When someone dies it is essential to deal with their estate, which is made up of their home, savings and investments, belongings and anything else they may have owned.
This is not as easy as simply passing around what they owned as they wished, even if they left a will.
Instead an official process must be followed, known as probate (or confirmation in Scotland). This gives the legal right to distribute the estate and involves varying degrees of complication.
Our quick guide below outlines the process in England and Wales for dealing with the estate of someone who died leaving a will.
Fulfilling last wishes: How to apply for probate and deal with someone’s estate after they die
What is probate?
Probate is generally used as the term to describe dealing with someone’s estate. It involves finding out about all their assets and debts, valuing their estate and passing it on.
This is done by that person’s executors, who will be named in their will. They could be a trusted friend or member of family, or a nominated professional, such as a solicitor.
When writing a will it is important to remember that you do not need a professional to do probate, it is perfectly possible for the layman or woman to do it.
The crucial elements that decide how complex this task will be is whether you need a grant of representation and have to complete inheritance tax forms.
What is a grant of representation?
The legal term ‘grant of representation’ covers two types of document, one of which you will need depending on the circumstances.
– You apply for a ‘grant of probate’ if the deceased person left a will.
– You will need ‘letters of administration’ if there was a will but it does not name an executor, or the named executor cannot apply, or there is no will.
A grant of representation is the official seal that allows you to access a deceased person’s assets and distribute them.
Banks and other financial institutions will ask you for this before they will release funds.
How to be a successful executor
Stephen Gold is a retired judge and author who recently acted as executor for his beloved late aunt.
After successfully adding many hundreds of pounds more to her estate, he offers a guide to follow for any readers facing the ordeal of sorting out a deceased loved one’s finances.
In the first of a three-part serial, Gold explains how he took on BT and a string of banks and building societies over unacceptable errors and delay.
In the second part, Gold eventually finds a way to prise cash out of Lloyds after it refuses to budge over a no-interest account.
He then gets a stern reception at the probate service when he tries to complain about a 16-week delay – but persistence finally wins results.
In part thee, he describes how to squeeze yet more compensation from banks slow to hand over cash.
The Gov.uk website says: ‘Contact the financial organisations the person who died used (for example, their bank and mortgage company) to find out if you’ll need probate to get access to their assets. Every organisation has its own rules.’
It adds you may not need probate if the person who died:
– Only had savings
– Owned shares or money with others – this automatically passes to the surviving owners unless they’ve agreed otherwise
– Owned land or property as ‘joint tenants’ with others – this automatically passes to the surviving owners.
Who is responsible for applying for probate?
When someone dies leaving a will they will name an executor or executors in it. This role should have been agreed with those people when they wrote the will.
The executors are responsible for administering the will and dealing with probate.
Even if they have been named in a will as an executor, some people pass this task on to a solicitor, deciding to pay a professional to do the job for them. You can officially relinquish the job if you have not already started doing it.
Gov.uk says: ‘Only certain people can apply for probate. Who can apply depends on whether or not there’s a will. If there’s a will, executors named in it can apply. If there’s not a will, the closest living relative can apply.’
It is possible to do probate yourself. One money-saving tip is to do the bulk of it and then simply pay a solicitor to check your work for you.
Find tips on how to do this when you are applying online and what it costs, plus ways to avoid common mistakes that cause delays below.
What do you need to do to value an estate?
To value someone’s estate you need to identify all their assets. This means any bank and building society accounts, investments, properties, their belongings, car and anything else they may have owned. You also need to identify and pensions and life insurance policies.
For savings and investments and other financial assets you need to contact the provider and ask for a valuation on the date of death.
Properties need to be valued, preferably by an estate agent or valuer, and you will also need to tot up what everything else is worth.
You also need to know about any debts, such as mortgages, credit cards, loans and personal debts and you can deduct the cost of funeral expenses, so get this figure too.
Inheritance tax then needs to be dealt with even if no tax is going to be owed.
Do you have to fill in inheritance tax forms?
Unfortunately, form-filling is difficult to avoid. But most estates do not incur inheritance tax and are ‘excepted estates’, in which case you do not have to give full details of an estate’s value, unless it falls under one of the other categories listed here.
