After someone passes away, their personal representative(s) will generally need to apply for a Grant of Probate or, if there isn’t a Will, a Grant of Letters of Administration. This is the legal authority that will enable them to administer and distribute the deceased’s estate.
There is no legal timeframe for applying for probate, however much of the estate administration will not be possible until this is received, so it is important to attend to this sooner rather than later.
Deciding whether probate is necessary
In the case of some small estates, probate may not be necessary. This will depend on the amount of assets held. Banks each have their own limit above which they will require sight of a Grant of Probate before closing an account and releasing funds. This can range from £5,000 to £50,000, depending on the bank.
If the deceased owned a property, then probate will generally be required if the property is to be sold.
Before applying for probate
Where probate is required, there is a set procedure to go through before an application for the grant is made to the Probate Registry.
Firstly, the death needs to be registered within five days. It is recommended that you also purchase extra certified copies of the death certificate as some asset holders will require a copy before releasing money.
The next stage is to detail the assets and liabilities contained in the estate and work out their value. This can be a lengthy process if the deceased had substantial holdings. You will need to contact the asset holders, to include banks and building societies, stockbrokers, fund managers, pension providers, HM Revenue & Customs, lenders and any other likely organisation or financial institution to which the deceased could have owed money.
Property & gifts
If the deceased owned any property, that will also need to be valued and possibly sold depending on the circumstances.
Any gifts that the deceased made over the previous seven years will also need to be included in the value of the estate. If Inheritance Tax is payable, it will be payable on these on a sliding scale, depending on how long ago they were made.
Applying for probate
The probate application form will need to be completed along with an Inheritance Tax form stating the value of the estate. If the deceased was entitled to any Inheritance Tax relief, then this should be included. For example, if their spouse pre-deceased them, they may be able to take advantage of any unused Inheritance Tax allowance (nil-rate band) they had left over.
The probate fee should accompany the application. Once this has been accepted, Inheritance Tax should be paid. It may be possible to pay this from one of the deceased’s bank accounts if you are able to provide the bank with the relevant form showing the amount due. Alternatively, HM Revenue & Customs may be prepared to accept payment in instalments.
The winding up of an estate can be a lengthy process, particularly if there one or more properties that need to be sold. Generally, obtaining probate as soon as you can will help set things in motion and allow you to start closing accounts, collecting in assets, paying off creditors and ultimately distributing the estate to the beneficiaries.