Probate is the process that involves the administration of a deceased’s Estate. It involves distributing assets, such as money, property and sentimental items, as well as clearing any debts due in accordance with their Will if they have one.
Who can carry out probate?
If you are specified in the Will as an Executor, then you can execute probate. You can either do this yourself or appoint a professional licenced to undertake Probate Services to act on your behalf and take the responsibility from your shoulders. In many cases a person may appoint joint executors to share the workload or avoid family conflict and each executor will need to work together to ensure probate is managed effectively.
What if there is no Executor?
If there is no named Executor who is willing or able to act, then someone will become an Administrator of the estate. Who can undertake this task is strictly laid out in law, and is often a beneficiary of the Estate.
What does the Executor need to do?
Initially you will need to locate the deceased’s Will if they have one. Before applying for Grant of Probate via the local Probate Registry Office, the executor will need to calculate the entire estate’s worth and work out what Inheritance Tax (IHT) is owed. This is broadly at 40% of the value of the estate that is over the Nil-rate band threshold which is currently £325,000 after deducting any other reliefs and exemptions that may be available.
An Executor cannot receive a Grant of Probate without first settling any inheritance tax (IHT) that is owed. Once they have calculated IHT due on the estate the Executor must then pay HMRC. In some cases, a life insurance policy will have been written to cover inheritance tax liabilities.
The Grant of Probate will make it possible for the Executors to access the deceased assets, although it will not be required if the estate is relatively small and the banks/building societies are happy to distribute funds without it. Also, any property owned as beneficial joint tenants will pass automatically to the survivor without the need for a Grant of Probate.
Once a Grant of Probate is obtained the Executors will need to move on to settling any other debts and closing any bank accounts. If a mortgage has not been repaid/settles, then life insurance policies will usually cover this cost. Upon completing settlement of any debts, the remainder of the estate is split between the beneficiaries according to their share stated on the deceased’s Will, or by the rules of intestacy.
How long does probate take?
The length of time will depend upon the complexity of the estate and how much time the Executor has available to dedicate to dealing with probate. On average however, it tends to take between six to nine months and amounts to around 80 hours of work.
By appointing a professional Probate Service provider, it is likely that the whole probate process will run much smoother and quicker, especially when dealing with complex inheritance requirements. Areas such as understanding tax liabilities and the treatment of gifts, passing on assets intact rather than liquidating them to mitigate capital gains tax liabilities are all examples of where a specialist will ensure asset values are maximised.
How does probate work when there is no Will?
It is estimated that only 45% of people have a Will, so quite often there will be no Will to follow. When someone dies without a Will there are separate rules which are applied, and this is otherwise known as dying intestate.
If someone dies intestate, then the Administrator of the estate applies for Letters of Administration (as opposed to the Grant of Probate) and the estate is apportioned according to strict rules and legislation will decide how to distribute the estate depending on which relatives have outlived the deceased.
How can we help?
HWB is one of the first accountancy practices in the region to obtain a licence from the Institute of Chartered Accountants in England and Wales to undertake probate work. We offer a bespoke, cost-effective and professional probate service that covers all aspects of estate administration for our clients. Our service is flexible so you can choose for us to assist with as much or as little as you need.
If you would like to find out more about our Probate Service and Estate Planning advice contact Stacy Steele on 023 8046 1234 or email firstname.lastname@example.org