What is Probate? When is Probate Required?
Probate is the word normally used to describe the legal and financial processes involved in dealing with the property, money and other possessions of an individual who has passed away in England or Wales.
The time it takes to get probate or letters of administration varies according to the circumstances. It may only take three to five weeks if there are no complications, inheritance tax is not payable, the estate is straightforward and all forms are filled in properly. However, in more complicated cases, it may take much longer (six to nine months). In our experience it takes a similar time to putting a property on the market and being ready to exchange. If probate is not complete the buyer will have to wait before they can exchange.
Probate involves a lot of complicated legal and financial work, and can be broken down into five different phases.
Phase 1. Identifying all of the deceased’s assets (property, investments and possessions) and all of their liabilities (debts ranging from loans to utility bills), in order to determine the value of their Estate.
At the same time, verifying entitlement to the Estate under the terms of the deceased’s Will, or in accordance with the law governing Intestacy if they died without a Will, and obtaining the necessary identification documents for those beneficiaries.
Phase 2. Paying Inheritance Tax to HMRC (HM Customs & Excise) where applicable, and submitting the correct Inheritance Iax return (required whether or not there is tax due), and applying to the Probate Registry for the Grant of Representation, being a document confirming the legal authority to administer the estate.
Phase 3. After the Grant of Representation has been issued by the Probate Registry, liquidating (selling) the deceased’s assets, settling their liabilities, paying the final estate administration expenses and accounting to HMRC for any further Inheritance Tax, any Income Tax or Capital Gains Tax due to or from the estate.
Phase 4. Preparing estate accounts documenting all payments into and out of the Estate, and showing the balance left for distribution to the beneficiaries. Sending the estate accounts to the Personal Representatives (such as the Executor in the Will) for approval.
Phase 5. Providing there are no challenges to the estate or other complicating factors preventing distribution at this stage, the final phase will involve transferring any assets that the beneficiaries wish to retain, and distributing the balance of the estate funds.
Cooper Adams offer FREE probate property valuations