“National Probate, providing an essential service at such a difficult time”
Frequently Asked Questions people ask about Probate and Estate Administration
1. What is Probate?
Probate is a legal term referring to the submission of a Will to the (Probate) Court for validation and of course along with that, the legal responsibilities (of the Executor) to administer the process of transferring the ownership of the assets from a deceased person to their beneficiaries. (Nb. In Scotland, it’s called Confirmation)
If there is a Will, the executors (the people responsible for dealing with the estate) are usually named in it. They can apply to the probate registry for a 'grant of probate'. If no executors are named, or none of the executors are prepared to act, a beneficiary of the Will can apply to the probate registry for a 'grant of letters of administration (with Will annexed)'. If there is no Will, a relative can apply for a 'grant of letters of administration'.
Once the probate registry is satisfied with the application, the executors or administrators are asked to swear an oath confirming the information they have provided and their commitment to deal with the estate in a right and proper manner.
The grant of probate (or letters of administration) can be shown to anyone who is asked to release any money or other assets belonging to the deceased's estate.
2. Where do I find a copy of the Will?
If you don't already know where the Will is kept, or aren't sure whether you have the latest one, you'll need to try to find it. Check through any paperwork in the house: look in files, desk drawers and in the safe if there is one. You can also check with the deceased's bank in case they have the Will in safe-keeping. Contact any solicitors that the deceased used and ask them if they have a copy of the Will. If you don't know which solicitor they used, you can pay a fixed fee for a Will search to be done. Alternatively, the Will may have been deposited with the probate registry. You can ask for a search to be made by sending a letter together with an official copy of the death certificate.
If you still can't find the Will, it's worth asking anyone else who you think may have been asked to be an executor - typically family or close friends - in case they know where the Will was kept.
Bear in mind that a Will is not a public document until probate has been granted. Until then, only the executors are entitled to see it. A solicitor or the probate registry Will not provide the Will to you if you are not named in it as an executor.
3. How do I know that the Will is valid?
A Will cannot be valid unless it meets four requirements:
1. the individual whose Will it is must have been at least 18 years old when the Will was made
2. the Will must be in writing, signed by the person making the Will in the presence of two witnesses
3. it must have been drawn up when the individual concerned had 'testamentary capacity' - broadly, an understanding of what they were doing
4. the individual must not have been acting under undue influence.
In addition, a valid Will becomes invalid if:
1. the individual makes a later, valid Will
2. the individual gets married or enters into a civil partnership, unless the Will was clearly made with that marriage or partnership in mind
3. the individual deliberately destroys the Will.
If a Will is invalid, then the Will is set aside. The most recent previous Will (if any exists) becomes the valid Will. If there is no valid Will, the estate is dealt with in the same way as if the deceased died 'intestate'.
Similar rules apply to any 'codicils' - documents that change the terms of an original Will. If a codicil is invalid, then the original Will remains in force as it stands, as if the codicil did not exist.
4. What happens if there is no Will?
If there is no Will, then the deceased died 'intestate'. This has two key consequences:
1. As there is no Will, there are no named executors. A relative can apply to administer the estate.
2. The assets must be distributed according to the rules of intestacy.
5. What happens if no executors are named in the Will?
If no executors are named in the Will (or none of the named executors are Willing or able to act) then someone else will normally need to apply to the probate registry to administer the estate. If there is a will, a beneficiary under the Will can apply to act as administrator. If there is no valid Will, one or more relatives will normally be entitled to inherit and can apply to administer the estate.
6. I am named as an Executor but do not want to act as one - what should I do?
You can renounce your executorship - provided that you have not already started dealing with the estate. By doing this, you permanently give up your right to apply for a grant of probate. If there is more than one executor, a more flexible solution can be to apply to have 'power reserved'.
This means that you leave the other executors to act but reserve the right to take out a grant of probate later if you choose: for example, if you later feel that the other executors are not acting as you would wish.
7. The Will names several executors - who does what?
Up to four executors can jointly apply for the grant of probate. Executors who do not wish to act can renounce their executorship or reserve powers. One option is for the executors to act jointly, agreeing their decisions. This can be a rather cumbersome way to deal with the estate, particularly if executors are busy or live in different areas.
