest of one beneficiary over another. If there is a conflict and you cannot remain neutral, you must stand down from your duties.
A Will can be contested at any point before or after the probate process. If you’re on notice that a claim may be made against the estate, you should not distribute any of the estate assets. Any loss to the person making the claim could be recovered from you.
A probate solicitor has the experience and expertise to deal with all matters relating to estate administration and can help you save time and avoid making any errors which could delay your Grant of Probate application.
Although you’re not legally obliged to engage a probate solicitor, effectively managing such a complex array of tasks by yourself is probably only possible for simple cases such as small estates with little or no assets to deal with.
The responsibilities of a personal representative are extensive. It is strongly advisable to take legal advice when administering an estate, especially for large or complex estates or in cases where the estate is over inheritance tax thresholds.
A probate solicitor has the experience and expertise to deal with all matters relating to estate administration and can help save you time and avoid making any errors which could delay your Grant of Probate application.
A Grant of Probate won’t be needed in every estate administration case. Whether or not a Grant of Probate is required depends on the value of the assets that make up the estate and the requirements of the financial institutions where those assets are held.
Different financial institutions have their own rules, but most require probate on assets valued over £5,000 but that can increase up to £50,000 for some institutions.
If the Will contains property or significant assets held solely by the deceased a Grant of Probate is probably required. Assets under pension schemes often require a Grant of Representation.
For jointly owned property held as tenants in common, you may need a Grant of Probate because the deceased’s share will not automatically pass to the other owner. The deceased’s portion of the property forms part of their estate that they can bequeath in the Will.
If the value of the estate is small, which at the time of writing is £5000, or when there is no money left after paying off debts, liabilities and inheritance tax probate is not necessary.
There are some exceptions to this. Different banks may impose their own limit on what they consider a low value, and this may be more than £5000 so you might still be free to manage the estate without a Grant of Probate.
If the total of your estate is worth more than £5000, but this is spread across multiple bank accounts and building societies you may not require probate either.
Jointly owned assets with rights of survivorship don’t normally need a Grant of Probate. For example, if the property was jointly owned by a spouse or civil partner. The property will also automatically pass to the surviving owner if they are joint tenants. It is wise to check first. You may be expected to provide other evidence of the entitlement to a bank or land registry.
If you’re in any doubt, a probate solicitor can help you find out when you need to obtain a Grant of Probate.
The cost of probate depends on whether you handle it yourself or engage a specialist probate solicitor.
Handling it yourself is the least expensive option, providing you make no costly mistakes, and you know what you’re doing.
Since Jan 2022, the fee for all Grant of Probate applications in England and Wales is £273 whether you use a probate specialist or do it yourself. The fee covers any processing costs. The government does not make a profit on this.
Extra copies of the Grant cost £1.50. You will need multiple copies to give to different authorities and financial institutions so it’s a good idea to order a few extra.
Engaging a probate specialist is more expensive than doing it yourself, but for more complex estates we would strongly encourage you to consider using an expert even if it’s just for specific elements. Using a probate lawyer will save you time and help to avoid any expensive errors.
Rowlinsons offers a fixed-fee probate service, so you know how much to expect to pay from the outset. The fee will depend on the complexity of the case and the assets involved which is why we offer an initial no-obligation chat before quoting your fee. Get in touch to find out more.
The executor is responsible for paying Inheritance Tax (IHT) on an estate.
The threshold for paying IHT is £325,000. This is known as the nil rate band. If the estate is valued at £325,000 or more, you must pay the standard rate which is 40 per cent of the value over this amount.
You will only be charged at the rate above the threshold, although you may still need to report the estate’s value even if it’s below the nil rate band.
There is no inheritance tax to pay if the value is below the threshold or if you leave everything above the threshold to your spouse, charity, or a community amateur sports club. If you own your house and leave it to your children or grandchildren, your tax-free threshold can increase to £500,000.
It’s important to be aware of the deadline for paying IHT. You must start paying by the end of the 6th month after the date of death and before you start applying for probate. You will need to send the Inheritance Tax forms within a year of the date of death.
This can be difficult with estates that are rich in assets, but cash-poor. If you need help paying Inheritance Tax, there are specific loans available on the market, and you may be able to pay IHT in instalments. Rowlinsons can advise you on the best way to budget for paying Inheritance Tax and other probate expenses.
If you are thinking about planning for your future, Inheritance Tax planning can have a significant impact on the amount of assets your loved ones receive. Rowlinsons offers an Inheritance Tax planning service.
It’s typically fine to remove and sell items from a property if the estate clearly falls beneath the inheritance tax threshold. However, it’s advisable to keep a record of the proceeds of any sale in case there are any questions later or disputes between family members, beneficiaries, or HMRC.
Furthermore, great care must be taken if you’re planning to remove and sell items belonging to the deceased if the estate is close to the inheritance tax threshold.
In this case, an accurate valuation by a professional valuer is critical. This helps identify individual items that may be bequeathed or written in the Will and avoid potential disputes.
It might be tempting to cut corners, but it’s worth being thorough when itemising and valuing any possessions as the executor could receive penalties for negligence. This could lead to a possible investigation and cause lengthy delays.
Once probate is obtained all possessions, property and assets can be distributed per the instructions in the Will.
Any assets over £5,000 may be subject to probate. These include:
Before obtaining probate, you need to accurately determine the value of the estate, so you know how much inheritance tax to pay. Valuing an estate may take several months or more for complex estates.
The first step is identifying the deceased’s assets and debts, including property, investments, savings, mortgages, and loans. You will need to make a list of all the assets, including any joint assets.
Find out which organisations, banks or building societies you need to contact and write and ask for the value of the assets or debt.
You may need to engage a professional such as an estate agent or chartered surveyor to determine the market value of a site or building at the date of death or the date the property was given as a gift if this occurred in the last 7 years.
Next, you need to estimate the value of the whole estate; this will affect how much inheritance tax, if any, you have to pay. Then, you will need to report the value of the estate to HMRC. If inheritance tax is due, you will need to report the full details of the estate.
You can make inheritance tax payments before you finish valuing the estate. It can take many months to value the entire estate, and you must start making inheritance tax payments within 6 months of the date of death.
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