What exactly is probate and when is it needed?
Probate is the process of applying to the Probate Registry for confirmation that a Will is valid and confirming the executors’ authority to administer the estate on behalf of a person who has died.
Whether probate is required will depend on the value and nature of the deceased person’s estate. Usually, if there is a property, significant cash amounts in their bank accounts or a number of shares you will need to apply for probate to deal with the deceased person’s assets.
What if I have a Will?
Often people assume that having a Will means that probate is not required. If an estate is small, banks will usually be prepared to release funds to the executors on production of the original Will and Death Certificate. However, if there is a property, or large sums in the bank accounts, a grant of probate will likely be required. Having a Will makes the process more straightforward as the distribution of the assets is clear. In addition, the Will names who should be responsible for dealing with the estate and often contains information regarding the deceased person’s funeral wishes.
I am worried about whether my family will have to pay inheritance tax. What are the rules?
Inheritance tax is usually payable for estates valued over £325,000. To calculate the value of an estate, you need to work out the value of all the assets and deduct any liabilities. There are certain exemptions and reliefs for inheritance tax that can be applied, including an additional tax-free amount of £175,000 if the estate qualifies for the Residence Nil Rate Band. In addition, if more than 10% of the estate is gifted to charity, the inheritance tax rate can be reduced to 36%. These figures are accurate as at April 2020 and may be subject to change. Inheritance tax is paid by the estate, and ultimately the responsibility for calculating and paying inheritance tax falls to the executors.
What does the process involve?
The first requirement is to register the death and arrange the funeral. You may wish to wait until the funeral has taken place to deal with the probate application as the period immediately after death is stressful and the focus is usually on decisions relating to the funeral.
The first stage in the process of applying for probate is to calculate the value of the assets in the estate. Once the assets are known, you can pay any inheritance tax due, and apply for the Grant of Probate (or Grant of Letters of Administration if there is no Will). You do not need to use a solicitor for probate, and you can manage the process yourself or, in some cases probate may not be necessary. However, if an estate is complex, or you are unsure, you can appoint a solicitor to deal with everything on your behalf.
How long does it take?
The probate process can take six to 12 months to be completed as it is recommended to wait a certain amount of time from the Grant of Probate before distributing the estate to cover the executor against any potential claims against the estate.