Gov.uk has a guide to how to value an estate for inheritance tax and report its value here.
What counts as an excepted estate depends on whether the person died before or after the start of 2022.
If the person died on or after 1 January 2022
An estate is usually an excepted estate if any of the following apply:
– Its value is below the current inheritance tax threshold
– The estate is worth £650,000 or less and any unused threshold is being transferred from a spouse or civil partner who died first
– The deceased left everything to a spouse or civil partner living in the UK or to a qualifying charity and the estate is worth less than £3million (search the charity register for registered UK charities)
– The deceased was living permanently outside the UK (a ‘foreign domiciliary’) when they died and the value of their UK assets is under £150,000.
HEATHER ROGERS ANSWERS YOUR TAX QUESTIONS
If the person died on or before 31 December 2021
An estate is usually an excepted estate if any of the following apply:
– Its value is below the inheritance tax threshold at the time the person died
– The deceased left everything to a surviving spouse or civil partner living in the UK or to a qualifying charity and the estate is worth less than £1million (search the charity register for registered UK charities)
– The deceased was living permanently outside the UK (a ‘foreign domiciliary’) when they died and the value of their UK assets is under £150,000,
Gov.uk explains the processes to follow regarding inheritance tax if you are dealing with:
– An estate where a full account is needed
– An excepted estate if the person died on or after 1 January 2022
– An excepted estate if the person died on or before 31 December 2021.
The process of applying for probate
If there’s inheritance tax to pay, you have to wait 20 working days after sending the tax forms to HMRC before applying for a grant of representation.
Nowadays, the Government prefers people to apply online, and notes that it takes longer to process paper applications than online ones.
You can apply here, and that link also explains how to get help with an online application.
If you decide to fill in a form, use PA1P if there is a will and PA1A if there is no will.
You will need to give details about the deceased and their family and rehash some of the figures from the inheritance tax stage above.
There might also be a fee to pay – £273 if the value of the estate is over £5,000, but nothing if it is £5,000 or less. You might be able to get help with fees.
A grant of representation will then be sent to you, and this needs to be shown to banks and other institutions to release assets.
Any debts owed by the deceased must then be settled and the estate can be distributed. The grant also allows properties to be sold and the money distributed.
How to avoid probate delays
People can face significant wait times if their applications are ‘stopped’ for some reason, warns Michael Culver, chair of Solicitors for the Elderly.
‘This could be down to errors in the application or missing documents. Once an application is stopped, it goes to the back of the queue and new cases take priority.’
If you’re handling the probate process yourself, Culver suggests the following tips to pre-empt some of the common problems.
1. If in doubt, seek out an SFE member to review your application before you submit it. Many of our members will happily review and feedback on any changes required for an agreed fixed fee.
If applying online, you can share your password and log-in details with your solicitor, but usually it will send a code to your email so it’s best to do it in the same room where possible, or over the phone.
Michael Culver: Cases take longer if stopped, ususally due to errors in the application or missing documents, and once stopped an application goes to the back of the queue
We’d recommend getting in touch with a lawyer for a fixed fee meeting in the office. We’d ask someone to bring all of their paperwork and log in details ready to review the online application together before making the submission.
In central London you might pay around £300 for a fixed fee one-hour meeting to review the online probate application, but this is assuming there’s no inheritance tax payable.
If there are inheritance tax forms to check, it wouldn’t be a fixed fee as it would likely take three to four hours of additional work and the total could be closer to £1,000.
This will differ per region and per firm.
2. If tax is payable wait 25 working days from sending the inheritance tax paperwork to HMRC before applying for probate.
This is recommended even if HMRC have confirmed receipt of the paperwork in the meantime, in order to give them time to share the paperwork with the tax service.
The lack of a response from HMRC is one of the main causes for an application being stopped.
3. Ensure all names match those within the will or explain why if there is a difference.
4. Explain why one executor isn’t applying for the grant if appropriate.
5. Ensure all documents including the original will are included when sending documents to HMCTS.
6. If there is no will, make sure you explain why you are entitled to apply for the grant.