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Two Together: Save £100!
Save £100 when you purchase two funeral plans together. Call us for more details.
When someone dies, it leads to a surprisingly large amount of admin. Depending on whether or not you are the executor of their will, you may suddenly find that you have a lot of new responsibilities to attend to. One such responsibility is applying for probate; something which can cause anxiety and confusion. In this article, we will discuss the concept, asking what is probate, how does probate work, what does probate involve, and how to apply (among other things).
Before we begin, we’d just like to say, if you’ve come to find us here, we know that you could be in the position of applying for probate now. We also know that that can be difficult for all kinds of reasons. Just to reassure you, you are in the right place. Not only can we offer some guidance on the probate process, but we can also help you with your funeral needs, if need be.
Key Takeaways
Probate is the legal right to administer the estate of someone who has died according to their will. When someone dies after having written a will, their estate will need to be executed and managed by someone they have left behind. The person who has died will have specified in their will who they want to do this job: the person (or people) could be loved ones, such as children, a spouse, or siblings; friends; or even a solicitor. The technical term for this person is ‘executor’, and in agreeing to oversee the estate and to divide it according to the provisions in the will, they are accepting a solemn responsibility. For that reason, writing a will and selecting the executor(s) is a critical part of end-of-life planning.
Before they can administer anything, they will need to apply for probate. Only the executors of a will can legally do this. Once granted (by the Court), the estate can then be administered. People often confuse ‘estate administration’ and ‘probate’ with one another; to put it bluntly, probate is simply a part of the wider estate-administration process, as there are all kinds of different elements of estate administration (such as dealing with trusts, and calculating the value of the estate for inheritance tax purposes).
In short, probate is the legal right to act as the executor of someone’s state.
When asking ourselves how probate works, we need to think about what is involved with the application process, and what having probate involves.
Primarily, with a probate application, the court will seek to validate the authenticity of the will of the person who has died, and then grant the right to administer the estate to the applicant(s). In validating the will, the court will confirm that it has adhered to the necessary legal requirements of the UK Government, i.e., that:
Before the executor applies for probate, they will need to evaluate the estate. That’s because a ‘final account’ of the estate will need to be submitted for inheritance tax purposes along with the application for probate. (You could be forgiven for thinking that this part should follow the probate application, but it actually needs to be done before). This may involve tracking down lost or dormant assets after the testator has died, which could be tricky. That’s why it’s important to talk about death and dying with our loved ones whilst we still can, as it could allow us to broach the subject of estates before it’s too late.
Once the estate is accurately valued, assets have been traced and tallied, and probate has been applied for and granted, the executor then needs to begin the job of applying the end-of-life wishes documented in the will. This may relate to how assets should be divided among their surviving children and loved ones (as well as charitable causes and so on), but it could also relate to other matters, such as funeral wishes, end-of-life celebration ideas, or even cremation ashes ideas. They will also need to pay the inheritance tax bill charged by the government once the final account has been seen.
The executor is not necessarily legally bound to adhere to every provision of a will (particularly if they are impractical or impossible). But for matters not relating to the apportionment of assets, the will can serve as a valuable guide, and help the executor to do right by the person who has entrusted them with their final wishes.
The probate application process is essential before administering the estate of a loved one. Beforehand you will need to be sure who has to apply for probate, as well how to apply for probate.
Only the executor of the will has the right to apply for probate. They will be named as such in the will, and will usually be aware of the fact that they have been nominated for the responsibility in advance.
When someone dies without a will, it doesn’t mean that they won’t have an estate. In effect, all of the same rules will apply in this situation as when someone does die with a will, but the family may find the process more difficult. If someone has died without a will, it likely means that their death was sudden or unexpected, or that they didn’t start any end-of-life planning. The family can find themselves struggling to pick up the pieces, putting the estate together, planning the funeral, and dealing with their grief.
They will have to decide amongst themselves who, as next-of-kin, should apply for the alternative to probate when someone dies intestate, which is called a Grant of Letters of Administration. In effect it allows the applicant to do the same thing as they would if they had been granted probate. It’s also important to remember that there are default rules in place governing what percentages of the estate people can inherit when someone dies without a will in place. These will need to be followed.
There are a number of key steps to go through when applying for probate:
Probate should be granted to successful applicants within 16 weeks of applying. However, there are circumstances in which there could be big delays, such as if family member(s) dispute an executor’s fitness to hold the right of probate, or the authenticity of the will upon which it rests.
