Know the legal process for when you or a loved one passes away
A will is an important part of life. It secures assets for your loved ones when you die and ensures they’re distributed to the right people. Probate is the process of validating and carrying out a will when someone dies, passing assets on to another person or party.
Here, Beaumont Legal’s Wills & Probate team answer some questions about the process.
When is probate required?
A Grant of Probate is the name for the legal document appointing executors or administrators to deal with the estate in question. It’s the legal document that’s used to distribute assets and settle debts.
A Grant of Probate should be obtained for any estate worth over £5,000 in total. In practice, however, most financial institutions, such as banks, will have a limit that they’ll pay out without requiring a Grant. This is often more than £5,000. If the person who’s died owned a property either solely or jointly, then a Grant of Probate would also be required to sell or transfer the property to another party.
What are the steps you need to take with probate?
The ‘probate’ process can be very complex and will vary from estate to estate. This means the steps involved will not be the same for all cases, as some may require additional work along the way. The general process, though, is this:
- Your solicitor collects all information about the value of the estate and its details
- They’ll then sort an Inheritance Tax return and pay any tax due
- You’ll need to swear an oath before we submit your application to the Probate Registry
- Once the Grant is issued, it will be sent to all relevant financial institutions (such as banks), so they can release funds. Once funds are received, outstanding liabilities will need to be paid
- Next, the distributions owing to each beneficiary of the will are outlined
- The final distributions can be made to the beneficiaries once the estate accounts are approved by all executors of the will
Does tax play a part in probate?
It can. Inheritance tax is a tax applied to assets when someone dies. When someone inherits money – for example a child inheriting an estate after their parents’ death – the value of the estate can be taxed. Tax is applicable if the estate’s value is over a certain amount, or if it isn’t the parents’ primary residence.
What is the tax-free threshold?
The tax-free threshold for the current tax year is £325,000, which means your estate won’t incur inheritance tax if it’s under this amount. There is also a new tax-free allowance that applies if you pass your primary residence on to your direct descendants. From 2020, this can increase your tax-free allowance to £500,000, meaning a married couple can benefit from up to £1 million of inheritance, tax-free.
Some things are exempt from inheritance tax, including wedding gifts, and the amount of inheritance tax due can be reduced in many circumstances. It can be complicated, but only a small percentage of estates are considered large enough to incur inheritance tax.
How to I obtain a Grant of Probate?
To get a Grant of Probate, you’ll have to complete an inheritance tax return and pay any tax due on the estate, if there’s any owing.
Beaumont Legal’s solicitors can assist with both the tax return and the application process, so feel free to contact us and we can talk you through the steps involved.
Do administrators and executors have different roles when it comes to probate?
The term “executor” is used when a person is appointed by a will and the term administrator is used when a person is appointed under Intestacy Rules because the deceased passed away without leaving a will. They are effectively the same role.
How long does probate take?
An average estate will take around 3-6 months to complete, but it is not uncommon for it to take much longer for complex or high value estates, often up to 1-2 years.
What’s the next step?
A solicitor can help you with the probate process, fine-tuning the legalities and assisting with the Grant of Probate. While a person can legally carry out probate without a solicitor if the estate is worth less than £5000, Citizen’s Advice recommends you use a solicitor for the following reasons:
- If the terms of the will aren’t clear
- Part of the estate needs to be passed on to beneficiaries under the age of 18
- Money has been left in a trust by the person who’s died
- Property or land was owned abroad by the person who passed
- The person who has passed owned a business
- If it seems anyone is likely to dispute the will