Probate

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Understanding the probate process and why auction works

What is Probate

Probate is the word used to describe the legal process of administering the estate of a person who has died, and, after deducting debts and other liabilities, transferring that person’s money and possessions to the people who will inherit them: their beneficiaries.

There are three main stages in the process of Probate:

1. Collecting the information about all of the assets and liabilities of the deceased
2. Preparing the statutory Tax Returns and the application to the Probate Registry for the Grant of Probate
3. Gathering in the assets, paying the liabilities and expenses, and distributing the estate to the Beneficiaries

Who Needs Probate

Probate is generally required to enable a person’s assets (property, money and possessions) to be distributed following their death.

If the person who has died leaves a Will:

In this case one or more ‘Executors’ may be named in the Will to deal with the person’s affairs after their death. The Executor applies for a ‘Grant of Probate’ from a section of the court known as the Probate Registry. The Grant is a legal document which confirms that the Executor(s) has the authority to deal with the deceased person’s assets. They can use it to show they have the right to access funds, sort out finances, and collect and share out the deceased person’s assets as set out in the Will.

If the person who has died didn’t leave a Will:

If there is no Will, a close relative of the deceased can apply to the probate registry to deal with the estate. In this case , they apply for a ‘Grant of Letters of Administration’. If the Grant is given, they are known as ‘Administrators’ of the estate. Like the Grant of Probate, the Grant of Letters of Administration is a legal document which confirms the Administrator’s authority to deal with the deceased person’s assets.

Even if there is just one asset in the sole name of the deceased, it is likely that Probate could still be required. However, each case is unique and sometimes probate may not be needed, for example:

• where assets such as a property are in joint names – called joint tenancy. In these cases, the asset passes automatically to the surviving joint owner. However, most property is nowadays held as “tenants in common” and in these cases probate is always required.
• the person who has died has left very little (usually less than £5,000).

Whats Involved

Whether or not the person who has died left a Will, the estate will have to be administered. Some estates are very simple to administer while others are very complex. The Executors’ and Administrators’ duties include:

• identifying all the deceased person’s assets and valuing them as at the date of death
• accounting to HMRC for any Inheritance, Income and / or Capital Gains Taxes due
• obtaining the Grant of Probate or Letters of Administration
• gathering in all the assets, including any overseas
• settling all the deceased person’s liabilities
• preparing estate accounts
• identifying all the beneficiaries and locating any who are missing or unknown
• correctly distributing the estate to the beneficiaries

Who is Responsible

The Executors or Administrators are responsible for administering the estate and are accountable to Her Majesty Revenue and Customs (HMRC) and to the beneficiaries. The process of administering an estate can be quite time consuming and also sometimes daunting. Please talk to us before you start as we can help you assess your situation and point you in the right direction.

Here are some things to think about:

• Your choice is either to employ a professional legal firm to administer the estate or to decide to “do it yourself” (DIY).
• As an Executor or Administrator, you are legally obligated to act in the interests of the deceased. If you feel unable to act as an Executor or Administrator, your best option is to employ a professional legal firm who will take on all the Executor/Administrator responsibilities on your behalf.
• Make an honest appraisal of your time limits and ability to take on a task that can be complex and very time consuming.
• If you pursue the DIY route you may be personally liable for any mistakes or oversights, or if things go wrong.
• There are many things to organise when someone dies and it is easy to forget vital steps or become overwhelmed.
• You should always take legal and professional advice if a problem arises that you feel you cannot deal with.

Whether you decide to appoint our legal experts or administer the estate yourself, we have a range of services to suit your needs