Reports about the controversial plans to increase probate application fees payable after death have hit the headlines recently. They had been due to rise from £155 or £215 to up to £20,000 for some estates in England and Wales and critics have called this a tax on death. The general election has put paid to this, at least for now, but, what is probate, and why is it needed?
In some cases, transferring assets to the person entitled to them after death, can be a relatively straightforward exercise, and probate may not be needed- this could be where all the assets are jointly owned, or the value in the bank is below a certain level, but take legal advice to be sure.
In other cases, nobody can access the assets in the estate until probate is available.
When someone has made a will, what they own when they die goes to those they named in their will (known as the beneficiaries), but the person who passes those assets to the beneficiaries is the executor. The will names the executor and the executor obtains the grant of probate.
For those people haven’t made a will (which could be as many as 2/3rds of the population) the Intestacy Rules dictate who receives what and who has authority to cash and distribute the assets of the estate, called the administrator. Because the law dictates who is entitled to be the administrator, if you don’t make a will, you have no control over who will be administering your estate.
The Grant of Probate or Administration is the document (produced by the Probate Registry which is part of the Court Service) which names the executor or administrator and as a result confirms their authority to administer the estate.
The Grant of Probate or Administration is only produced after the Probate Registry has checked that the person applying as executor or administrator is entitled to be appointed. It’s a formal process, and the application goes hand in hand with a full statement of the assets and liabilities of the estate, and a calculation of how much inheritance tax (if any) must be paid to HMRC.
Once obtained, the grant of Probate or Administration is produced to the various banks etc., which rely on it to close accounts and pay the person entitled (the executor or administrator) so they can distribute the estate to the beneficiaries, in accordance with the terms of the will or as dictated by the rules of intestacy where there is no will.
By making a will, you can be sure that the trusted person named by you as your executor, is the person who obtains probate, and administers your estate.
Please contact Christine Pick if you would like to discuss making a will.