The following guidelines can help to answer one frequently asked question we face: “When is probate not necessary in the UK?” However, we won’t spend too much time consuming the details of this question, either. That’s because, in effect, probate is required primarily when there is a piece of property in question.
Suppose you become responsible for the administration of the estate of a recently deceased family member. As a result, you’re also squaring the loss with the prospect of spending a long time stuck in the process of handling a probate’s many ins and outs.
However, you might be surprised to discover that not all estates must go through formal probate in the first place.
Moreover, some of the testator’s assets – even for small estates – avoid the probate process altogether.
But to apply for a grant of probate on your own without inheritance plan attorneys is foolhardy and ill-advised. In truth, you should always speak with a capable probate attorney. Especially before reaching the conclusion that an estate doesn’t have to go through probate.
When is Probate Not Necessary? Some Examples
Yet we’ll explore these matters, and other parts of the estate, as well as we, guide you through whether probate is necessary in certain situations.
Joint Tenancies
In short, you do not need probate with regard to jointly owned property. Effectively, probate is excluded regarding those scenarios in which property in the estate is owned as beneficial joint tenants. By law, such property will automatically become wholly in the possession of the other owner.
As a result, there’s nothing to sort out through any probate courts – on the face of it.
There’s one critical exception, however: If there remains a mortgage on the jointly owned property in question.
Joint Tenancy vs. Tenants in Common
It’s worth noting the importance of a difference between joint ownership and tenants in common. Truthfully, whether a property is held as joint tenants or as tenants in common makes a difference to what happens to the property on the death of a joint owner. Be sure to speak your solicitor about this when it comes to estate planning, inheritance tax and letters of administration.
Joint Bank Account
You might sense a theme here: jointly-owned entities tend to be free from any need to apply for probate. Such is the case regarding bank accounts with beneficial joint owners. In essence, a joint bank account becomes entirely the asset and dominion of the remaining joint owner.
The rule of survivorship is the guiding principle on what happens to a joint bank account in the event of someone’s death. There is a couple of conditions, however, to consider.
- In essence, it must be safe to assume that all monies that the deceased joint owner contributes will automatically be part of his/her estate in the first place.
- Alternatively, probate or letters of administration might become necessary if other assets are not jointly owned.
The surviving account holder, in turn, holds all the cards in taking full ownership. To wit, they can simply show the bank/building society the death certificate of the other joint owner. Accordingly, the bank transfers the account into the survivor’s name.
It’s worth noting that exceptions to this might be if both joint owners come to an agreement to do otherwise.
Certain Types of Life Insurance
Indeed, some kinds of life insurance may also be exempt from probate laws. Citizens Advice advises that some life insurance policies can pay out the remainder of the outstanding balance regarding a mortgage, too.
If there is a mortgage on the property, there might be a life insurance policy, an endowment policy, or mortgage protection policy which will pay the outstanding mortgage if the person with the mortgage dies. In this case, you should write to the company, asking for a final statement.
Moreover, such scenarios might lead to the sale of the property and that which comes with such a major change. If that does occur, the mortgage is covered out of the sale of the property.
The Amount of Money in the Estate is Small
Now is where things tend to get a little bit more tricky. Smaller estates, in terms of the monies up for grab, do not tend to require probate either.
One huge factor affecting this might lie in funeral planning and other burial costs. These, in turn, can affect the size of the remaining money still part of the estate.
After the funeral expenses have been paid, the amount of money remaining is under a certain amount. Therefore, those controlling the estate (that is, banks and building societies) might be ready to release it to you without requiring the need to apply for probate or letters of administration. In effect, it’s quicker (and simpler) for them to just do this than to go through the entire probate process.
Also, some banks and building societies will release money needed to pay for a funeral, probate fees and inheritance tax.
From one estate to the next, however, please note that what constitutes a “small amount of money” will vary. As a result, it’s difficult to set a benchmark as to what constitutes “small.”
Insolvent Estate
In the tradition of the small money estate, the insolvent estate is also rather precarious. Effectively, in this scenario, you discover that the estate is insolvent. As a result, there is not enough money in the estate to pay all the debts, taxes and expenses.
This potentially devastating effect on the estate’s viability also doesn’t require the pursuit of probate.
Need to find when probate is not necessary? Call us!
Contact The Inheritance Experts if you’re considering contesting probate or the respondent in a probate dispute. We listen to your story and offer capable legal advice on whether you have ground to contest probate. If that is the case, we’ll be glad to show you the proper way to proceed with your claim.