Probate Application Process

What is Probate?

Probate is the legal process of administering a deceased person’s estate. This includes verifying the validity of the will, if one exists, and distributing the deceased’s assets in accordance with their wishes or, if there is no will, in accordance with the laws of intestacy. The term “probate” is often used interchangeably to refer to both the process and the document (a “grant of probate”) issued by the court that authorises the executor to manage and distribute the estate.

Why is Probate Necessary?

Probate is necessary to ensure that the deceased person’s assets are distributed fairly and according to their wishes. It provides legal authority to the executor or administrator to settle the deceased’s affairs, including paying off any debts and distributing the remaining assets to the beneficiaries. Without probate, banks, financial institutions, and other asset holders may refuse to release funds or transfer property, leaving the estate in limbo.

Steps Involved in Applying for Probate

The probate application process involves several key steps, each of which must be completed accurately to avoid delays or complications. Below is a detailed outline of these steps:

1. Registering the Death

Before you can begin the probate process, the death must be registered with the local registry office. This should be done within five days of the death, and you will need to provide a medical certificate of the cause of death. Once registered, you will receive the death certificate, which is required for various aspects of the probate process.

2. Locating the Will

If the deceased left a will, it should be located as soon as possible. The will typically names the executors who are responsible for administering the estate. If there is no will, the estate is considered intestate, and the court will appoint an administrator, usually a close relative, to handle the estate.

3. Valuing the Estate

Valuing the estate is a crucial step in the probate process. This involves identifying and valuing all assets and liabilities of the deceased, including property, bank accounts, investments, personal belongings, and any debts or liabilities. Accurate valuation is essential for calculating any inheritance tax (IHT) that may be due.

a. Property Valuation

For property valuation, it is advisable to obtain professional appraisals to ensure accuracy. Estate agents or chartered surveyors can provide a reliable market valuation of the deceased’s property.

b. Financial Assets

Financial assets such as bank accounts, investments, and pensions must be valued based on their worth at the date of death. Contacting banks and financial institutions will provide the necessary account balances and statements.

c. Personal Belongings

Personal belongings, including jewellery, vehicles, and household items, should also be appraised. Some items may hold significant sentimental value but may have a different market value, which must be assessed for probate purposes.

4. Paying Inheritance Tax

Inheritance tax (IHT) must be calculated and paid before probate can be granted. The current threshold for IHT is £325,000, above which the estate is taxed at 40%. There are various exemptions and reliefs available, such as the residence nil-rate band and charitable donations, which can reduce the IHT liability.

a. Completing the IHT Forms

Completing the relevant IHT forms is a critical part of the process. For estates above the IHT threshold, form IHT400 must be completed, while form IHT205 is used for estates below the threshold. It is important to ensure all information is accurate and complete to avoid penalties or delays.

b. Paying the IHT

IHT can be paid in instalments over ten years for certain assets, such as property, but the first instalment must be paid before probate is granted. The HM Revenue and Customs (HMRC) website provides guidance on payment options and deadlines.

5. Applying for Probate

Once the IHT has been paid, the next step is to apply for probate. This involves submitting the probate application form (PA1P for executors or PA1A for administrators) along with the original will (if applicable), the death certificate, and the IHT forms to the probate registry.

a. Online Application

The probate application can be completed online via the government website, which simplifies the process and allows for faster processing times. Alternatively, paper applications can still be submitted by post.

b. Application Fee

There is a fee for applying for probate, which varies depending on the value of the estate. Currently, estates valued at over £5,000 are subject to a fee, while those below this threshold are exempt.

6. Grant of Probate

Once the application is submitted and approved, the probate registry will issue the grant of probate (for executors) or letters of administration (for administrators). This legal document provides the authority to manage and distribute the deceased’s estate according to the will or the rules of intestacy.

7. Administering the Estate

With the grant of probate in hand, the executor or administrator can begin the process of administering the estate. This involves several key tasks:

a. Collecting Assets

The executor must collect all assets of the estate, including closing bank accounts, selling property, and gathering personal belongings. This step may involve contacting various financial institutions and asset holders to transfer ownership to the estate.

b. Paying Debts and Liabilities

All outstanding debts and liabilities of the deceased must be settled before distributing the estate. This includes paying off mortgages, credit card debts, utility bills, and any other financial obligations.

c. Distributing the Estate

Once all debts and liabilities have been settled, the remaining assets can be distributed to the beneficiaries as specified in the will or according to the rules of intestacy. This may involve transferring property titles, distributing funds from bank accounts, and ensuring all beneficiaries receive their entitlements.

8. Finalising the Estate

The final step in the probate process is to ensure all legal and tax obligations have been fulfilled and to prepare a final account of the estate. This includes:

a. Final Tax Returns

The executor must file final tax returns for the deceased, including any outstanding income tax or capital gains tax. It is important to ensure all tax liabilities are settled to avoid future issues.

b. Estate Accounts

Preparing a detailed account of the estate, including all assets, liabilities, income, and expenditures, provides transparency and accountability. Beneficiaries should be provided with a copy of the estate accounts for their records.

Common Issues in the Probate Process

While the probate process is generally straightforward, several common issues can arise that may complicate matters:

Disputed Wills

Disputes over the validity of a will can significantly delay the probate process. Common grounds for contesting a will include claims of undue influence, lack of testamentary capacity, or improper execution. Resolving these disputes may require legal intervention and can be time-consuming and costly.

Missing Beneficiaries

Locating all beneficiaries named in the will can be challenging, especially if they have moved or changed contact details. Efforts must be made to trace missing beneficiaries, which may involve hiring a professional tracing agent.

Insolvent Estates

If the estate’s debts exceed its assets, the estate is considered insolvent. In such cases, the executor must follow specific procedures to ensure debts are paid in the correct order of priority. Beneficiaries may not receive any inheritance if the estate is insolvent.

Complex Assets

Complex assets, such as foreign property, business interests, or digital assets, can complicate the valuation and distribution process. Specialist advice may be required to handle these assets appropriately.

Delays in Grant of Probate

Delays in receiving the grant of probate can occur due to incomplete or inaccurate application forms, disputes, or backlog at the probate registry. Ensuring all documentation is complete and accurate can help minimise delays.

Conclusion

The probate application process is essential for managing a deceased person’s estate. It involves several intricate steps and fulfilling legal and tax obligations to ensure that the process runs smoothly and the deceased person’s wishes are honoured. At DLS Solicitors, we are dedicated to providing expert guidance and support throughout the probate process. Whether you are handling a simple estate or a more complex situation, our experienced team of solicitors is here to assist you every step of the way.