Probate is the right to deal with the estate, including the property, possessions, and cash, of someone who has died.
An executor of the estate should not dispose of any part of the estate or make plans to do so until they have probate, so let’s look at the five stages.
1. Contact asset holders
This can be time-consuming, as it means notifying banks, insurance companies, pension funds, and other asset holders of the death and asking for a valuation of the assets these companies hold. These valuations will be needed for tax purposes.
2. Applying for probate
If the person left a will, you need to apply for probate; if not, you need to apply for letters of administration. If the estate is worth up to £325,000, there is no tax to pay and you don’t have to inform HMRC. If the estate is taxable, any payment due must be made before probate is granted; at the latest, the tax due must be paid within six months of the death.
If you need help in applying for probate and are looking for a London law firm, companies such as https://www.forsters.co.uk/ can help.
3. Applying for funds and placing a statutory notice
The companies that hold assets must be sent a copy of the grant of probate to enable them to release the funds into the named executor’s account. This must be an account separate from the executor’s personal account.
Good practice suggests a statutory notice should be placed in the Gazette.
4. Liabilities and debts
These must be paid first and can include administration fees, funeral costs, outstanding utility accounts, credit card bills, outstanding care bills, outstanding tax bills, and overpaid expenses incurred during the deceased’s lifetime.
5. Distributing the estate
Once the liabilities and debts have been cleared, the estate can be paid to the beneficiaries. The final accounts can be prepared, showing how the assets and cash were distributed, and the beneficiaries will receive a copy. HMRC can request a copy for up to 20 years.
