What is Probate?
Being granted probate means you can lawfully manage the estate of someone who has died, both in terms of the legal and financial decision making. In this guide we’ll look at the definition of probate and examine how the process works.
What is probate when someone dies?
When someone passes away, you will need to apply for a Grant of Probate, or if the deceased didn’t leave a Will, the Letters of Administration. Once you have permission, you will be able to deal with the deceased person’s estate.
Before you apply for a Grant of Probate or Letters of Administration, you will need to consider if there is an Inheritance Tax (IHT) liability. The tax form you need to complete depends on whether you expect Inheritance Tax to be due on the estate. IHT is paid if a person’s estate (their property, money and belongings) is worth more than £325,000 when they die. You may wish to seek professional advice to help you understand your tax liability and how you can pay the correct amount.
If you don’t wish to apply for probate, you will need to complete a Deed of Renunciation, which frees you from the responsibility. It’s effective from the date when it is signed, and must be registered at the relevant Probate Registry. If there are other executors named in the will, they will continue to act in the role without the renouncing executor; there may be substitute executors appointed who can then act.
A Grant of Probate gives you permission to carry out the wishes of the deceased’s will. If the deceased left a co-habiting partner, the will could either provide for the surviving partner to inherit the entire estate or share in the estate.
A Letter of Administration, once you have been issued the grant, you will be able to act as the administrator of the estate. Under the rules of intestacy this means that in this scenario, co-habiting couples, also known as common law spouses, are not recognised and could be left financially worse off.
However, even if you can't inherit under the rules of intestacy, you might be able to apply to court for financial provision from the estate.
You'll need to apply for a Grant of Probate if you're a named executor in the deceased person's will. However, there are exceptions where you may not need to apply; for example, any surviving owners will automatically inherit land, money, shares or property if they were jointly owned, and you also won't need to apply if the deceased person only had premium bonds or savings.
The executor or administrator of the estate are not required by law to apply for probate. However, if you do not apply for probate, you will not be able to legally transfer the title of any assets that exist in the deceased’s name.
While every probate specialist will charge different fees, you can expect to pay thousands of pounds if you use a professional, whereas it may cost you a few hundred pounds to do it yourself. The exact costs will depend on the size and complexity of the estate; if the value is greater than £5,000, the cost of applying for probate is £215. There is no fee if the value is below that amount, and there is a £1.50 charge for each copy of the Grant of Probate itself. The probate process can be expensive, but getting the job done professionally could save you hassle in the long-run.
Depending on how much preparation you’ve done beforehand, the entire process can take between 3 months and a year before you are granted probate. According to the government, it can take between 6 and 9 months to value the deceased person’s estate, but this can take longer if the estate is complex. In terms of just applying for a Grant of Probate, this may take a matter of weeks, and up to 6 weeks for the probate application to be approved.
Once you’ve received confirmation that you can lawfully manage the deceased’s estate, there are a number of steps you may wish to take:
- Oversee the sale of any probate property, if you’re keen to sell.
- Make a life insurance claim (that are not in trust).
- Send any copies of the Grant of Probate or Letters of Administration to the deceased person’s asset holders, such as their bank, building society or insurance company.
- Close any bank accounts that remain open once you’ve recovered the funds.
- Pay any outstanding tax bills, excluding the IHT liability that would have already been paid, and debts.
- Distribute money and assets to the beneficiaries in accordance with the will.
Managing the financial affairs of a loved one can be a challenging process, but it’s important to get the probate process right so that you can enact their wishes faithfully. Read more about your responsibilities as an executor of a will.