What is probate?
Probate is a catch-all term that covers the formal process of ensuring that the estate of a person recently deceased is appropriately managed and that an appointed person (or persons) has the right to act on behalf of the deceased.
There will likely be financial assets that the deceased has left to certain beneficiaries, there may be financial debts to understand and so the probate process will ensure that all affairs relating to the estate are finalised before anything can be distributed.
If there is a Will, then the Grant of Probate needs to be determined by the court. This ensures that the Will is valid, and that the executor has the appropriate rights to manage the estate.
If there is no Will, this is called intestacy, and the deceased’s estate is handled by an appointed administrator. The court will issue a Grant of Letters of Administration to the administrator which ensures they can carry out their duties.
The Stages of Probate
Stage 1: Contacting the Asset Holders
This stage involves contacting banks, insurance companies, utility providers, pension companies and others in order to let them know of the death. Each of these ‘Asset Holders’ will be able to provide a valuation of the assets they hold, which are important for income tax and inheritance tax reasons. These valuations form the basis of the Inheritance Tax Form which needs to be completed further on.
Stage 2: Applying for a Grant of Probate or Letters of Administration.
If the deceased person has left a Will, you will need to apply for a Grant of Probate. If they did not leave a Will, you will need to apply for Letters of Administration.
When applying for either, you will need to also complete the HMRC Inheritance Tax form and the Statement of Truth form and include both in your application. The HMRC will issue you a stamped summary of the tax calculated and paid. This summary is needed to ensure you can apply for either the Grant of Probate or letters of administration.
Once the Inheritance Tax form has been approved and returned stamped from the HMRC, the application can then be made for the Grant of Probate or Letter of Administration. A notice will need to be placed to advertise the death.
Stage 3 – Informing the Asset Holders and Applying for Funds
To ensure that assets can be released in a timely fashion, an official copy of the Grant of Probate or Letter of Administration needs to be sent to the Asset Holders and a request for funds to be released from them needs to be made.
Once any assets have been released, debts of the estate must be paid first. These could include costs such as funeral costs, tax bills, care accounts, credit card balances, loans and finance, utility bills or household bills.
Stage 4 – Distributing the Estate
Once any debts have been paid, then the estate can be distributed amongst the beneficiaries.
Stage 5 – Keeping Estate Accounts
Estate accounts should hold any documents which confirm how assets and money were distributed from the estate, as well as details of any debts that were paid. All beneficiaries need to have a copy of the accounts.
Records need to be accurately maintained as they can be requested by HMRC for up to 20 years afterwards.
Getting legal advice
If you have any concerns about any part of the probate process, it is important to reach out as soon as possible to ascertain how our team of probate solicitors can help you to navigate the process efficiently. Depending on the complexity of the estate, administration can exceed 1 year.