What is Probate?
We live in the hope that our estate will simply be handed over to our loved ones when we pass away without any hassle, but it’s not always that simple and there are a few legal procedures that may need to be completed. One of these is probate.
What does probate mean?
Probate is the process in the UK by which a deceased person’s estate is managed after they die. The right to probate is requested typically by one of the heirs to the estate or by a solicitor and they become the executor of the will. The executor is responsible for making sure the estate is divided legally and by the wishes laid down in the will of the deceased.
The process of probate is essentially to ‘prove’ the will in a court of law, meaning that it is accepted as a true, valid document that represents the final wishes of the deceased.
How does probate work?
The probate process is a five-stage operation:
Stage 1 – Applying for probate
First of all, someone must apply for probate. This can be one of the heirs, a third-party who is trusted by the family or heirs, or a solicitor working on behalf of the heirs. They are usually listed as the ‘executor(s)’ within the will and are tasked with the responsibility of handling and distributing the estate left behind by the deceased. Due to the complicated nature of some of the duties involved – such as handling inheritance tax and valuing the estate – it is often recommended that a trained solicitor takes control of the majority of the financial issues.
How much does probate cost? It costs £215 to apply for probate if the estate is valued at £5,000 or above. Should the estate be valued at £4,999 or less, then there are no fees to pay. Bear in mind that extra copies of the probate cost £1.50 each, if you want to send them to more than one organisation at a time.
Probate can be applied for simply on the GOV.UK website.
If a solicitor has been chosen to be the executor of the will then there will be their fees in addition to the minimal probate fee. These could run into thousands of pounds if the estate and will are complex, and it is important that the responsibility for paying these fees is determined and agreed beforehand – is one of the heirs choosing to employ the solicitor and pay for it, or is it expected that the money comes from the estate?
If more than one person believes they should apply for probate, then it is important to communicate fully before doing so. In some cases, of course, there is animosity or a lack of trust between parties, in which case it is important to obtain legal counsel as soon as possible and get the solicitor to act as an executor. The best way to avoid any disputes or animosity is to state your preferred executor(s) clearly within your will.
Stage 2 – Valuing the estate
The executor should administer and value the total of the estate. This means identifying all assets, no matter how seemingly insignificant, and determining their monetary value accurately.
It is important that the executor shows some common sense and careful thinking at this stage – many mistakes have been made where the value of items has been significantly misinterpreted. Take, for example, a collection of comics – to someone not interested in the items, they could look like a box of valueless nostalgia, but to a collector, they could run to thousands if not hundreds of thousands of pounds worth of value.
Other financial assets such as shares, or life insurance policies should be found (or confirmed to not exist) by the executor.
While it is normal for the will to dictate any assets of value, sometimes these things are overlooked or obtained after the will was written and to not thoroughly investigate can cause problems later.
It’s also important that the value of the estate is calculated accurately, because if it totals an amount that is above the nil rate band (which is £325,000 in 2020), then inheritance tax will need to be paid at 40% on anything above that threshold.
Stage 3 – Paying inheritance tax
If there is any inheritance tax to pay then this must be done right away (or, in the very least contact HMRC if there is a problem in paying the bill).
Life insurance placed in trust can be used to cover the expected inheritance tax and there may be a policy in place for this purpose.
It could be that the inheritance tax bill is large enough that the only way to pay it is for the sale of any estate property to be undertaken. It is the job of the executor of the will to see that this happens, although it would be usual that it was done in discussion with the heirs in case other alternatives are desired and can be reached.
Note: If you are an executor and feel that you’re out of your depth when attempting to deal with these issues, it’s always best to contact a solicitor before things go wrong.
Read more: How to Avoid Inheritance Tax Legally
Stage 4 – Other debts
Any other debts and bills should also be paid for from the estate. Like inheritance tax, this may require the liquidation of some of the assets from the estate, but communication with creditors may result in a much easier process.
If the estate does not have enough assets to cover the debts, then some creditors will be left short, but there is no requirement on any of the heirs, the executor of the will, or any other person to cover these debts and they will be cleaned once the process of probate is complete.
As explained previously, many choose a solicitor as the executor of their will because they are far more experienced and better equipped to deal with these financial issues.
Stage 5 – Dividing the estate
The final stage of probate is to distribute the assets to the beneficiaries as directed in the will. Once completed, the process of probate is finished.
How long does probate take?
Despite the grant of probate usually being received within three to four weeks following the oath swearing, the entire process of probate can take between six and twelve months. There is no set timescale and it can vary quite considerably between each case.
If the circumstances surrounding the will and estate are straightforward, probate will usually be granted without much hassle, but some situations can become complicated and may take longer.
What are intestacy rules? When is probate not required?
If you die without a will then your estate is handled by the laws of intestacy. In this case, there is no need for probate although someone should become an administrator of the estate in a similar way to see that the assets are properly managed.
For more information on intestacy and what the process is if there is no will, read our guide on wills here on Compare UK Quotes.
If you die without a will, your estate is handled by the rules of intestacy. In this case, there is no need for probate although someone should become an administrator of the estate in a similar way to see that the assets are properly managed.
The rules of intestacy will not take your wishes into account when distributing your estate, which is one of the main reasons why it is so important to have some sort of legally valid will in place. Intestacy rules usually mean that the surviving civil or married partner will receive most – if not all – of the estate left by the deceased, but of course, this might not represent their true final wishes.
How to avoid probate completely
You are able to avoid probate in the UK by placing your assets in a trust, which you can get help with at Wills.Services – a professional will writing service.
A trust is a safe way of ensuring that your assets are also used in exactly the manner in which you intended – for example, you could set up a trust consisting of £20,000 that must only be used for a deposit on a house and can only be released to the beneficiary when they are buying their first home (on a certain date).
Trusts can provide you with the peace of mind in knowing that its contents – whatever they may be – will be used in a way that represents your wishes.
How much money before probate is required? Do I need probate for a small estate?
If there is a will then probate is required before the estate can be managed by anyone – the value of the estate is not a factor. It is free to apply for probate on estates valued at under £5,000, so there is no difficulty in doing so.
Remember, an estate that has a low monetary value may carry a significant sentimental value, so it is always important to apply for probate and take care of the assets properly.
What is the probate time limit?
There is no limit set on applying for probate itself, however, any inheritance tax must be paid within six months of the death and this may have an effect on the timescale for applying for probate.
Can I appoint the executor of my will before I die? Is probate required in this case?
You can specify who you would like the executor of the will to be in the will itself – often, this is a spouse or your solicitor, depending on the complexity of your situation. Probate will still have to be applied for as usual but there is unlikely to be any conflicts regarding who should step up to become the executor.
You must discuss your wishes with your proposed executor prior to writing their name into your will in this way – if you are in any doubt then discuss this with your solicitor when you write the will.
Bear in mind that the executor faces a number of time-consuming and often complicated tasks – such as handling inheritance tax, valuing the estate and distributing it – so it’s always worth having a solicitor as one of your executors to take care of all issues without making any errors.
Write a will online today!
To start the process of writing a will today, head over to Wills.Services.
You’re simply required to enter the relevant details in an online tool, following which their team of qualified professionals will progress the will. Once it has been processed, you will receive the completed will by both email and post.
At CUKQ we are keen to help you with every aspect of your personal finance, up to and including the division of your assets to your heirs. Please browse our library of informative articles for more information on wills in the UK, life insurance, inheritance tax and everything else you need to know about personal finance and insurance.