Probate is the name given to the process of ‘proving’ a Will is valid or if no Will is left, it is proving who is entitled to the assets left by the person who has died. Estate administration is given to the process of collecting in the assets and giving them to the beneficiaries (including probate).
What is Probate?
Probate is the name given to the process of ‘proving’ a Will is valid or if no Will is left, it is proving who is entitled to the assets left by the person who has died. The process involves obtaining a ‘Grant’ and there are different types available but the three most common are listed below:
Grant of Probate: where there is a Will and the executors are applying for the Grant.
Grant of Letters of Administration (with the will annexed): where there is a Will but someone other than the executor is applying for the Grant.
Grant of Letters of Administration: where there isn’t a Will and a member of the family is applying.
Probate is often used to describe all three of the above Grants but the catch all term is ‘Grant of Representation’.
How will it help?
A Grant of Representation is required to release the assets left by the person who has died. For example, it will be required to sell their house. A Grant of Representation is normally required if the value of the assets left by the person who has died is more than £5,000. However, some banks will release funds without a Grant even if it exceeds this amount.
How long will it take?
It can take as little as four weeks to obtain a Grant of Representation. However, it can take between six and eight months to administer an estate depending on the complexity. Complex estates can take much longer to administer particularly if Inheritance Tax is due.
What should I consider:
Am I an Executor, Administrator or Personal Representative?
Executor is the name given to someone appointed under a Will and an Administrator is someone named in a Grant either when the appointed Executor isn’t acting or if there was no Will. A Personal Representative is the catch all term to describe both Executors and Administrators.
An Inheritance Tax return is required even if no Inheritance Tax is due. It will either be a IHT205 or IHT400. The type of return required depends on the type of assets left, the individual circumstances and whether or not tax is due.
It is important to consider that Inheritance Tax can be due on gifts made during lifetime as well as on a person’s entitlement to assets held in trust. In the case of someone with assets held abroad, UK tax may be due on everything no matter where it is located. Equally foreign tax may also be due.
There are strict time limits for submitting a tax return and paying an tax due.
Protecting the Personal Representatives
Personal Representatives are responsible for carrying out the estate administration and distributing the assets to the beneficiaries. If they do not locate all of the debts, they can become personally liable to pay the debts. It is possible to protect the personal representatives by placing Statutory Notices to Creditors and this should be considered before making any payments from the estate.