WHAT IS PROBATE
After a death has occurred an executor named in a valid will or entitled next of kin, where there is no valid will, have to follow a legal process in order to value an estate, pay any Inheritance Tax (IHT) due, release assets, pay any debts and legacies and distribute any residue.
The holders of most assets will require a Grant of Representation to release or transfer certain assets. These assets usually consist of money held in banks, bonds, ISA’s, shares, pensions, property, life insurance etc.
This means that the holding institution will normally require either: -
- A Grant of Probate - if there is a valid will
- A Grant of Letters of Administration - if there is no will (intestacy)
Obtaining either type of grant from a section of the Court known as the Probate Registry guarantees the holding company that the person claiming the asset is legally entitled to it.
The legal process of applying for either type of grant is very similar and is often referred to as “applying for probate” in both instances.
The demanding application process also ensures that HMRC can assess and collect any Inheritance Tax that may be due.
Only once a grant has been obtained can assets be sold or transferred according to a valid will or the rules of intestacy. So obtaining a grant is often the first stage in administering an estate. Normally assets are “frozen” after death until a grant has been obtained.
Executors and next of kin normally appoint the services of a professional company like Valued Estates to deal with the entire process on their behalf because of the complexities involved and possibilities for errors to be made. Our expertise saves families a lot of time and means avoiding potentially costly mistakes.
The whole process allows time for all other estate matters to be finalised along the way and are normally included in the administration process.
These can include: -
- Property sales or transfers
- Direct debits
- HMRC income Tax repayments and rebates
- DWP repayments and rebates
- Business assets
- Foreign assets
- Joint assets
- Care fees
Some of these Government authorities are now initially alerted by the useful “Tell us Once” service offered when registering a death. This prevents excessive overpayments of state pension and benefits. Privately held assets such as savings and pensions need to be alerted separately. Any repayments due to either state or private institutions are normally dealt with after a grant is obtained and monies released.