What is probate?
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.
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.
It costs £215 to apply for probate if the estate is valued at £5,000 or above (although these fees are changing to a scaled system in the near future). Should the estate be valued at £4,999 or less, then there are no fees to pay.
Probate can be applied for simply on the UK Gov 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.
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.
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.
If the value of the estate comes above the nil rate band (£325,000 in 2019), then inheritance tax will need to be paid.
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.
For more information on inheritance tax, placing life insurance in trust to pay for it, and other details, please read our articles on the subject.
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.
Stage 5 – Dividing the estate
The final stage of probate is to divide the assets to the heirs as directed in the will. Once completed, the process of probate is finished.
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.
How much money before probate is required? Do I need probate for a small estate?
If there is a will then probate is required – 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.
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. 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.
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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. For more information on UK wills, life insurance, inheritance tax and more please read our library of informative articles.