This is why we have put together a document to help you understand probate more fully. We have included information such as who is responsible for carrying out probate, what to do if there is or is not a will, the appointment and responsibilities of an Executor and much more. Have a read through and hopefully we will have answered many of the questions that were playing on your mind.
What is Probate?
In the UK, ‘Probate’ is the term used to describe the legal and financial processes involved in dealing with and distributing the assets of a person who has died. It might mean seeking permission to distribute their assets/estate and/or clear their debts in accordance with their will.
The person who carries out probate is known as the ‘Executor’, and is usually nominated in the deceased’s will. There can be more than one executor and contrary to popular belief, they are allowed to be a beneficiaries of the will.
An executor will often be a family member or a trusted friend of the deceased. However, it is sometimes necessary to appoint a professional executor who will often be a solicitor or professional will writer. In some cases, the next of kin or ‘Executor of the Will’ may have to apply for Probate before anyone can claim, transfer, sell or distribute any of the deceased’s property.
Before probate is undertaken, a ‘Grant of Probate’ or ‘Letters of Administration’ must be obtained. A ‘grant of probate’ is an official document that gives you the legal right to settle the estate of someone who has died. The Executor uses the grant to show they have the right to access funds, organise finances, and collect and share out the deceased person’s assets as set out in the will. Once this has been granted, the next of kin or Executor may begin dealing with assets of the deceased in accordance with their Will.
Like the grant of probate, the grant of ‘letters of administration’ is a legal document which confirms the administrator’s authority to deal with assets belonging to the deceased.
In some cases such as where the beneficiary is a child, the law states that more than one person must act as the administrator.
*You might also come across the term grant of representation which is a general term used for grants of probate and the granting of letters of administration.
When is Probate Required?
Probate is Required in the UK when the person who died leaves one or more of the following:
- £10,000 or more
- stocks or shares
- some insurance policies
- property / land owned in their name or as ‘tenants in common’
Usually the bank or relevant institution will require proof of the grant of probate before handing over control of the assets. If the estate is small, some organisations, may choose to release the money to you.
You may not need a grant of probate if the deceased:
- owned less than £10,000 worth of assets.
- owned everything jointly with another person, in which case, everything passes automatically to them.
To find out if the assets can be obtained without a grant, the executor or administrator would need to write to each institution informing them of the death and enclosing a photocopy of the death certificate and the will if there is one.
How Does Probate Work?
How the process of probate in the UK is carried out will depend on whether you choose go through probate yourself or appoint a professional to act on your behalf.
Appointing a professional is often wise, especially if you are dealing with a complex estate or many beneficiaries. If you choose to administer the will yourself, you will need to fill out the relevant forms (if in England you must apply to the Probate Registry) to obtain the right to act as an executor. You will then need to gather all the assets of the deceased and distribute them to the beneficiaries.
Probate also involves tasks such as notifying banks, building societies, relevant government departments of the person’s death, settling and closing accounts they hold, valuing their assets and liabilities and paying off any inheritance tax that might be owed.
Here is a list of steps that the process of probate entails:
The probate process involves the following steps:
- Find out if the deceased posessed any prepaid probate. This will make the process much simpler and the following steps will be taken care of for you. In cases where probate was prepaid, the solicitor will carry on the following for you.
The validity of the Will will be checked as will the beneficiaries’ entitlement to the deceased’s estate.
- The value of the estate will be determined by identifying and valuing the assets of the deceased against all outstanding debts.
- A Grant of Representation from the Probate Registry must be obtained before the administration of assets. You may have to fill in a probate application form which can be obtained online from the Government website.
- The deceased’s executor or representative must swear an oath that the information you supply is true to the best of your knowledge. This can be done at a local probate office or at the office of a commissioner for oaths. Many solicitors offer this service.
- Payment Inheritance Tax due to HMRC, if there is any.
- Settling of any outstanding debts by sale of the deceased’s assets if necessary. Remember, tax owed by the deceased is considered a debt on the estate. In situations where debts exceed the value of the estate, the estate becomes insolvent.
- Recording of all payments to and from the estate. These must show the remaining balance to be distributed amongst beneficiaries.
- Distribution of the remaining assets according to will
What If There Is No Will?
In the UK, (England and Wales), when someone dies without a Will, the ‘Rules of Intestacy’ apply. This means the deceased’s relatives are lined up in an order of priority and the estate is shared accordingly. So if, for example, their husband, wife or civil partner is still alive, he/she will be the main beneficiary.
After a spouse or civil partner, the order of priority is as follows:
- Great grandchildren
- Nieces and nephews
- Other close relatives
When someone dies ‘intestate’, only a beneficiary is allowed to apply for Probate. This person will be known as an ‘Administrator’, as opposed to an Executor where a Will exists.
The Administrator must apply to the Probate Registry for a Grant of Letters of Administration. This is different to where a will exists where the Executor must apply for a Grant of Probate. Otherwise the process is the same. However, in this case, the Estate will be distributed according to the Rules of Intestacy, not the terms of the Will.
It is hard to determine how long it will take to get a Grant of Probate and complete the Estate administration process as every Estate is different.
How Long Does The Process Take?
A straightforward probate case, such as one where the deceased owned a simple estate, no property to sell and a single bank account could take as little as 3 months though most probate cases in the UK take around 6 to 9 months for beneficiaries to receive their inheritance. Professional executors will expect to be paid from the proceeds of the estate for carrying out this duty.
Applying For Probate
“Applying for Probate” means applying for the legal right to deal with someone’s property, money and possessions/estate when they pass away. If the person left a will, you will get a ‘grant of probate’. If the person did not leave a will, you’ll get ‘letters of administration’. The process of application is the same for both, though The process is different in Scotland and Northern Ireland.
There are instances when you do not need to apply for probate. This is if the person who died:
- jointly owned land, property, shares or money, in which case, these will automatically pass to the surviving owners.
- Had only savings or premium bonds.
Here is a rundown of the steps of applying for probate:
- Check if there’s a will.
- Learn what to do if there’s no will.
- Make a Valuation of the estate and inform HMRC.
- Make the application for probate.
- Pay any Inheritance Tax due. Often, a portion of this must be paidbefore probate is carried out.
- Gather all proceeds from the sale of the person’s property.
- Pay off outstanding debts.
- Make a record of how proceeds will be split.
- Distribute the assets to the people named in the will.
Should I use a solicitor for probate?
There are times you might want to think about using a probate specialist, such as if:
- The value of the estate is over the Inheritance Tax threshold.
- The estate is still earning a regular income and complicated taxes need to be paid. (The threshold for the 2016-17 tax year is £325,000).
- The deceased died without a will, and the estate looks to be complicated to administer.
- There are doubts about the validity of the will.
- The deceased had dependents who were deliberately left out of the will who might want to make a claim on the estate.
- The estate is bankrupt/insolvent/in administration, or;
- There are doubts that the estate is bankrupt.
- The deceased owned foreign property / assets.
- The deceased resided outside the UK for tax purposes.
This list is not exhaustive but gives a good idea of when a solicitor should be approached for probate services.