As a Private Client Solicitor, I am often asked by clients, usually within a Will meeting, “what is Probate?”
Probate is defined as a judicial process whereby a Will is proved through the Courts; this, as one might expect, is not an overly helpful or clear explanation to give to clients!
Generally speaking, Probate is a term used for two things; a process and a document.
The process most people are referring to when they say “Probate” is far more involved than the Court based element used in the definition above. I have outlined the basic stages commonly included below: –
1/ Ascertaining the value of the deceased’s assets and liabilities
The Executors (or Administrators when there is no Will) must contact all of the organisations with which a person held assets/liabilities and ask for a value at the date of death. This information is then collated within an Inheritance Tax Return and reported to the relevant authority.
2/ Paying the Inheritance Tax
Inheritance Tax is payable on the value of the Estate above the relevant tax-free allowances at a rate of 40%. This tax is payable to HM Revenue & Customs and can be paid in instalments if a house needs to be sold in order to realise cash to pay the tax.
3/ Apply to the Court for the Probate document
After HM Revenue & Customs are satisfied, you are ready to apply for the Probate document. This is known as a Grant of Probate (where there is a Will) or a Grant of Letters of Administration (where there is no Will). This document is not always required, and it will become clear as you go through stage 1 of the process as to whether you need the Probate document or not. However, it may still be necessary to submit an Inheritance Tax Return even if you do not need Probate.
4/ Action the Testator’s wishes
You are now ready to send the Probate document to the relevant organisations with instructions to encash or transfer the assets and settle the debts (including any outstanding Inheritance Tax). You can then distribute the Estate to the beneficiaries in accordance with the Will or Intestacy of the deceased.
The above is a general outline of the Probate process and of course each Estate is entirely unique and has its own individual requirements so it is important to seek appropriate advice when a loved one passes away.
If you would like to discuss any topics raised in this article, then please do not hesitate to contact our Private Client team in Reading. Charlotte Fox, one of our Probate specialists, would be glad to assist you. Charlotte can be contacted on 0118 958 9711 or firstname.lastname@example.org.