Probate

When is probate required?

A Grant of Representation also referred to as a ‘Grant of Probate’ or ‘Grant of Letters of Administration’ is the name for the legal document appointing executors or administrators to deal with the estate in question.  It is the legal document that is used to distribute assets and settle debts.

A Grant of Probate should be obtained for any estate worth over £5,000 in total. In practice, however, most financial institutions, such as banks, will have a limit that they will pay out without requiring a Grant. This is often more than £5,000. If the person who has died owned a property either solely or jointly, then a Grant of Probate would also be required to sell or transfer the property to another party.

What are the steps you need to take with probate?

The ‘probate’ process can be very complex and will vary from estate to estate. This means the steps involved will not be the same for all cases, as some may require additional work along the way. The general process, though, is this:

• Collecting all information about the value of the estate and its details.
• Sorting an Inheritance Tax return and paying any tax due.
• Completing a Declaration as part of submitting your application to the Probate Registry.
• Once the Grant is issued, it will be sent to all relevant financial institutions (such as banks), so they can release funds. Once funds are received, outstanding liabilities will need to be paid.
• The final distributions can be made to the beneficiaries once the estate accounts are approved by all executors of the will.

What’s the next step?

A solicitor can help you with the probate process, fine-tuning the legalities and assisting with the Grant of Probate. While a person can legally carry out probate without a solicitor if the estate is worth less than £5000, Citizen’s Advice recommends you use a solicitor for the following reasons:

• If the terms of the will are not clear
• Part of the estate needs to be passed on to beneficiaries under the age of 18
• Money has been left in a trust by the person who has died
• Property or land was owned abroad by the person who passed
• The person who has passed owned a business
• If it seems anyone is likely to dispute the will

Does tax play a part in probate?

It can. Inheritance tax is a tax applied to assets when someone dies. When someone inherits money, for example a child inheriting an estate after their parents’ death then the value of the estate can be taxed. Tax is applicable if the estate’s value is over a certain amount (see below).

What is the tax-free threshold?

The tax-free threshold for the current tax year is £325,000, which means your estate will not incur inheritance tax if it is under this amount. There is also a tax-free allowance that applies if you pass your primary residence on to your direct/lineal descendants.  This can increase your tax-free allowance up to a maximum of £500,000, meaning a married couple can potentially benefit up to £1 million of inheritance, tax-free.

Some things are exempt from inheritance tax, including wedding gifts, and the amount of inheritance tax due can be reduced in many circumstances. It can be complicated, but only a small percentage of estates are considered large enough to incur inheritance tax. If you are unsure as to whether your estate will be taxable on your death, speak to one of our team who will be able to advise you.

How do I obtain a Grant of Probate?

To get a Grant of Probate, you will have to complete an inheritance tax return and pay any tax due on the estate, if there is any owing.

JWP’s Private Client Team can assist with both the tax return and the application process, so feel free to contact us and we can talk you through the steps involved.

Do administrators and executors have different roles when it comes to probate?

The term “executor” is used when a person is appointed by a Will and the term “administrator” is used when a person is appointed under the Intestacy Rules because the deceased passed away without leaving a Will. They are effectively the same role.

How long does probate take?

An average estate will take around 3-6 months to complete, but it is not uncommon for it to take much longer for complex or high value estates, often up to 1-2 years.