Do we need to go through Probate?
Depending on their value, assets which are held in a person's sole name (property, bank accounts, shares and other investments) will often require a Grant of Probate or a Grant of Letters of Administration before they can be cashed in or sold. Some assets are owned jointly such as a joint bank account or a jointly owned house. Grants are not usually needed for these assets to pass to the surviving joint owner. The value of the share may have to be declared for Inheritance Tax though.
How long does Probate take?
The "Probate" procedure involves the Personal Representatives getting values of assets, taking from this any debt amounts and then sending an Affidavit and details of value of the estate to the Probate Registry. The time involved largely depends on what is in the estate. If there is only a house then it will depend on the housing market and how quickly a sale can be agreed. If there are bank accounts (over £5,000 usually) then you may be able to get the Grant within about one month. If there are shares however if could take longer. The more wide ranging the types of assets there are in an estate the longer it could take. If Inheritance Tax has to be paid, the values of the assets in an estate may have to be agreed with the Inland Revenue and this could take time.
Do we have to pay any tax?
There are three taxes which could apply when administering an estate. There may be Inheritance Tax to pay on the value of the net estate. There could be Capital Gains Tax to pay on the gain in value of certain assets (e.g a house or shareholding investments) between the date of death and the date of sale. Income Tax could be payable on any "income" into the estate since the date of death (e.g. bank interest since the date of death).
What do we do about debts?
If the estate is solvent (there are more assets than debts) then the debts are usually paid off after the Personal Representatives have collected in all the assets once they have obtained the Grant. Sometimes gifts in a Will are left subject to a charge or secured debt. Sometimes a Will sets aside a fund for the payment of debts. A properly drafted Will should provide the Personal Representatives with all they need to know about how debts should be paid from the estate.
Do we need to keep records?
Personal Representatives should keep records of the funds they have collected in and debts they have paid out from the estate. The beneficiaries of an estate may be entitled to see an Estate Account when they receive their share of the estate.
