Probate Made Simple: What You Need to Know

Probate Made Simple: What You Need to Know 

 In the time after someone dies, the people closest to them will usually be responsible for winding up their estate. This is usually carried out by the individuals the person who has died appointed as executors in their Will. If the person who has died did not leave a Will, this task will need to be taken on by a close family member who applies to be appointed as their administrator.

What is probate?

The period of administering an estate is often referred to as probate. However, the term ‘probate’ more correctly refers to a specific aspect of the process, which is applying for and being issued with a Grant of Probate.

A Grant of Probate is an important legal document that executors can use to prove they have the right to deal with an estate. In situations where there is no valid Will, the equivalent document is called the Letters of Administration. The collective term for both types of document is grants of representation.

If you have found yourself responsible for a family member’s estate, you may be unsure where to begin. This is understandable: most people have very little experience with this process until they find themselves responsible for it. Some estates can be wound up quite quickly and simply, while others might involve a great deal of work.

Where each estate falls on this spectrum will depend on factors such as:

• The size of the estate.
• What kind of assets make up the estate.
• Whether any of the assets are located overseas.
• How much debt is held by the estate.
• Whether the estate includes any trusts.

If you are feeling daunted by the process, please be assured that you don’t have to deal with it alone. Specialist probate solicitors like us will be able to offer you as much support as you need. Some people might choose to have a one-off meeting to talk them through what’s required, while others will appoint a probate solicitor to handle the whole process on their behalf.

The probate process explained

Below, you’ll find a step-by-step guide to applying for probate in the UK.

Step one: assess the estate

The first step in the process of administering an estate and applying for probate is to carefully assess the situation. This is an important step and should not be rushed. You need to build a full picture of the total value of all the assets that are owned by the estate, as well as any debts that need to be paid off.

You will need to sort through any paperwork the person who has died has left behind concerning property ownership, mortgages, vehicle ownership, bank accounts, savings, stocks, shares, digital assets and bills. Remember that many accounts are now paperless, so you may need to investigate email accounts in order to look for digital paperwork.

Any debit or credit cards the person had could help you make a list of all the banks, building societies and credit companies they held accounts with.

You will also need to make a list of utility companies etc that the person who has died held accounts with, as these will need to be paid off and closed down.

Step two: decide whether you need to apply for a grant of representation

In the UK, it is not always necessary to apply for a Grant of Probate or Letters of Administration in order to wind up an estate. Whether or not this is needed will depend on the nature of the estate.

You will need to apply for probate if there is any solely-owned property as part of the estate, as this will be necessary to prove that you have the right to sell or transfer the property on the estate’s behalf. (If the person who has died owned property as ‘joint tenants’, then ownership of that property will revert solely to the joint owner and a grant of representation would not be required.)

You will also likely need a grant of representation in order to access any solely-owned bank or savings accounts that contain more than a nominal sum, though this is down to the policies and discretion of the specific financial institutions involved. (Again, the ownership of any money that is held in joint accounts will automatically revert to the joint account holders.)

If you’re not sure whether you require probate, the best thing to do is to contact all the relevant financial institutions and organisations and ask if they will require sight of a grant of administration before they allow you access.

You can read more about when you might and might not need to apply for probate here.

Step three: check if any inheritance tax will be due and, if necessary, submit application for Grant of Probate/Letters of Administration

The next step is to check whether any inheritance tax is due on the estate. If there is, you will need to complete an inheritance tax form along with an application for a grant of representation and submit these to HMRC and The Probate Registry.

You can usually expect to be granted probate within 12 weeks of your application, though it can take longer if The Probate Registry require additional information. There can also be further delays during particularly busy periods.

Step four: pay any inheritance tax that’s due

If there is any inheritance tax to pay on the estate, this will come due at the end of the sixth month following the death. Ideally, the personal representatives will be able to pay the bill from the estate by this deadline. If you aren’t able to make the deadline, interest will start to accrue. (Late payments are subject to 6.5% interest.)

The timeline here is not always straightforward. In some cases, probate may not have been granted yet, and therefore the personal representatives may be unable to access the necessary funds from the estate. Equally, being able to pay the tax bill may be reliant on selling property, and this may not have been completed within a six month period.

In situations like these, the personal representatives have a few options:

• Cover the inheritance tax bill from their own funds, then claim it back from the estate when possible.
• Take out a loan to cover the tax bill, then claim it back from the estate when possible.
• Talk to HMRC to determine whether it will be possible to pay the tax bill in instalments.

Step five: if appropriate, sell any property or assets belonging to the estate

Property and other assets may need to be sold as part of the process of winding up an estate. This may be in order to raise funds to pay an inheritance tax bill or other debts, or it may be so that the value of the estate can be more easily distributed amongst beneficiaries.

If property or other assets are going to be sold, this step may come before paying any inheritance tax that is due, or it may come after. Though personal representatives have the right to place property on the market at any point, it will not be possible to complete on the sale until the grant of representation has been issued.

Step six: pay off any debts

It is vital to ensure that any and all debts belonging to the estate have been paid off before any assets are distributed to beneficiaries. This is because any debts the person who has died has left unpaid have legal priority over any bequests that have been made.

If any debts are left unpaid, the personal representatives could find themselves personally liable for them.

Step seven: distribute the remainder of the estate to beneficiaries

Only once all other steps in the process are complete is it possible for any remaining assets belonging to the estate to be distributed to beneficiaries. This is why it can often take far longer than beneficiaries expect to receive an inheritance they are due.

How this should be done will depend either on the instructions in the Will (if there is one) or according to the intestacy rules.

What if things don’t go to plan?

In many cases, the administration process can be managed in a fairly straightforward way. However, these things do not always go as expected. Some estates might be subject to additional complications or unforeseen events that make the process far more difficult to navigate.

If you’re facing a situation like this, please be assured that the Roche Legal team are always on hand to help.