What is Probate, How Does It Work & What Should I Expect?

Losing someone dear is never easy. When somebody close to you dies, sorting out their affairs will often be the last thing on your mind. However, if you’ve been named as an executor in their will, there are certain things you need to do.

What is Probate?

Probate is the legal process of dealing with someone’s estate after they die. This generally involves paying off any taxes or debts they might owe and then dividing up their remaining assets, possessions and money as set out in their will.

Once you’ve taken all the steps involved in registering the death, organising the funeral and had some time to grieve, the time will come to deal with the deceased person’s estate.

Applying for a grant of probate will give you permission to do so in the eyes of the law.

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What is Probate?

Probate is the legal process of dealing with someone’s estate after they die. This generally involves paying off any taxes or debts they might owe and then dividing up their remaining assets, possessions and money as set out in their will.

Before any of the person’s assets - such as cars, houses or possessions - can be claimed or sold, you need to apply for probate.

• If the deceased person left a will, the executor will receive a ‘grant of probate.
• If they did not leave a will, the next of kin will receive ‘letters of administration’.

These are legal documents that give the executor the authority to deal with the deceased person’s property. A grant of probate isn’t needed if their estate is worth less than £15,000 or if their assets are jointly owned and going to a surviving spouse or civil partner.

Who Can Apply for Probate?

If a will has been left, only the person (or people) named as executors can apply for probate. Even if there are multiple executors, only one person needs to apply for probate.

If there is no will, this is called ‘dying intestate. Instead of an executor, someone will be named as an administrator. The process to follow is similar to probate, except the assets will be distributed according to ‘rules of intestacy rather than the wishes set out in a will.

How Does the Probate Process Work?

If you’re an executor of the will, you have two choices - administer the will yourself, or appoint a professional to act on your behalf. If you were to do the probate process yourself, this is the process you’ll likely have to follow.

Step 1: Register the Death

The first thing you need is a copy of the death certificate. You usually have to register a death within five days. It’s a good idea to get multiple copies of the death certificate to speed up the probate process if multiple organisations require an original copy at the same time.

Step 2: Estimate the Estate’s Value

Next, you’ll need to bring together the details of the deceased person’s assets and debts to work out the value of the estate. This will involve tracking any cash in bank accounts, investments or pensions, as well as any money owed in mortgage, loan or tax payments. If the deceased person is leaving behind a house, you’ll need to get that valued too.

Step 3: Apply for a Grant of Probate

The executor of the will must then apply for a grant of probate. This stage is a lot of paperwork, and be aware that there is a probate fee (usually around £215) to pay. You can submit a probate application form online or call the probate application helpline.

Step 4: Complete an Inheritance Tax Return

As you send a probate application, also fill in an inheritance tax form and send it to HMRC to see if the estate has to pay inheritance tax - estates with a value of over £325,000 have to. Always fill in the form, even if you don’t think any tax payments will be due.

Step 5: Close Accounts and Pay Any Debts

Once you have the grant of probate documents, you can settle the person’s affairs. To do this, you’ll need to contact government organisations (such as the DVLA) as well as their bank or building society. In some areas in the UK, you can do this through the government’s Tell Us Once service and UK Finance’s Death Notification Service.

As a general rule of thumb, anyone who the deceased person would’ve had a relationship with - including utility companies, TV or broadband providers or gyms they were a part of - need to know they have passed away.

Outstanding debts must be settled and mortgages paid. Check if the deceased person had any insurance policies that would cover the debts in the event of their death. The estate will be used to pay back any debts so, the debts are not passed onto the next of kin.

Step 6: Distribute the Rest of the Estate

Once all debts have been settled, work out the remaining value of the estate. This is what can be distributed between all the people named in the will as beneficiaries. If there isn’t a will in place, the remaining assets will instead be split up according to the ‘rules of intestacy.

How Long Does Probate Take?

In short, it depends on the complexity of the estate. While you can have the grant of probate documents with you in a matter of weeks so you can start closing accounts, the whole process usually takes much longer - especially if there are houses to be sold.

Typically, it takes between six and twelve months from when the person dies until beneficiaries receive their inheritance. The probate process can also take longer if there are any disputes along the way which slow down how quickly you can administer the estate.

When to Use a Probate Solicitor or Specialist

You’re well within your rights to do the probate process yourself. However, there are circumstances in which you might want to consider using a professional.

For example, if:

• The estate’s value is over the inheritance tax threshold
• The estate is bankrupt, or there are doubts over its bankruptcy
• There is no will in place and, the estate or family situation is complicated
• There are known dependents left out of the will who may want to make a claim
• The deceased person lived outside of the UK or had assets overseas

Using a probate solicitor will undoubtedly come at a cost. But, if there are disputes raised or claims made during the probate process, you may find it beneficial to seek advice and assistance from a professional for peace of mind.

Do I Have to Act As Executor if I Am Named in the Will?

For many people, the role of Executor in the event of the death of a friend or family member can be challenging. If you do not wish to act as an executor, there are two specific options. As long as you have not been involved in the administration of the estate, then you can give up all rights as an executor.

Alternatively, if you no longer wish to actively participate but would prefer to have input as and when required, you can choose to have “power reserved”. This means that initially, you will have no involvement in the administration of the estate, but you can join in at a later date.

There’s also the option of handing over power of attorney to your probate solicitor which might allow them to act more speedily when administering the estate and sorting out any tax liabilities. Even this relatively simple question prompts an array of different scenarios. Take advice!

Is the Probate Process the Same in England, Wales and Scotland?

The regulations/laws regarding probate are the same in England and Wales but different in Scotland. For many years Scotland has had its own legal system, and there are many anomalies compared to the English/Welsh system.

Therefore, if you are involved in obtaining probate for a Scottish estate, you will need to take specific advice. Actions you would normally take in England and Wales could be very different in Scotland, so there needs to be a deep understanding of this new legal landscape.

How Do I Know if I Have to Pay Inheritance Tax?

Inheritance tax is a very specialist area of the financial sector. At the moment the inheritance tax allowance is £325,000 - this is a net figure. The net worth of the estate is calculated by reducing debts from assets.

In theory, if the net figure is above £325,000, then there may well be inheritance tax to pay. However, there is also an array of tax reliefs to take into consideration which could significantly reduce any tax liability. Working out any inheritance tax liability yourself is very dangerous if you have no experience!

Am I Legally Responsible if Things Go Wrong As Executor?

As an executor of an estate, you have a legal obligation to act reasonably and in the best interests of the estate and beneficiaries. Thankfully, there are various parties who will be able to offer advice and guidance with regards to your role.

In the event that you are seen to act irresponsibly or against the best interests of the estate and beneficiaries, you may feel the wrath of legal action. There’s also the possibility that the underlying Will could be challenged in the courts. In this scenario, you would need to take legal advice, the cost of which would be covered by the estate.

If you accept the role of executor of an estate, you need to be fully aware of your legal responsibilities. Ignorance is not an excuse, and if seen to act inappropriately, you may well face legal action!

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