More commonly, the executors will agree amongst themselves for one executor to take the lead. This may be the executor who has the most relevant expertise: for example, if one of the executors is a Lawyer. Alternatively, the executors may decide to act together but appoint a Professional Executor to provide advice and deal with the paperwork on their behalf.
8. Why use a Lawyer to help with probate and estate administration?
Acting as an executor is often complex and time consuming. It can also be stressful if you are coping with the death of someone close to you, or you find yourself in the middle of family disputes.
Using a lawyer can be particularly helpful if:
9. What does an executor need to do?
Dealing with an estate can involve a lot of paperwork, particularly if the deceased had significant or complicated financial affairs. In brief, an executor needs to:
10. How can an Executor be sure that all the estate's assets and debts are identified?
Normally assets can be tracked down by checking through all the deceased's paperwork. (Paying particular attention to their bank statements.) Unexplained payments made by the deceased could indicate the purchase of assets, or a gift or loan that needs to be taken into account. Conversely, any unexplained income might indicate some kind of income-producing asset.
A thorough inventory of the contents of the deceased's home will be required and it may be worth checking with close family or friends - particularly anyone the deceased was living with. For example, they might be aware if any valuables are hidden somewhere in the home or kept in a safe deposit box. If the deceased was deliberately hiding assets there may be little or no evidence to show the way.
In terms of debts that need to be paid, paperwork should be carefully checked and close family and friends asked. Also, advertise the death, both locally and in the London Gazette, asking anyone who thinks they may have a claim against the estate to contact you within two months. This helps protect against any future claims.
11. Is it possible to deal with the estate without obtaining a grant of probate?
A grant of probate may not be needed if the estate is of low value. Banks and other organisations are prepared to release relatively small sums after seeing a copy of the death certificate.
Joint assets (such as joint bank accounts) generally pass automatically to the surviving owner. This can include a property provided it is owned as 'joint tenants' - but not property that is owned as 'tenants in common'. Again, a death certificate may be sufficient.
12. How do I apply for a grant of probate?
Around 70% of applications are made using a professional and as such, it is our recommendation that you Contact Us to enable us to administer the estate for you.
Probate application fees are payable and a probate application form PA1 needs to be completed. An inheritance tax form: form IHT205 also needs to be completed. We cannot apply for a grant of probate until the deceased's estate is valued.
Along with the forms, an official copy of the death certificate, the original Will (and any codicils) must be included. An oath must be sworn, confirming that the information given is true and promising to administer the estate properly. An interview at the probate registry might need to be attended.
Before applying, it needs to be decided how many copies of the grant of probate are needed. Additional copies make it easier to deal with all the organisations who may ask to see official copies of the grant. There is a small fee for each additional copy.
13. How is the Estate Valued?
Assets are valued at their market value on the day the deceased died. Probate valuations can be much lower than insurance valuations for some assets, such as jewellery. Valuation of financial assets are usually fairly straightforward, though some financial institutions may charge a fee to provide a probate valuation.
A professional valuation of any house, land or other property will be required. Again, there may be a charge but possible to negotiate to offset this against any fees if using the valuer to sell the property. A professional valuation of other significant items such as cars, works of art or jewellery may be required, unless there is an alternative way of assessing the value. For example, car values can be checked online.
A professional valuation should not be required for ordinary items worth less than £500. More complex situations can arise: for example, if the deceased owned part of a property or business, or trusts are involved. In some cases, a novice executor may find that they have overvalued property or shares which might later be sold. It may be possible to claim relief for this overvaluation if qualifying shares are sold within 12 months or a property within 4 years.
14. When does inheritance tax need to be paid?
Inheritance tax is only payable if the value of the deceased's estate is greater than the inheritance tax threshold. Any inheritance tax becomes due at the end of the sixth month after the death. Inheritance tax in may be able to be paid in installments when the tax is due in relation to certain assets that may prove hard to sell: for example, a property or a controlling interest in a company.
Installments are due in ten equal yearly installments starting from the end of the sixth month after the death. Interest will be payable on the outstanding balance with each installment. The full amount due can still be paid off at any time. The full amount of tax due must be paid immediately if any asset is sold.
