The content below applies to the estates of persons domiciled in England and Wales only.
What is Probate?
Probate is the legal right to deal with the deceased person’s estate. An estate is all the money, property, investment and possessions owned by the deceased person, especially at death.
Personal representatives (PRs) should not make any financial plans or put property on the market until they have got probate.
What is Estate Administration?
Estate administration is the process of administering (dealing with) a deceased person’s estate. It involves many different stages from the death through to obtaining a grant of probate, paying any debts and lead to the distribution of the deceased’s assets to beneficiaries according to the deceased’s will or to the Intestacy Rules.
An estate’s administration starts on the date of the deceased’s death and ends on the date the deceased’s affairs are finalised by his personal representatives (PRs).
What is the difference between Probate and Estate Administration?
Estate administration is the whole process of dealing with a deceased person’s estate from date of death to the end of the administration period.
Whereas, probate is just a part of the estate administration process. Probate provides Executors with the legal right to deal with the deceased’s estate.
Who is responsible for Estate Administration?
Personal representatives (PRs) have the authority to deal with the deceased’s affairs which comprise all the deceased’s property and finances and obtain a grant of probate to administer the estate.
The appointment of a PR may be as an executor, where the deceased left a valid will or an administrator, where there is no will. An administrator is appointed where there is a will, but nobody is willing to act or the will is invalid.
If there is no will, the estate is known as intestate and the estate will be administered under the terms of the Intestacy Rules. The court will appoint an administrator to deal with the estate administration, this is usually the deceased’s next of kin (surviving spouse or civil partner, children, parents, brothers or sisters).
What is a Grant of Probate?
A Grant of Probate is a legal document which is obtained from the court. It gives the Executors the legal right to proceed with estate administration.
The grant allows the executor to deal with the assets in a deceased’s estate, for example to close his bank accounts, to sell his property and pay his debts and expenses of the administration of the estate.
The grant also proves the validity of the will.
Do I need Probate?
In England and Wales, probate is generally required when a person who died owned property, assets held in trusts, significant assets in their sole name. The probate ensures proper administration and distribution.
When a person dies without a valid will (intestate), probate is necessary to determine how their estate will be distributed according to the Intestacy Rules.
If there are disputes among beneficiaries, a will may be challenged as invalid, or concerns about the executors’ actions or inactions, probate may be necessary to resolve these issues through the probate court.
When isn’t Probate required?
A Grant of Probate may not be required if the assets are jointly owned, as they will automatically pass to the surviving owner, or if the estate is low in value, most financial institutions will release funds below £5,000 without a Grant of Probate.
Where property is held as joint tenants (not tenancy in common), it passes automatically to the survivor on the death of one of the tenants. Therefore, no grant is required but a copy of the death certificate should be sent to the Land Registry and they will transfer the property into the sole name of the surviving joint owner.
Life policies written in trust for the benefit of others are payable directly to the named beneficiary, so no grant is required but a copy of the death certificate is required.
Many pension schemes operate so that a lump sum on death in service does not form part of the deceased’s estate, because it is payable at the discretion of the trustees of the scheme. The deceased member may have nominated a person to whom such a sum is payable. Only a copy of the death certificate is required to discharge such payments.
Executors (but not administrators) can sell personal chattels before the grant is obtained.
How long does it take to get a Grant of Probate?
Once the Inheritance Tax has been paid, HM Revenue & Customs will issue a receipt for this within 4 to 6 weeks. This will need to be sent to the Probate Registry along with the application for the grant of representation.
Providing there are no issues with the application, the grant of representation will usually be issued 2 to 3 weeks later.
Is there a deadline to apply for Probate?
There are no time limits when applying for probate or administering an estate in England & Wales.
You can start the probate process whenever you are ready but, you might not be able to deal with the deceased’s estate until you have obtained a grant of probate, so sooner you start the probate process, sooner you get control of the deceased’s estate.
if you are appointed as an executor of the estate, you need to act in the best interests of the beneficiaries. If you delay for too long, they will be within their rights to question your duties and you could also become liable to pay interest on any undistributed assets to them.
If Inheritance Tax is payable, it must be paid within six months of the death. If this six months deadline isn’t met, there could be interest and penalties. Furthermore, Executors must send form IHT400 to HMRC within 12 months of the end of the month of death. If the form is sent in after that time without reasonable excuse they may be liable to a penalty up to £200. Additionally, should the delay extend another 12 months (that’s, 2 years after death), you may be liable to an additional penalty up to £3,000.
Essential things to do before applying for Probate
There are some essential things that Executors will need to be done straight away when someone dies. These include:
- Making sure that any property is secured and adequately insured
- Register the death within five days (this includes weekends and bank holidays). You will get a certificate for a burial to give to your funeral director or an application for cremation
- Notifying various government organisations by using ‘Tell Us Once’ online. The Tell Us Once will notify HM Revenue and Customs (HMRC), Department for Work and Pensions (DWP), Passport Office, Driver and Vehicle Licensing Agency (DVLA), the local council and Veterans UK. You cannot use Tell Us Once if the person died when they were living abroad.
- You will need to identify the things the deceased owned (assets: bank accounts, pensions, property, cars, household goods and personal items etc.) and debts (including, utility bills, mortgages, money owed on credit cards etc.)
