As a person who deals with estates constantly, I often take it for granted that individuals understand what it means to “apply for probate” and why you may need to do this. In case you, like many others, have ever been confused by this concept, here is a brief explanation:
What is Probate?
The Grant of Probate is a document which confirms that the individuals named are entitled to deal with the estate of a deceased person. This is required by financial institutions and the Land Registry before assets can be transferred or sold. Where there is a Will, the executors named derive their authority from the Will itself. Where some died intestate (without a Will) then a Grant of Letters of Administration, as it is known for intestate estates, is required to confirm the personal representative’s authority.
So I don’t need probate if there is a Will?
Not necessarily. This depends entirely on what assets are in the estate. If the estate includes property or shares then a Grant of Probate will almost always be required before the asset can be dealt with. In relation to bank accounts, each bank or building society sets its own limit at which they require the Grant to release funds.
So how do I apply for probate?
The process of applying for Probate requires the executors or personal representatives to gather in valuations for all the assets and liabilities in the deceased’s estate. They use this information to complete an inheritance tax return. The value of the estate, and the allowances being claimed, determines what type of inheritance tax return is required. Simple estates with no inheritance tax to pay can usually complete the IHT205 whereas more complex estates or estates that have an inheritance tax liability must complete the full inheritance tax return (IHT400). Where an IHT400 is required this must be sent to HMRC before the application for Probate can proceed.
Once the inheritance tax return is complete the executors or PRs then need to complete the probate application form. This has recently moved to an online process in most cases, although more unusual cases need to complete a paper return which is sent to the Probate Registry. In all cases the original Will (if there is one) is also sent to the Probate Registry.
Once the probate application has been processed the Probate Registry issues the Grant of Probate or Grant of Letters of Administration which can be used to deal with the deceased’s assets.
So why do I have to do all this paperwork?
Tax! The probate process allows HMRC to confirm what assets are in the estate and to check that all inheritance tax due has been paid. As an executor, it is a requirement to ensure that all liabilities of the estate are settled, including inheritance tax.
You know what they say: nothing in life is certain except death and taxes!
If you would like help applying for Probate please contact Ashley Minott on 01494 893518.