The inheritance tax threshold is £325,000 per person and from April 2017, there is an additional nil-rate allowance for main family homes that are passed to direct descendants (children, step children and grandchildren). The allowance is £100,000 in 2017/18, £125,000 in 2018/19, £150,000 in 2019/20 and £175,000 in 2020/21. Any unused allowance can be passed to a spouse, so the potential inheritance tax threshold for a married couple's estate will as of 20/21 be £1 million (2x £325,000, plus 2x £175,000).
Where the value of the net estate (not just the property) exceeds £2 million, this additional nil-rate allowance will be tapered away at a rate of £1 for every £2 of value. So there is no such allowance on estates worth £2.35 million (or worth £2.7 million on the death of a surviving spouse where the full allowance is available to be transferred).
15. What happens with the debts owed by the deceased?
An executor is responsible for paying all the deceased's debts using the money from the estate.
Outstanding debts and bills might include:
Funeral expenses also need to be paid if no pre-paid funeral plan is available. It might be beneficial to advertise the death locally and in the London Gazette, asking anyone who thinks they may have a claim against the estate to make contact within two months. This helps protect the Executor against any future claims from unknown creditors.
It's important not to start distributing the assets of the estate to the beneficiaries before it is are sure you all debts can be paid in full.
16. The estate doesn't have enough cash to deal with all its bills - what can I do?
This is a common and potentially difficult problem. Usually the grant of probate needs to be obtained before any of the deceased's financial assets can be accessed. However, some banks and building societies will release relatively small sums of money for specific purposes - ie. to pay for a funeral.
A larger financial problem can occur with valuable estates where at least some of the inheritance tax needs to be paid before grant of probate. It may be possible to use National Savings, government 'gilts' or money in a bank (or building society) that takes part in the Direct Payment Scheme if the deceased had these. If not, the executors will need to arrange a loan or pay the tax from their own resources, later reclaiming it from the estate. There can be an even bigger problem if the deceased owed more money than the value of their assets. There are strict rules on the order in which creditors can to be paid.
***Warning - If money or other assets are distributed to the wrong person (and if any taxes due are not paid), the executor is personally liable and the following recent case involving a novice executor (Glynne Harris) should be noted:
17. How long does probate take?
In a simple case, probate might only take a few months. Six to nine months is more typical, while particularly complicated estates or contested Wills can drag on for years. All sorts of complications can delay the process, including:
Once the application has been submitted to the probate registry, it is normally expected to receive the grant of probate in about eight weeks - provided there are no problems with the application.
18.What are the typical mistakes made by a novice handling probate?
Executors without prior experience typically underestimate the amount of time and work involved. Additionally, they may not realise that they need to keep clear records. These help the executors keep track of what they are doing.
Beneficiaries, creditors or the court might also ask to see them. A separate bank account should be opened for the estate. Lay executors can be pressured to start distributing money to the beneficiaries early, particularly if there is cash available. This can cause significant problems if there is a need to make inheritance tax payments before other assets can be sold and can be disastrous if the estate has debts that the executors did not know about. Lay executors can be too willing to take things on trust. For example, letting a relative remove an asset which they claim belongs to them.
Evidence should always be required to back up any such claim. It's also easy to misunderstand the meaning of the Will, how the law applies and exactly what different beneficiaries are entitled to. For example, what happens if a named beneficiary has died or an asset mentioned in the Will has been sold?
Dealing with an estate without professional advice is generally considered to be a mistake.
19. As an executor (or administrator) what are the dangers of being sued?
Reasonable care must be taken as an executor could be sued when;
They might face claims from unknown creditors if the death is not advertised. They could also face a claim from someone disputing the Will if assets are distributed that they later establish the right to. Individuals have six months from the date of probate to make a claim.
They could also be sued if they act fraudulently or try to promote their own interests as a beneficiary of the Will.
