What is Probate?
Probate is the legal and financial process that deals with the property, money, and possessions of someone when they die. When a person dies, before the executor of their Will can distribute their estate, they must apply for probate. After the court grants probate, the next of kin or executor can then deal with the deceased’s assets.
The Process of Probate
The process of probate often involves a lot of complicated tax, legal and financial work. Therefore, it breaks down into five stages.
- Identifying all the deceased’s assets and liabilities to determine the value of the estate.
- Paying inheritance tax and applying for the Grant of Representation.
- Selling the deceased’s assets, paying liabilities, and accounting to HMRC for any further tax due to or from the estate.
- Preparing estate accounts showing all payments, and showing the balance left for the beneficiaries. Sending the accounts to the executor for approval.
- Transferring the assets that the beneficiaries wish to keep, and distributing the Estate.
Probate is required in England and Wales when the deceased owns property. This includes houses, buildings, and land. When a bank or financial institution requests a Grant of Representation, this also requires probate. Usually, this happens when property goes over the threshold that the institution sets.
The financial institutions where the deceased had investments or bank accounts all have their own rules about when they require the document. This is regardless of their value, so sometimes there may be other reasons an institution asks for the document.
Probate and Inheritance Tax
In England and Wales, if an Estate is worth more than £325,000 when a person dies, then they typically have to pay Inheritance Tax. Currently, the Inheritance Tax rate is 40% on anything above the threshold. If a person leaves more than 10% of the estate’s value to charity, then the rate may reduce to 36%.
How long does Probate Take?
In England and Wales, it can take up to a year to complete probate. This depends on the assets and if there is a valid Will. In most cases HMRC conduct a thorough review of the Inheritance Tax information the executor provides.
Typically, it can take 6 to 9 months for beneficiaries to receive inheritance, however there can be delays. Examples of these delays include:
- Selling shares, property, and foreign assets
- Finding missing beneficiaries
- Placing advertisements for potential claimants to come forward
- Investigations by the Department for Work and Pensions
- Claiming on a life insurance policy
If Someone Dies Without Leaving A Will
If someone dies without leaving a valid Will, this is known as dying Intestate. In this case, the law will determine who receives everything. These laws are referred to as the Rules of Intestacy. The rules can be complicated, as the family tree must be clearly understood. Therefore, this can lead to people making mistakes in identifying the administrators and beneficiaries of an Estate.
How We Can Help
Here at The Inheritance Experts, we work with solicitors who have a wealth of experience dealing with Probate. Contact us today by filling in our contact form or by calling us on 01614138763 to speak to one of our friendly knowledgeable advisors.