I appreciate there are a lot of articles about probate
rolling around the world wide web, but I truly hope I have mastered breaking
down the process to ensure that it is more understandable for those embarking
on probate or those it may fall upon.
Probate is possibly one of the biggest responsibilities
that could be asked of you. It’s a
little more complicated then ensuring that someone’s pet is taken care
off. And to top it all off it is a mind
field so hopefully you’ll find this interesting and useful. And where possible I have included the
relevant links so that you can use this article as a resource.
Once you have been appointed as Executor for your friend or
loved one it is your responsibility to distribute their assets after their
death. And it will never be an easy
process – as you will also be coping with your own grief and suddenly you’ll be
faced with mountains of paper work and you’ll need to be able to hold sensible
conversations with businesses such as Banks, utilities and Local Authorities.
It has been our experience that banks have made this task
even more onerous, with one bank asking to speak to the person to confirm their
death! Yes, you read that correctly – one bank we dealt with actually asked to
speak to the deceased to confirm that they had deceased – sometimes you just
can’t make this stuff up!
When dealing with Probate it is likely you’ll need a Grant
of Probate
before you can distribute the estate – but this is not always necessary or the
case. It depends on whether the
deceased’s assets are jointly owned and if they will automatically transfer to
the surviving owner.
How the process should
work
The task of probate can be laborious, and the process can
vary depending on which organisations you deal with. We know from personal experience that
Santander (formerly Abbey National) can be quite difficult to deal with, and
don’t get me started on the Post Office Money!
However, the key stages are:
1. Assess
how much the estate is worth.
This may mean working through the deceased’s papers and approaching companies
for account details including credits and debits – you will need proof of
identity and that you are the nominated person responsible for dealing with the
estate.
2. Apply
for probate.
If you live in England, Wales or Northern Ireland you will need to complete a PA1 form, or in Scotland it is a C1 form. There is a fee of £215 in the UK
and Wales, £200 in Scotland and £250 in Northern Ireland. Unless the estate is worth less than
£5,000. At the same time you will need
to complete an inheritance tax form – if the estate is below the £325,000
threshold it would be IHT205, or if tax is payable the form is IHT400
3. If someone dies without a will you’ll
only be able to apply for a grant
of representation if you are next of kin – usually a spouse or child.
4. Settle
inheritance tax (IHT).
Before probate can be granted this needs to be paid (the links are above),
however, the deceased’s accounts may be frozen.
In some cases, organisations will release funds early to cover IHT and
funeral bills. You’ll need IHT423
and send it directly to the bank of the deceased, the bank will then send funds
directly to HMRC.
5. You’ll
need an executors account.
This is honestly one of the most convenient ways to gather the deceased’s assets
all in one place. This account will also
enable you to manage payments to any beneficiaries. If you use your own personal account this can
slow down the process and make it difficult to keep track of everything.
6. Notifying
beneficiaries.
Now this part I learnt about from Heir Hunters on TV as
it is actually very important and acts as a back up for your own protection
against liabilities. You’ll need to
contact those who are named in the will and notify them, but you should also
consider placing an advert in the UK’s official register – The Gazette. If you don’t, you could be liable for claims
from unidentified creditors in the future.
7. Distributing
the assets.
As executor it will be your duty to distribute the assets in accordance to the
will. It is recommended that you ask
beneficiaries to sign a receipt for any payments you make. You should also provide accounts for the
estate to the people who receive the remaining assets. Keep records of everything you do for a
minimum of 12 years.
As an executor you
will deal with a lot of different organisations and each organisation will have
its own way of dealing with probate.
Banks will usually
release funds before you have a grant of probate, if its to cover IHT or
funeral bills.
Generally, these payments will be made directly to HMRC or the funeral
director.
As for making the process easier I can only comment from my
own experiences of probate. I would say
it is advisable to, where possible, make accounts joint accounts. And order more copies of the death
certificate than you think you’ll need, these are more expensive to order
afterwards.
