Probate and Estate Administration
WHAT IS PROBATE?
Probate is the legal authority to dispose of money, possessions, property and debts (the estate) on behalf of a person who has died. It is required even if there is a valid will is in place.
The whole process is complex and complicated and often carried out during a stressful time when emotions are raw.
DO I HAVE TO APPLY FOR PROBATE?
Probate is not required if the total value of the estate is less than £5,000 after the funeral has been paid for. Financial institutions, like banks and building societies, are usually happy to release small sums of money on receipt of a death certificate although you will probably need to sign a form. Accounts in joint names are usually transferred to the survivor without probate.
HOW DO I APPLY FOR PROBATE?
A personal representative, usually an executor named in the will, has to value the whole estate and apply to the Courts for Probate for a Grant of Representation (commonly known as probate). The valuation must include gifts made within the previous seven years and debts.
The Grant of Representation gives you the legal right to administer the estate. You can then pay the debts and distribute the remainder of the assets to the beneficiaries named in the will or by following the rules of intestacy if there is no will.
SHOULD I SEEK PROFESSIONAL HELP WITH PROBATE?
Dealing with the death of a loved one is, thankfully, a rare occurrence in our lives. But some professionals deal with this sort of thing every day of their working lives. That makes them familiar with the process and the pitfalls.
Most people don’t have the time or in-depth knowledge to deal with probate. Valuing and administering an average estate is a challenging business taking up to 80 working hours spread over six to nine months – although some take much longer. Half of all executors hand the whole job over to a professional. A few choose to complete simple estates on their own and about a third retain control but work hand-in-hand with a specialist.
Another problem is that executors can be held liable by the courts for any mistakes made. And you may find yourself in the middle of an argument between family members, which often happens when money is involved.
WHEN WILL I DEFINITELY NEED PROFESSIONAL HELP WITH PROBATE?
If the will can’t be found or if it’s invalid or if it’s likely to be contested in court or if its instructions are not clear or if the beneficiaries can’t be found.
If the deceased left money or property in trust, owned a business or was a partner in a business, owned land or property that has an unregistered title, or owned land or property abroad or is involved in any court proceedings.
If the estate is subject to inheritance tax or if it’s insolvent or part of it is to be passed to children aged under-18 or someone is due to benefit from a life interest in it or it was inherited from another estate within the last two years or if it belonged to a widow or widower and may be liable to inheritance tax, as some of the previously deceased spouse’s unused tax allowance may be used.
WHAT SHOULD I DO AS SOON AS SOMEONE DIES?
Providing the coroner is not involved, report the death to the doctor and obtain a medical certificate. The actual death certificate is issued by the register office, which must be notified within five days and must be in the town that the death occurred – not necessarily their home town. Once a medical certificate has been issued, you can start making arrangements for the funeral.
Next, secure the deceased’s assets and property if it was left unoccupied. Locate the will and confirm its validity. Contact the executor named in the will or determine who will be the personal representative, if no executor is named, who will administer the estate.
HOW COMPLICATED IS PROBATE?
If you think about how complicated our lives are nowadays, it’s no surprise that every estate is unique and throws up its own set of challenges.
The executor needs to trace all of the deceased’s financial and legal documents and request a financial statement by sending a copy of the death certificate to each organisation that holds an asset or liability. A bank account should be opened on behalf of the estate.
A Grant of Representation can then be applied for by sending the will, death certificate and the necessary forms to the Probate Registry.
If the estate is valued at below the inheritance tax threshold of £325,000, an IHT205 form can be completed. Form IHT400 is required if the estate is worth more than £325,000 or if certain circumstances apply, such as foreign assets valued at over £100,000.
The executor may need to arrange a loan to pay any inheritance tax and the probate fee. He should place the statutory advertisement for creditors and other claimants and send a copy of the Grant of Representation to all the asset holders and request payment of all funds.
Once all this is in place, the executor needs to fill in the income tax and capital gains tax forms for the period of administration, pay all creditors, complete stock and share transfer forms, draft an assent for the property, prepare the estate accounts and distribute the legacies to the beneficiaries.
It’s important to retain all correspondence and maintain good accounts as HM Revenue & Customs may ask to see them.
Call Heritage Will Writing on 02380 879243 today if you would like further information.
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The information provided here is intended to address the types of questions that people are often concerned about.
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