Whether or not a will is executed via probate will influence how assets are distributed.
Probate affects inheritance by distributing it according to the provisions of the will. In other words, the person who has written the will has decided how they want their estate to be apportioned after they die; once probate has been granted, the executor must faithfully distribute the assets accordingly.
Beneficiaries will receive their inheritance after probate has been granted, and after any debts due on the estate have been paid off; the executor will also need to pay an inheritance tax bill based on the value of the estate submitted when probate was applied for. As a result, it can take quite a long time for anything left in the estate to be paid out, depending on the length of time it takes to go through each individual step.
For that reason, families who are relying on the value of an estate to cover funeral expenses, for example, may find themselves struggling in the meantime to find the money at short notice. The phase of benefitting from a will may arrive months after the testator’s funeral, with families sometimes needing to wait for a long time to be reimbursed.
Once probate has been granted, the estate can be processed as specified by the testator in their will. In the course of administering someone’s estate, all of their financial loose ends will need to be tied up too. People often wonder what happens to bank accounts when you die: the short answer is that the executor of the will needs to close them on your behalf. This goes for any other financial institutions, such as investment firms, and even utility companies and network carriers.
There is a fee of £300 attached to probate applications for those executors who are overseeing an estate of £5,000 in value or over. For those with estates below this threshold, there is no charge.
One of the aspects most likely to delay things is the gathering together of all the assets of the person who has died — particularly if they have died, either without a will at all, or without having briefed their executor on their financials before they died. If you need to embark upon a process of unearthing these assets, it could be time-consuming and admin-heavy. In the meantime, the probate application process won’t be able to move forward at all, and therefore it will take longer and longer for the assets to finally be distributed.
Another big cause of delay relates to disputes arising within a family over matters of the estate. Whether because family members are disputing the authenticity of the will (for example by arguing that the testator didn’t have mental capacity when they made it), or because they want to argue that a named executor in the will is unfit for the task, such disputes can add many months to the resolution time frame. You can head to the UK Government website for more guidance on what to do around this, if necessary.
There are a few ways in which you can avoid the inheritance tax that would otherwise accrue when discharging an estate through probate.*
If you have a spouse, and you leave your full estate to them in your will, then there is not normally inheritance tax to be paid in this case. We each have an inheritance tax threshold of £325,000; if our estate is worth more than this, then anything above it is taxed at 40%. The threshold can be increased to £500,000 if we leave our house to our children or grandchildren. Furthermore, if our estate’s value is above the taxable threshold, if we should leave 10% of the value over this threshold to a charitable cause, we can reduce the tax rate from 40% to 36%.
Aside from this, we can set up a trust within which to hold certain assets for the beneficiaries of our will. Depending on whether it has been set up properly (and which type of trust has been chosen), the value of any assets in trust can be subtracted from the value of the estate for inheritance tax purposes, as, technically speaking, they are no longer the testator’s property, but that of the trustees administering the trust.
You can reduce the inheritance tax bill your estate will need to pay by being proactive. For instance, you can make gifts of your assets in your lifetime to beneficiaries, and, assuming you do not die within 7 years of having given them, those assets may no longer contribute to your estate’s inheritance tax bill. However, if you do die within this period, then there could be a tax bill payable by the recipient of the gift proportional to the value of the gift itself. The recipient would be contacted by HMRC in this case.
*Remember: ‘tax avoidance’ refers to legal methods of reducing the tax you need to pay. ‘Tax evasion’ is the act of reducing your tax burden via illegal means.
Thank you for reading our article; we hope you found it useful. When asking yourself ‘what is probate’, we often don’t know where to begin, but taking it one step at a time is key. As you may have realised by reading, being prepared for what comes next is key. By thinking ahead about the end of our own life, we can put a lot of things in place which our family would otherwise need to deal with. One such thing is planning for our own funeral.
Aura is the UK’s top-rated national ‘Cremation Services’ provider with a Trustpilot rating of 4.9/5 stars. We offer our prepaid funeral plans to families up and down mainland Britain, and, thanks to our Aura Angel team, we do so with an industry-leading level of compassion. We are a family company, set up by Paul Jameson in 2019, following his 2017 diagnosis with motor neurone disease. Today, alongside his son, David (our CEO), and family friend, Ben (our COO), we all work to make sure that you will never receive a level of care below that which Paul and Dave would expect for their own family.
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