|Introduction||How Long Does It Take?||What Taxes Are Due|
|What is Probate?||How Much Does It Cost?||How To Choose A Solicitor|
|What Documents Are Needed?||What Happens With The Bank Accounts||Get In Touch|
Losing a loved one is always hard and is made more difficult when you have to take care of their property, money and debts after their death.
One of the most important parts of the administration process is obtaining probate. If you are the person appointed to take care of the paperwork, probate can seem complex. To help you understand the processes involved during this difficult time, we have written this useful guide to probate.
What Is Probate?
Probate is a legal term which is used to describe the process of officially proving a will, which involves submitting the will to a court for validation. However, in general, the term 'probate' is commonly used throughout the process of the management of a person’s estate when they die.
When the court validates the will, they will issue the Grant of Probate document. This is a formal document which the executors can use to prove their authority to handle all aspects of the deceased's estate. The Grant of Probate will be required when assets are sold, such as the deceased's home. The Grant of Probate will enable the executors to access bank accounts, arrange finances and share the estate according to the deceased's will.
If the deceased did not leave a will, their death will be described as intestate. In these situations, the personal representatives need to apply for letters of administration, rather than a Grant of Probate. The document can be used to prove that they are the administrators of the deceased's estate, in the same way as a Grant of Probate. It isn't always necessary to obtain probate and file an inheritance tax return. This will be determined by various factors, including ownership of the assets, the value of any assets and whether a will was left.
What Documents Are Needed?
Once the executors have completed the filing of the inheritance tax return, the next stage is to apply for probate, if required. You will need to complete a PA1 form, which is known as a probate application form.
The PA1 form, original will, two copies of the will and the death certificate should be sent to the probate registry office. You will also need a statement for the executors.
How Long Does It Take?
There is no definite answer, as the time it takes varies between estates. Those which are high value or complex will take longer to complete than simple estates. In general, it usually takes between 9 and 18 months. The majority of time will be spent gathering information about the various liabilities and assets.
Once probate is granted, the beneficiaries will be provided with their inheritance quite quickly. However, if there are any disputes between beneficiaries or creditors, it could take longer.
How Much Does It Cost?
The fee charged by a solicitor will vary depending on the complexity of the deceased's estate. Every estate is unique, so there is no simple pricing structure for solicitors to follow. In general, there will be separate fees for obtaining the Grant of Probate and administering the deceased's estate, when the Grant is provided.
When you apply for a Grant of Probate there is an application fee to pay, which is usually set at £215.00. The probate registry office can provide additional copies of the Grant of Probate, for a fee of 50p per copy. It is advisable to obtain at least two copies, as the executors will then be able to send the Grant of Probate to all necessary institutions at the same time.
Depending on the estate, there may also be additional costs involved. These vary between estates, but could include costs such as insurance, valuation fees and brokerage fees.
What Happens With The Bank Accounts?
Once probate is granted, the executors can begin to administer the estate. This will include paying any debts and distributing any assets.
Assets which fall below a threshold can usually be transferred without a Grant of Probate, although this can vary between banks. Any assets which are held jointly, such as a joint bank account, will automatically pass to the survivor, which means a Grant of Probate is not required.
What Taxes Are Due?
Before the executors of an estate can apply for probate, the estate needs to be valued and an inheritance tax return will need to be completed.
If the estate is low in value or there is a spouse exemption in place, there will be no taxes to pay. The administrators or executors will be required to file an IHT205 account, which is a short version of the standard inheritance tax return.
If there is inheritance tax due, the administrators or executors will need to complete the IHT400 inheritance tax return. This should be filed within 12 months from the end of the month when the death happened. For example, if the death happened on July 5th 2019 the inheritance tax return will need to be completed by the end of July 2020.
The inheritance tax is calculated as 40% of the value of all assets owned by the deceased. Although, some assets and gifts may be exempt from inheritance tax. Any large gifts which were made in the 7 years prior to their death may also be included in the deceased's estate for inheritance tax calculation.
Assets which are exempt from inheritance tax include property owned by a business, agricultural property and non-UK assets which are owned by a person who has not lived in the UK for more than 15 years. The gifts which are not included in inheritance tax returns include those given to charity and gifts between spouses.
Each person is provided with a tax-free amount, which is currently £325,000. If the deceased leaves property to their descendants, an additional amount is allocated. Although, if the total value of the deceased's estate exceeds £2 million, this amount will reduce.
In married couples, if the tax-free amount is not used during the death of the first spouse, the unused amount can be claimed upon the death of the second spouse.
How To Choose A Solicitor
The probate process and rules surrounding inheritance tax are complex, so it is always advisable to seek professional advice and assistance from qualified solicitors. An experienced probate solicitor will be able to work with the deceased's personal representatives, to guide them through the probate process quickly and efficiently.
The probate process could take up to 12 to 24 months and it can be a difficult time for all families. It is not uncommon for families to disagree and arguments are not unusual. A probate specialist will be able to ease any issues by providing professional advice.
Due to the complexities involved in the probate process, it is always advisable to engage the services of a probate specialist. At Bowsers Solicitors, our team has many years' experience in managing the entire probate process and will be able to guide you through every aspect of the estate’s administration. To find out more, please contact our team today.
Get In Touch
If you would like to find out more about the probate process our team are always available to answer your queries. With over 150 years of local experience in the Fenland area, we are the ideal team to help you through this process. To find out more, please contact us today.