There is an overriding question when someone dies; do I need probate? Determining if probate is needed or not can be difficult to ascertain. Sometimes it’s down to whether there is a will or not, sometimes it’s down to joint-named assets and bank accounts, and sometimes it’s the value of the entire estate that determines the outcome. Let’s look into this in more detail.
What is probate?
Before we discuss whether probate is needed or not, let’s just clarify exactly what probate is and what it means. Probate is the legal process by which a deceased’s estate is distributed among beneficiaries after someone has died. The process includes all financial and physical assets, such as property, belongings and monies.
There are various situations where probate is absolutely required, some where it is not and some circumstances when letters or administration need to be applied for instead of probate.
When is probate necessary?
Generally, if the value of a deceased’s estate is in excess of £5,000, probate is required.
When there is a will, the executor appointed to manage the estate will apply for probate. The executor can be a family member, a friend of the deceased or a solicitor. However, if there is no will or executor, a next of kin or a member of the family representing the deceased will have to apply for letters of administration, which is the authority needed to administer the deceased’s estate. They will then be known as the administrator.
There are other circumstances where letters of administration are required:
- You have been left the entire estate;
- There are no executors named in the will;
- The executors are not prepared to accept the role.
Only an executor of the estate can apply for probate. If there is no executor, the next of kin or a close relative has to apply for grant of letters of administration in order to manage the deceased’s estate.
When is probate not necessary?
Generally, if the majority of the deceased’s assets are jointly owned with the spouse or civil partner, such as joint bank accounts or a mortgage, probate may not be required. However, there are cases where probate is not required:
- If the estate is worth less than £10,000 and there are no shares or land as part of the estate. If the estate is particularly small and there is only a token amount in a bank account, the bank has the discretion as to whether they need Grant of Probate to release the funds.
- If any money, i.e. bank accounts, or property are owned jointly with a spouse or civil partner.
The threshold for probate ranges from £5,000 to £50,000. The banks or financial institutions have their own policies regarding a deceased person’s assets so, it’s important to contact them as soon as possible.
When there is a will, an executor has been appointed to manage the estate and apply for probate. The executor can be a family member, a friend of the deceased or a solicitor that has the will. If there is no will or executor, someone representing the deceased will have to apply for the authority from the court to manage the deceased’s estate. This is usually the next of kin; they will have to apply for letters of administration.
Other circumstances when letters of administration are required:
- You have been left the entire estate;
- There are no executors named in the will;
- The executors are not prepared to accept the role.
Applying for probate
Once the death has been registered (which is within five days), you should apply for probate within six months of the death. This is not because there is a time limit on applying for probate. It is because there is a time limit on paying HMRC any Inheritance Tax that may be applicable. In practice, reporting the estate’s value to HMRC and applying for probate is usually done at the same time as both are needed to finalise the estate.
Whether there is a will or not, the probate process is similar. The first step is to find out the value of the estate, such as money in the bank, the deceased’s belongings and any property held in the deceased’s name (even if it is joint names, the value still needs to be ascertained). You will need to consider:
- Bank accounts, pension funds and any other financial assets, such as mortgage on a property, savings and life assurance policies
- Any property, whether in joint names or not, will need to be valued by a local estate agent. It is always worth getting three to four valuations.
- Any outstanding debts, such as utilities, mortgage payments, credit cards, loans or any other monies owed by the deceased
- Any gifts the deceased made that are above the official allowance within the previous seven years (not including Christmas, birthday or anniversary gifts) – they may be subject to Inheritance Tax.
In most cases, you will need a copy of the death certificate and/or will be sent to the relevant organisations.
Applying for probate can either be done through a solicitor, often the solicitor that holds the deceased’s will or a family solicitor, or you can file for probate yourself online. If there is a will, you will need the following to apply for probate:
- An official copy of the death certificate (if applying online, this will be a scanned image);
- The original will;
- The application fee.
One thing to note is that you can only apply for probate online if:
- All the named executors are alive and able to make decisions; and
- The deceased spent most of their life in England and Wales.
If there is no will, the next of kin or a close relative of the deceased will need to apply for letters of administration which you can do yourself via post using the form PA1A, which is a probate application form. You can download the forms from an online probate service or from a probate registry near you.
At Probates Online, we are able to offer a professional probate service online that is efficient and affordable. If you are an Executor of a will and need to apply for a Grant of Probate or would like to take advantage of our entire Estate Administration service, visit our website for more information or contact us today.