Probate – Frequently Asked Questions
If you are dealing with the affairs of someone who has died, you are likely to have many questions about probate. Today at S Bish Estate Planning we answer some of the probate questions that are most frequently asked.
Winding up an estate after a death can be complicated. Understanding the probate process before you start is important, so that you can decide whether you have the capacity to take on the task or whether you need the help of a probate professional.
What is probate?
The word probate is often used to refer to the process of dealing with someone’s affairs after their death. It also refers to the Grant of Probate, which is a legal document giving authority to the executors named in the Will to deal with the deceased’s estate.
Where the deceased did not leave a Will, then the document required is a Grant of Letters of Administration.
How do I obtain a Grant of Probate?
To obtain a Grant of Probate, the estate executor will firstly need to value the estate and calculate whether Inheritance Tax is payable. Calculating Inheritance Tax can be complicated and you will need to take into account substantial gifts made in the seven years before death, as Inheritance Tax may also be payable on the value of these gifts on a sliding scale.
Once the estate has been valued and Inheritance Tax paid, you can apply to the Probate Registry for a Grant of Probate or Grant of Letters of Administration. You will need to fill in their application form and send it together with the original Will, if there is one, any codicils that may have been made and the application fee. HM Customs & Excise will send a receipt for any Inheritance Tax that has been paid directly to the Probate Registry.
Do I need to pay Inheritance Tax?
No Inheritance Tax is payable if the estate is worth £325,000 or less or if you leave everything above £325,000 to your spouse, civil partner or a charity.
If you leave property to your children or grandchildren, the threshold can increase to £500,000. If you were married or in a civil partnership and your spouse or civil partner predeceased you and their Inheritance Tax allowances were not used when their estate was administered, the allowances can be transferred to your estate.
Calculating Inheritance Tax can be complicated, especially if gifts were made in the seven years prior to death. You are advised to seek expert advice if you are not sure how much is payable as the estate will be charged interest and penalties if insufficient tax is paid.
Personal representatives to an estate, ie. executors and administrators, have personal liability for any errors that are made, meaning they would be required to reimburse the estate for penalties and interest that could have been avoided.
What do I do once probate has been received?
Once the Grant of Probate or Grant of Letters of Administration has been received, you can start to close bank accounts and sell assets such as shares and property.
After all of the assets have been liquidated and a period of time has elapsed to give creditors and potential beneficiaries time to make themselves known, you will need to prepare detailed estate accounts and account to the beneficiaries with their share of the inheritance.
If I am an executor do I have to deal with the estate administration?
Dealing with an estate administration can be complex and often very time-consuming. Not everyone is able to take on the task and it is open to you to instruct a probate solicitor to carry out the process on your behalf. Their costs will usually be paid from the estate.
If you would like to speak to one of our probate experts, call us on 01727 220930 or message us at email@example.com