The ONLY Probate Source you will need
Losing a loved one can be a difficult, emotional and stressful time without the added burden of dealing with their probate.
What is Probate? Where do you start? What do you need to do?
To make things a little bit easier for you at such a difficult time, this article will simplify the probate process. It will also answer some of the most common questions asked about probate.
So what is Probate?
Probate is the legal term given to the process of dealing with the “estate” of someone that has passed away. “Estate” means all of the deceased’s assets and their liabilities. Assets includes money in bank and building society accounts, life insurance policies, pensions, shares and investments, etc. Liabilities are mortgages, loans, credit cards and utilities, etc.
Probate of a Will
If the deceased left a Will then the responsibility for probate falls on the Executors of the Will. The Executors must prove the Will at the Probate Registry to obtain a Grant of Probate. This then gives them the legal right to deal with the deceased’s affairs, close bank accounts, collect funds in and to sell property.
The Grant of Probate is also known as the Grant of Representation and the Grant.
There is also a “Grant of Letters of Administration with Will annexed”. This is where the deceased left a valid Will, but didn’t appoint executors or they are unable or unwilling to act. In such circumstances the Probate Registry will issue a “Grant of Letters of Administration with Will annexed” to the residuary beneficiary/ies.
Probate where there is no Will
If the deceased died intestate, which is without leaving a Will, the responsibility falls on the person or persons that are due to inherit under the Rules of Intestacy, known as the Administrators. They can be any one of the following:
- Husband/wife or civil partner
- Children, if they are over 18 or grandchildren if their parent died before the deceased. Again they must be over 18 years old
- Brothers and sisters
- Other family members – see our upcoming blog on the Intestacy Flowchart
The Administrators would need to apply for a Grant of Letters of Administration. This is essentially the same as a Grant of Probate but for someone that has died without leaving a Will. This then gives the Administrators the authority to deal with the deceased’s affairs.
NOTE – Executors and Administrators are referred to as the Personal Representatives.
How to apply for Probate
The process of applying for probate, whether someone has passed away leaving a Will or intestate, is fundamentally the same. There are 6 simple steps, each of which is briefly explained here.
Establish if there is a Will. This will appoint Executors who will have the authority to deal with the estate. Otherwise, the person or persons due to inherit under the Rules of Intestacy will have the authority.
As well obtaining the Original Will, you will need date of death valuations of all the deceased’s assets and liabilities. This will help you determine the estate value and whether it is taxable or not. You will need to obtain probate valuations for all properties that form part of the estate
Complete the appropriate Inheritance Tax forms and calculate the amount of Inheritance Tax there is to pay, if applicable. Submit the forms to the Probate Registry with your Grant of Probate application. The Grant will give you the legal right to deal with the deceased’s affairs i.e. bank accounts and property.
The process is slightly different for taxable estates. Complete the appropriate Inheritance Tax forms and submit them to HM Revenue and Custom (HMRC). Arrange payment of the Inheritance Tax or at least the initial amount. Submit the Grant application to the Probate Registry when you are in receipt of the IHT421 from HMRC. The IHT421 is acknowledgment from HMRC that the Inheritance Tax has been paid.
All the relevant Inheritance Tax forms can be obtained by calling the HMRC Inheritance Tax helpline. Click here for the contact details.
NOTE – The Original Will is retained by the Probate Registry and will not be returned to you. The reason for this is that it then becomes a public document.
Pay the Inheritance Tax, if applicable.
If the estate is taxable and there are sufficient funds in the bank account, the bank will usually pay the Inheritance Tax direct to HMRC upon receipt of the completed IHT423.
If there are no liquid assets, the Personal Representatives will have to pay the Inheritance Tax. Whether that is from their own funds or by taking out a bridging loan. If the Personal Representatives use their own funds then they can claim it back from the estate.
Collect in the estate assets. This means closing down bank accounts and collecting in funds from life insurance policies, selling shares, etc. The Personal Representatives will also now have the authority to deal with any properties that form part of the estate. The beneficiaries can either decide to sell or transfer the properties.
Settle any debts the deceased had, such as utility bills, mortgages, loans, credit cards, etc.
Prepare the Estate Accounts and once approved by all Executors and beneficiaries, distribute the estate.
If the deceased carried out Inheritance Tax planning before their death, this may make the probate process easier as it could result in less Inheritance Tax being payable.
When is probate required?
You will need to apply for a Grant of Probate where:
- the deceased owned property (houses, buildings or land) solely or as Tenants in Common;
- When a bank or other financial institution require sight of the Grant of Probate. This is usually when the value of an account or policy exceeds that specific organisation’s threshold.
All organisations set their own limit, so you will need to check with the various organisations what their requirement are.
How long does probate take?
The national average for administering an estate is 6-9 months. However, every estate is different. Some can take a few months to deal with whilst others can literally take years.
Taxable estates tend to take longer, as can estates with properties.
Intestacy cases can sometimes take years to conclude. This can happen when there are no known living relatives of the deceased. In such cases the Personal Representatives have no other option but to instruct genealogists to establish the family tree. This is not only time consuming but can be very costly. Or there are missing beneficiaries.
Your local Probate Registry
You can find you nearest Probate Registry by clicking here.
Grant of Probate Search
The government’s website provides an online probate search service. You can search for any Grant of Probate issued since 1996 within a matter of minutes. To carry out the search you will need the deceased’s surname and year of death.
This service can be used to obtain a copy of a Grant or just to find out if one has been issued. As well as a copy of the Grant, you will be provided with a copy of the Will, if the deceased left one. Click here to carry out a search.
It costs £10.00 per Grant which includes the Will, if it is available. If you request a copy of the Grant online it can take up to 10 working days to receive. However, from experience, it is usually available to download within a matter of days.
If you do not have access to the internet then you can complete a PA1S form. It can, however, take up to 4 weeks to receive a response.
How much does probate cost?
It all depends on the value and complexity of the estate. It also depends on whether or not you instruct a professional to deal with the estate administration on your behalf.
Obviously it will be cheaper if you deal with it yourself. However, there is a lot of work involved in administering an estate. From numerous letters/calls to various organisations notifying them of the death and obtaining the date of death valuations, to completing the Inheritance Tax forms and calculating any Inheritance Tax that may be due. Should anything go wrong, you could be financially liable.
Most people instruct a professional, who takes the entire matter off their hands.
Most professionals will charge an hourly rate or a percentage of the estate value. Percentage fees are normally between 1% to 5% of the estate value, plus VAT and disbursements. Disbursements are third party costs like the Probate Court fee or the fee for swearing the Oath.
How we can help you
At Clarence Trustees, our fees are fair, honest and transparent. We offer a fixed fee probate service in which we quote a fixed fee in advance based on the actual amount of work involved. We do not charge percentage fees. There are no upfront costs to pay. Our fees will not change unless the circumstances change. For example, if an asset comes to light that we were not aware of. Or when an estate is more complicated than we were first advised.
What this means for you is that your loved one’s estate is dealt with quickly, cost effectively, and correctly. It means less worry and hassle for you and it means more value in the estate for the ultimate beneficiaries.
We are a local Southend firm that covers the Essex area. Contact us today to arrange a free initial consultation and to obtain a no obligation quote.
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