- You will need to contact organisations such as, banks, mortgage providers, insurance providers, companies and personal or workplace pension schemes.
- Take all reasonable steps to collect money due to the estate.
- Settle any Income Tax and Capital Gains Tax liabilities to the date of death. This will be a part of the deceased’s asset or debt, depending on a tax return or a tax liability.
- You need an estimate of the estate’s value (the deceased’s total assets and debts) to find out if there is Inheritance Tax to pay.
- If Inheritance Tax is payable, it must be paid within six months of the death. If this six months deadline isn’t met, there could be interest and penalties.
How to find out whether there is Inheritance Tax to pay
Once the executors have identified and estimated the total value of the estate, you will need to work out if the estate owes any Inheritance Tax. You can use the HMRC online Inheritance Tax checker or use a professional firm to help you.
There is normally no Inheritance Tax to pay if either the value of the estate is below the £325,000 threshold (from 6 April 2009 to 5 April 2028) or the deceased left everything above the £325,000 threshold to their spouse, civil partner, a charity or a community amateur sports club.
If the deceased gave their home to their children (including adopted, foster or stepchildren) or grandchildren, the above threshold can increase another £175,000 (known as the ‘main residence nil rate band’, this amount applies from 6 April 2020 to 5 April 2028).
If the deceased was married or in a civil partnership and the estate is worth less than the above two thresholds, any unused thresholds can be added to their spouse’s thresholds.
You will also know that any gifts the deceased made in the last seven years. The seven years are counted backwards from the date of death. Gifts can be money, property or any other valuable items such as a car.
This is called a Potentially Exempt Transfer (PET). If the deceased made any PETs in the last seven years, then this will need to be added back to the value of the estate and also will be reduced the threshold first.
To add more complexity to the PET above, you may still need to report full details of the estate even if no Inheritance Tax is due, if the person who died:
- gave away over £250,000 in the 7 years before they died
- gave gifts then continued to benefit from them in the 7 years before they died
- left an estate worth more than £3 million
- was ‘deemed domiciled’ in the UK
- had foreign assets worth more than £100,000
- was living permanently outside the UK when they died but had previously lived in the UK
- had a life insurance policy that paid out to someone other than their spouse or civil partner and also had an annuity.
- had increased the value of a lump sum from a personal pension to be paid after their death, while they were terminally ill or in poor health.
- had agreed that property they’d given away during their lifetime would be part of their estate rather than pay a pre-owned asset charge.
What documents do I need for Probate?
From 2 November 2020, probate applications can be made online or by traditional paperwork.
The following documents usually need to be lodged with the Probate Registry in order to obtain a grant of probate.
- An probate application form
- The last original will and any codicils made since that will plus three copies
- An official copy of the death certificate
- An Inheritance Tax account (where required), signed by the applicants.
- Payment for probate court fees
- Any other papers that the registrar or district judge may require (e.g. affidavits)
What happens after Probate?
Once the Personal Representatives (PRs) have obtained a grant of probate, the PRs can begin the process of estate administration.
Once the estate administration has been completed, the PRs can then distribute the assets of the estate under the terms of the deceased’s will (or under the rules of intestacy if there is no will).
What’s involved in Estate Administration?
Every estate is different what will be involved. It can often be extremely complex and time consuming. It is important to be aware that any debts, funeral and testamentary expenses of the estate must be paid in full before any beneficiaries receive their gifts under the will.
Estate administration usually includes:
- Essential things that Executors will need to be done straight away, please read ‘Essential things to do before applying for Probate’.
- To advertise for unknown creditors or beneficiaries to come forward and claim against the estate. This could in the London Gazette and in a local newspaper.
- Pay the deceased’s debts and other outgoings
- Distribute the legacies
- Complete the estate administration and distribute the residuary estate
The Executors do not have to take full responsibility for the entire estate administration process, they can employ a professional to seek advice, guidance and support to help them.
How long do people (creditors) have to make a claim on an estate?
If someone wants to make a claim on a deceased person’s estate, they only have a limited time to do so. The deadline to make a claim is 6 months from the grant of representation being issued, though they may be able to apply to the court for an extension.
If the grant of representation hasn’t yet been issued, it’s possible to lodge a caveat at the Probate Registry. This will prevent the grant from being issued and, in turn, prevent any payments from being made out of the estate while the claim is being investigated. A caveat can remain in place for up to 6 months.
Under the Inheritance (Provision for Family and Dependents) Act 1975, certain individuals can make a claim against the estate for “reasonable financial provision”. These individuals include the spouse, former spouse or a child of the person who died. This is called contentious probate.
How long does it take to administer an estate?
Every estate is different and can take a different time frame to obtain the grant of probate and administering the estate, depending on its complexity. An estate typically takes 6 – 12 months to complete the process.
If the deceased have not left a Will (intestate), the estate will be distributed under the terms of the law. It’s called the rules of intestacy. Under these rules, the law will determine who inherits what and who can administer the estate. There is no real difference to the length of time it takes to deal with an intestate estate, it’s much the same between 6 to 12 months unless there are complex problems.
There are various reasons why an estate may take longer than a year to administer, including complex Inheritance Tax situations, lengthy property sales, missing beneficiaries, settle Income Tax/CGT to the date of death or disputes between beneficiaries of the estate.
Next steps
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