What is probate?
Probate is a term used for the legal document you require in order to deal with the estate. The legal document will be referred to as a grant of probate if there is a Will or grant of letters of administration if there is no Will. It gives those who are responsible permission to deal with the estate when the value of the estate is over £5,000 after the funeral costs have been deducted. However, certain assets such as shareholdings and life policies may require the grant even if the estate is under £5000.
Is there a Will?
The Will should appoint executors who are responsible for managing the estate.
What is an executor?
The person outlined in the Will who is responsible for dealing with the deceased’s estate. It is a position which carries duties and responsibilities. If the executor is not sure about the deceased’s financial dealings they should consider placing statutory advertisements which are legal notices to protect the executor against unknown creditors.
What is an estate?
An estate is the value of the deceased’s assets less any debts, such as the funeral account.
If there is no Will
If there is no Will the individual has ‘died intestate’ therefore any assets will be split according to the rules of intestacy. These rules set out who is entitled to share in the estate in a fixed order. The same rules will apply if a Will is not legally valid. Any Will or intestate estate is capable of being varied if all beneficiaries are in agreement. Please speak to one of our team for more information.
Grant of representation
To gather in certain financial policies and bank accounts you must apply for a ‘grant of representation.’ This means you will be officially appointed to carry out the expressed wishes according to the Will or rules of intestacy and distribute the estate.
You will need to complete the relevant forms and have all the figures to hand. In some complex cases this could take several months. Your legal advisor can help with your application and present the correct evidence in order to speed up the process.
A grant of representation may not be needed if any assets are jointly owned. You will need a copy of the death certificate to establish how much the estate is worth and if assets can be obtained without a grant of representation.
Inheritance tax must be paid before a grant of representation is issued. If it is not paid within six months after the person’s death, interest will be applied and additional financial penalties may be incurred. In some cases the tax can be paid in annual instalments. The rates of inheritance tax can be confusing but your legal advisor will be able to guide you through the process ensuring you comply with rules set by HM Revenue and Customs.
Distributing the estate
Once any property is sold and monies are collected in, the debts should be paid. Estate accounts should be produced showing monies coming in and going out of the estate. All beneficiaries should be named in the accounts and their entitlement documented. Once any outstanding debts have been paid the estate can be distributed to those who are named in the will or under the rules of intestacy.
If inheritance tax is paid, all paperwork should be kept until HM Revenue & Customs have sent a letter of clearance (stating all their enquiries are complete). This can sometimes take a number of months after the grant of representation has been issued.
If there is a potential challenge to the estate, time limits can apply in which to bring a challenge, based on the date of the grant of representation. A member of our team will be able to assist further with advice around this.
If you would like to speak to member of the specialist probate and estate administration team here at Stephensons please call us on 0203 837 3658 and we would be happy to discuss your situation and how we can help. You can also complete our online enquiry form and we will contact you directly.