Probate is sometimes needed to distribute the assets and estate of a person who has just passed away. Although it can be necessary in some cases, it may not automatically be a requirement, so understanding whether you need it can help smooth the way for your loved ones to execute your Will.
What Is a Grant of Probate?
Probate is usually used to describe the legal and financial processes after a person has passed away. It proves that the Will is valid and confirms that the executors have the right to administer the estate. Before the executor can do anything with the assets left behind, they may have to apply for probate.
A grant of probate is the document sometimes required by banks to be able to access the assets left by a person after their death. It is only known as a grant of probate if there is a Will left; otherwise, a grant of letters of administration will be used instead.
The Probate Process
The process of applying for probate can be separated into five stages:
- Stage One – identifying all the assets and liabilities to determine the estate’s value while also identifying who is entitled to inherit from the estate, whether that is through the Will or, without one left behind, the rules of intestacy.
- Stage Two – paying Inheritance Tax where applicable and submitting the tax return, then applying to the Probate Registry for a grant of representation, confirming who has legal authority over the estate.
- Stage Three – selling the assets, settling any debts or liabilities, and paying any final fees as well as additional Capital Gains Tax or Inheritance Tax.
- Stage Four – preparing estate accounts to pay out of the estate and showing the balance left to the beneficiaries.
- Stage Five – as long as there are no challenges to the estate or other complications, the final stage involves transferring assets and money to the beneficiaries named in the Will.
Does Your Estate Need Probate?
Small estates that do not include property and come to less than £5,000 will often not need probate, but anything larger or that includes property will likely need a grant of probate to be administered.
Probate is definitely required if:
- The executor needs to sell property on behalf of the estate
- A bank has requested to see the grant of probate to release funds
In some cases, probate may not be required if:
- All assets, including property and bank accounts, were held jointly with someone who is still alive (such as a spouse or partner)
- The estate contains only cash and personal items
In some cases, although you might jointly own property with your spouse or partner, probate may still be required to deal with the estate. There are two ways to own a home jointly:
- Joint tenancy – having a joint tenancy means owning your home with your partner. Joint tenancy ensures that your spouse inherits your share of the property after you pass away.
- Tenants in common – being tenants in common means that you and your partner own a separate share of the property that does not automatically go to your partner upon your death. Being tenants in common is useful for setting up trusts.
If you and your partner are tenants in common, probate will be needed to administer your share of the property to the correct beneficiary. However, this can change if your share of the property is held in trust.
Probate may also not be needed for assets held in trust. If you have assets in trust that you are still benefiting from, or even have assets that you are not benefitting from and are instead held for future beneficiaries, they are not included as part of your estate, so probate does not apply to them.
Without probate in the necessary circumstances, the named beneficiaries in the Will won’t be able to receive any of the gifts they are entitled to. Not applying for probate when needed can cause significant delays in the administration of the estate, as well as additional costs for your loved ones.
You can smooth the probate process for your loved ones with a clear Will from The Planning Bee. Our legal experts will help you to lay out your wishes and take stock of your assets, so you can be clear on whether probate is needed.
Do You Need Probate Without a Will?
If you pass away without a Will, you are classed as having died intestate. The intestacy rules dictate how your estate should be distributed, and the probate process can change because of this.
Instead of applying for probate, your loved ones will have to apply for letters of administration. The person in charge of your estate, known as an administrator, will then follow intestacy rules to distribute your estate.
In some cases, even if there is a Will present, letters of administration may be needed to distribute the estate properly. If your executors pass away before you, but you do not name another person to replace them, the person who takes over may be granted letters of administration with Will annexed. Alternatively, if your chosen executor does not want to administer your estate or does not have the capacity to, letters of administration with Will annexed will be granted to the person who takes their place.
While probate is not necessarily part of your estate planning, it is good to keep in mind while writing your Will. Choosing capable executors, having a strong Will, and taking stock of joint and individual assets can help your loved ones when it comes to administrating your estate.
Contact The Planning Bee today for help creating your Will. Our team is here to help you through all aspects of the estate planning process with friendly, fast advice.