Probate: the basics
When a loved one passes, along with the emotional fallout, their death triggers a mountain of admin. One of the tasks that must be undertaken is to apply for probate and this must be done by the person who has been designated by the deceased as their executor.
Most people have heard of probate, but only have a hazy idea of what it involves. In a nutshell, probate is the legal right to administer the estate of someone who has died, according to their will.
If the person who has died hasn’t made a will they are termed to have died intestate. In this case the family will have to decide who should apply for something called ‘Grant of Letters of Administration’. This is permission to act as executor and administer the estate. Without a will the process will take much longer, so if you haven’t made a will yet, bear in mind that your loved ones will have additional stress to deal with after you pass.
The Probate process
The executor of the will must apply for probate. It doesn’t prevent the reading of the will, but it does involve validating the will and ensuring that it meets legal requirements.
Before the executor can submit an application for probate they must provide a lot of information to HMRC. This includes a list of assets owned and valuation for the assets. This final account of the deceased’s estate needs to be included in the probate submission for inheritance tax purposes, so it’s important that it’s done beforehand.
Bear in mind that, unless the person who has passed was super-organised and has left a tidy list of all their assets, the evaluation process can involve tracking down assets that few, if any, people know about. Which is one reason that open discussion in families about inheritance and wills is a plus – so there are no surprises.
There may be formal valuation required on certain assets such as property, chattels, listed shares and value of shares in a privately owned company or sole trade.
The executor will also need to work out if the estate is an excepted estate and calculate the inheritance tax liability.
There are a few circumstances where probate will not be required, these include:
- Jointly owned assets passing to the surviving spouse
- Bank accounts with under £5,000 in funds per bank account
- An estate that includes no property, land or shares.
Documentation such as a death certificate and a copy of the will also need to be provided.
Once HMRC process the information they will provide a reference number, which can then be used to apply for the grant of probate.
While previously unknown offspring may appear to be the stuff of novels, they are not unheard of, and a mention of a bequest to someone nobody in the family has ever heard of, can cause all kinds of problems. It is recommended to not distribute the estate within six months of application of grant of probate in case of any claims against the estate.
The executor is responsible for paying Inheritance tax and any debts must be paid before any of the beneficiaries receive their inheritance.
Given the complex nature of identifying which assets need to be included in the estate and the calculation of inheritance tax, it’s simply good sense to get a qualified probate practitioner on board. This will ensure the process is dealt with efficiently and correctly, which will alleviate at least one stress at a difficult time.
If you have any questions about probate, or require probate services in Hertfordshire, then feel free to get in touch with the Cook & Partners team today!
