To probate or not to probate, that is the question... whether it is required or not, it's important to know about the legal procedure and how it can help you save serious money — especially during a time of great emotion such as bereavement.
SoGlos caught up with Tayntons Solicitors' private client solicitor, Adam Hampson, to get the lowdown on the probate process.
Firstly, how do you determine whether probate is necessary for a particular estate — do you need probate for a small estate?
You determine whether probate is required by assessing the assets of the estate. Normally when a person owns property, the grant of probate will be needed to transfer or sell the property.
The exception is when the
property is owned as joint tenants; probate will not be required as this passes by survivorship. The same principle applies to joint bank accounts — these
pass independently of a will and become the survivor’s sole account and so probate
will not be needed.
For cash assets such as sole bank accounts, ISAs and premium bonds, it will depend on the value at the date of death. Banks and financial institutions will each set their own limits on when the Grant of Probate would be required. Given that this limit varies from bank to bank, it is worth checking the limit for each institution.
Could you walk us through the probate process and its key stages?
The first step is to identify all the assets and liabilities
the deceased had at the time of their passing to value the estate accurately.
If the estate requires it, you will need to send an Inheritance Tax Account to HMRC and pay any inheritance tax due. This is followed by applying to the Probate Registry for the grant of probate.
Once the grant of probate has been received, you can then sell or transfer the deceased’s assets and pay the liabilities, including any additional tax. It is important to note that although you may have paid Inheritance Tax, you should also be aware of potential Income or Capital Gains Tax liabilities.
The final step is to distribute the assets to the beneficiaries of the estate.
What are the typical timeframes and what does it cost?
Probate is a lengthy process and time is spent waiting for third parties to provide or process information. The Probate Registry are currently quoting 16 weeks alone to assess an application. Generally, the process takes around 12 to 18 months to complete, depending on the complexity of the estate.
At Tayntons, there are a couple of options available to personal representatives. We can assist with applying for the Grant of Probate only at a fixed fee of £1,500 plus VAT and disbursements. This option is only available in cases where no full Inheritance Tax Account is required.
For more complex situations, or where the personal representatives prefer, we can undertake a full Estate Administration Service. Our fee is calculated on an hourly rate basis with an estimate given at the outset and updates provided as the matter progresses.
What are the common challenges that arise during the probate process and how do you typically handle them?
It can often be challenging to value certain assets; these can range from farms to property and businesses.
Thanks to our experience in handling such matters, we have built up an extensive network of contacts to assist with these valuations.
It can also be equally as challenging to locate assets or beneficiaries in many cases. Again, we have a very good network of tracing agents that can help.
Can you explain the role of an executor or administrator in the probate process and what responsibilities do these roles entail?
An executor will act under a will and an
administrator will act where there is no will in place, or where there is a will but all named executors have died or renounced. Executors or administrators can be referred
to collectively as personal representatives.
The executors/administrators of a will have many responsibilities: firstly, to locate and identify the assets and liabilities of the estate; then to deal with the administration of the estate by collecting these assets and settling liabilities, including all claims, debts and taxes. They can then arrange for the distribution of the estate as per the will or if there is no will, the intestacy rules — these determine who benefits from the estate, which depends on the relatives that survive the deceased and the size of the estate.
Can you discuss your experience handling complex probate cases and any strategies you employ to navigate them successfully?
Every probate case is different — adopting a one-size-fits-all approach would simply not suffice. It is vital to remember that while we deal with this every day as probate practitioner. A family has lost a loved one, so compassion and empathy are essential.
Gaining experience in complex probate cases allows you to develop a deeper understanding of the different situations and applicable laws that affect an estate. This understanding translates into more sound and concise advice, provided to personal representatives in trying times.
Can you share any notable success stories or case studies from your experience?
We were recently approached by an executor who was initially considering completing the probate process herself for her mother’s estate. She was of the view that the estate was taxable and had calculated that the amount of tax due was £210,000.
Her father had died in the 1980s and left everything to her mother. The executor assumed that because it was so long ago, this would not be relevant to her mother’s estate. We advised her that she could use her father’s unused nil rate band — which refers to the amount of your estate that can be passed on to your beneficiaries free from inheritance tax after you die. In this case, even though the executor's father died before the resident's nil rate band was introduced, she could use this too.
This saved the executor £200,000 in inheritance tax and is a
great example of the benefits of taking legal advice.
