Here in the Wills, Trusts and Probate Team there are certain questions we get asked… a lot.
So we thought it would be helpful to provide some answers to some of the most common FAQs here.
If you find yourself having to sort out the affairs of someone who has died it can be difficult.
You will probably have a lot of questions.
Understanding the process of winding up an estate can be complicated, so ensure you read up before you start so you can decide whether you need to contact a specialist probate solicitor.
What is probate?
Probate is the legal and financial process of dealing with the property, money, and possessions of a person who has died.
The term also refers to the Grant of Probate – a legal document that allows the executors named in a will to deal with the deceased’s estate.
If no will has been left, a Grant of Letters of Administration is required.
Do I need a Grant of Probate?
A Grant of Probate or Grant of Letters of Administration is not needed in every case.
If an estate is small and there is no property to sell, it could be wound up without a grant.
Each bank has their own limit above which a Grant of Probate will be required. This is usually between £5,000 and £50,000 but you would need to contact the bank where the deceased held their main account.
How do I get a Grant of Probate?
To start the process, the executor of the estate will need to value it and calculate whether Inheritance Tax is due.
Calculating Inheritance Tax can be complicated and it’s always advisable to ask a solicitor to check this for you.
Substantial gifts made in the seven years before death need to be taken into account as Inheritance Tax may also be payable on the value of these gifts on a sliding scale.
Once this has been done, a Grant of Probate or Grant of Letters of Administration can be applied for.
An application form needs to be filled in and sent off with the fee, a will if there is one, as well as any codicils that may have been made.
HM Customs & Excise will send a receipt for any Inheritance Tax that has been paid directly to the Probate Registry.
Do I need to pay Inheritance Tax?
In 2022-23 tax year everyone has a tax-free inheritance tax allowance of £325,000 – known as the nil-rate band.
The allowance has remained the same since 2010-11. There is also an additional tax – free allowance called the residence nil- rate band. The allowance in this tax year is £175,000.
The standard inheritance tax rate is 40% of anything in your estate over the £325,000 threshold.
For example, if you leave behind an estate worth £500,000, the tax bill will be £70,000 (40% on £175,000 – the difference between £500,000 and £325,000).
However, if you’re married or in a civil partnership you may be able to leave more than this before paying tax.
Can I reduce the amount I pay?
Effective planning can substantially reduce the amount of IHT that will be payable on your death.
If your estate is likely to exceed the IHT nil rate band then our expert team of solicitors will help to minimise the tax implications of your estate and maximise the financial benefit for your family.
Personal representatives to an estate, eg. executors and administrators, have personal liability for any errors that are made, meaning they would be required to reimburse the estate for penalties and interest that could have been avoided.
What do I do once probate has been received?
Once the Grant of Probate or Grant of Letters of Administration has been received, you can start to close bank accounts and sell assets such as shares and property.
After all of the assets have been liquidated and a period of time has elapsed to give creditors and potential beneficiaries time to make themselves known, you will need to prepare detailed estate accounts and account to the beneficiaries with their share of the inheritance.
If I’m an executor do I have to deal with the estate administration?
Dealing with an estate administration can be complex and often very time-consuming.
Not everyone is able to take on the task and it is open to you to instruct a probate solicitor to carry out the process on your behalf. Their costs are normally paid from the estate.
We can help
If you would like to speak to one of our Wills, Trusts and Probate Team, contact us on 01772 799 600.
Article by Zoe Fleming