20. What happens if a Will is contested and who can contest a Will?
Disputes over Wills can arise when a relative or someone who was financially dependent on the deceased feels the Will does not provide adequately for them and or when a beneficiary feels that the estate is not being properly administered. Claims by relatives and dependents must be made within six months of the grant of probate. An executor, may want to wait until this deadline has passed before distributing assets. Otherwise, if a claim was successful, they might need to try to reclaim assets that they have already paid out. As far as claims by beneficiaries are concerned, the risk can be minimised by making sure that the estate is dealt with quickly and efficiently. It's a good idea to keep beneficiaries updated on progress, explaining the reasons if there are any delays.
If there is a dispute, it may be unwise to distribute any assets until the dispute has been resolved, even if the assets have to be managed for longer than expected. Going to court can be expensive and time-consuming, so if a Will is contested agreement should be tried to be negotiated if possible.
21. How to deal with the tax aspects of a deceased person's affairs?
HM Revenue & Customs (HMRC) and the Department for Work and Pensions (DWP) should contact the executor about the deceased's tax, benefits and entitlements if the Government's Tell Us Once service is used. Otherwise, they will need to be contacted directly.
The National Insurance (NI) Contributions Office need to be contacted to cancel the deceased's NI payments if they were self-employed or paying voluntary NI; the Child Benefit Office if a child or the parent dies; and the Tax Credit Office if a partner or a dependant child dies. The DWP's Bereavement Service need to be contacted to cancel the deceased person's benefits and entitlements, eg State Pension. They can also check if help with funeral costs or other benefits are available.
HMRC's bereavement tool can be used to work out which forms to fill in and where to send them. Estates, with a value over £325,000, may also be liable to inheritance tax.
Regardless of the size of the estate, inheritance tax forms must be completed as part of the application for a grant of probate: form IHT205 if no tax is payable, or forms IHT400 and IHT421 otherwise.
22. What happens if some beneficiaries named in the Will have died?
It depends whether the beneficiary who has died was a child of the person whose Will it is, and how the Will is worded. If a potential beneficiary who has died was a child of the deceased, then their entitlement normally passes to their own living children (ie the grandchildren of the deceased), if there are any.
The same applies if the beneficiary was a grandchild (or great-grandchild, etc). If the potential beneficiary was not a child of the deceased, or had no surviving children when the deceased died, then they normally lose their entitlement to inherit.
Any gifts which would have been made to them remain part of the estate. They are dealt with in the same way as other assets. If the Will makes a gift to a class of beneficiaries (eg 'my nephews') then that will normally mean those who are alive at the time of the death. If there are no surviving members of the class, then that gift normally lapses. Alternatively, the Will may specify what should be done if a particular beneficiary has died: for example, saying that a friend's children should share a gift if that friend has died.
A professionally prepared Will should make it clear exactly what the deceased intended and how assets should be distributed if a beneficiary has died. If there is any doubt, take advice.
23. How should the deceased's assets be protected until they have been sold or distributed?
Proper administration Will include ensuring assets are properly protected. Significant assets must be insured - particularly as existing insurance may lapse when the deceased dies.
Existing insurers should be contacted to confirm what the position is and arrange any additional insurance. If the home is now unoccupied, it should be properly secured and any particularly valuable items removed so they can be kept safely elsewhere.
Any appropriate services should be organised to maintain assets: for example, employing a gardener so that a property is in good condition to be sold.
Be aware of the risk of identity fraud. Protective registration in the name of the deceased might be a good idea. (Advice on identity fraud can be found on the CIFAS website.)
24. I am an Executor needing professional help. How do I keep the fees down?
National Probates success has been achieved by specialising in Probate Administration and as such we are able to do so by working for a competitive fixed % fee basis which is significantly lower than many other legal firms who often need to charge more because they do not specialise in Probate thus resulting in the need to instruct specialists such as ourselves and then mark up their costs.
A recent Which report established that the average solicitor charges the equivalent of 2.5% of the estate value. (Our fee’s start from just 1.5%).
Alarmingly however Which also found that the High Street banks where charging what they described as “R.I.P off” fees with Barclays topping the list at almost 5% and the average High Street bank charging 4%. Solicitors, Will Writers and Banks can write themselves into a Will as a professional executor along with the unfair and excessive fees as detailed above which the Testator may not have been fully aware of the cost consequences after their death.
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