Probate

Probate

Once someone has died, it becomes necessary to wind up their affairs in as orderly and timely a manner as possible. This process is known as the administration of an estate.

Cross Border Experience

We have extensive experience in dealing with cross border aspects of Grants of Probate (issued in England) and Confirmations (issued in Scotland) and their respective means of administration.

Grants Of Representation

If the deceased owned stocks and shares or land in his or her own name – or had assets totalling more than a level set by a bank of building society – then it will often be necessary to obtain a Grant of Representation. This is a document issued by the Probate Registry – a division of the High Court.

Where the deceased left a Will, a Grant of Probate will be appropriate. If there was no will then the deceased is said to have died ‘intestate’ – and a Grant of Letters of Administration would be issued.

In either case Personal Representatives (also called executors or administrators) will be appointed to administer the estate. Their duty is to comply with the conditions of the will – or to follow the Intestacy Rules - if there is no Will.

Small Estates

If the estate is of a relatively small value then it will not usually be necessary to obtain a Grant of Representation. However, some building societies insist on a Grant in order to release funds of more than about £5,000 and so you just have to make enquiries and see what is required. Banks and building societies have different criteria for this.

Jointly owned assets will usually pass to the surviving owner(s) automatically and without the need for a formal Grant. Indeed, in most cases they will not be deemed to form part of the deceased’s estate at all.

In the case of jointly-owned land registered with the Land Registry one need only send in a prescribed form and a copy of the death certificate of the deceased in order to amend the Register for the property. The Land Registry will remove the name of the deceased from the register and send out a copy of the amended Register.

For jointly-owned bank accounts and the like take a copy of the death certificate to the bank, and they will attend to the formalities.

Inheritance Tax

This tax is payable on death if the value of the deceased’s estate is worth more than a set level fixed by the Government from time to time – known as the ‘nil-rate band’. At present the nil rate band is set at £325,000 (or £650,000 if your spouse or Civil Partner died before you and left their estate entirely to you).

If you own your home and are passing it to your issue then you may also be entitled to the Residence Nil Rate Band (RNRB) which can be up to £175,000 per person, depending on the value of the property in question.

If your estate is worth more than the nil rate bands then the excess is taxed at 40%. Many estates do not exceed the allowed levels and so Inheritance Tax is not payable in such circumstances.

Inheritance tax is usually payable before a Grant of Representation can be applied for and so funds will have to be released from a cash source in order to achieve this. HM Revenue & Customs can be approached to see if any due tax can be deferred to the point where the assets can be realised (after the issue of the Grant) although there can be additional interest payable. Failing this if there is insufficient cash then the Personal Representatives may have to consider a loan to fund the payment.

There are a number of allowances and exemptions that could be applied to the estate in order to minimise the tax that becomes payable and we would be happy to advise as to these. Most tax planning is best done well in advance of death, of course.

Changing the terms of a will after death

Odd as this may sound, there may be good reasons to amend a Will after a death. It can be an opportunity to carry out tax planning, or to re-direct assets to avoid family difficulties. Perhaps to place assets in trust for grand-children or different ‘sides’ of the family.

This is known as a Deed of Family Arrangement (or a Deed of Variation) and, where required, a Will can be changed at any time up to 2 years after the date of death of the deceased. Even if no Will was made, the terms of the statutory trusts that arise on an intestacy can be changed in the same way. Note that any person who will receive less after the change than before it must consent to the Deed.

Payment Of Funeral Accounts and Inheritance tax

A bank or building society (or, indeed many financial institutions) will allow cash funds to be released from the account or portfolio in order to meet the costs of a funeral - or to pay Inheritance Tax to HMRC. We would certainly look to deal with this aspect as a priority when administering an estate.

Costs and Expenses

We will always tell you, at the outset, the level of our anticipated charges and expenses. Every estate is different in terms of overall value, or types of assets, or range of distribution to beneficiaries – and so we tailor our charges to what we think will be involved.

In most cases, employing a local solicitor will prove more cost-effective than using a bank or similar entity – and we are, by definition, local and available to talk to when you need us. If you find it frustrating to contact a call-centre and speak to a different person each time you call – then you will find it a refreshing change to deal with us.

You are likely to find that other organisations, such as banks or corporations, tend to operate on a sliding-scale charge based on the value of the estate but also have a number of ‘bolt-ons’ which can serve to increase the cost of the exercise quite dramatically. Don’t just take our word for it – ask!

We have prepared an example showing our likely costs – and the expenses that you will be asked to meet – which we hope you will find helpful. To view, please click the link below:

Estate Administration - Costs Guide