Dealing with a deceased person’s estate – a process known as ‘probate’ – can be a scary and challenging task.
It can take between 3 to 4 months to complete, while more complex instances can take longer.
Most executors do not know the probate process initially, so here is a quick guide to help you understand what is involved and how to carry out your duties successfully.
If you are not an executor and just a beneficiary, this tutorial will explain the probate process and how long probate takes before receiving your inheritance.
This blog post is divided into the following sections:
- What is Probate?
- How much does probate cost?
- Who is the executor of the Will?
- What are an executor’s responsibilities?
- What is a grant of probate?
- Is it necessary for you to apply for a grant of probate?
- When is it necessary to pay inheritance tax?
- What is the procedure for probate?
- How long does it take to get probate?
- Final thoughts
What is Probate?
A right to deal with the deceased’s property, money and possessions (estate) is called probate.
However, the phrase is now more generally used to cover the entire process of administering someone’s estate, from obtaining court approval through paying inheritance taxes and dividing assets.
How much does probate cost?
The cost varies depending on whether you do it yourself or hire a probate specialist or a solicitor.
Going alone is less expensive than hiring a specialist, but it is best suited to individuals dealing with simple estates. However, if the estate is complicated, spending a little more money upfront may be well worth it in the long run.
In England and Wales, if the estate’s value is £5,000 or more, the application price for probate is £273 effective 26 January 2022. Previously it was £215 if you do it yourself, and If you apply through a solicitor, the charge is reduced to £155. However, you will almost certainly have to pay a solicitor’s fee.
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The cost is £261 in Northern Ireland for an estate worth more than £10,000 and None if it is less than £10,000.
The cost is £200 in Scotland for estates worth over £5,000 and none for those worth less than £5,000.
Extra copies of the grant of probate are £1.50 each. Also, It is a good idea to order a few additional copies just in case you need them during the administration process.
If you hire a probate specialist, the overall cost will be determined by whether or not the specialist charges:
- a fixed amount based on the scope of the task
- an hourly rate
- A specialist also takes a certain percentage of the estate’s worth as their chargers. Unfortunately, this cost is often calculated as 1% to 5% of the estate’s price plus VAT, making it incredibly expensive for individuals dealing with massive estates.
Many banks also provide probate and estate administration services, but these can be more expensive than hiring a professional, so get a few estimates before deciding.
Who is the executor of the Will?
The executor is the one who is responsible for carrying out the processes of the probate process.
The executor will be the next if the deceased has not named anyone.
It is also why choosing one (and making a Will in the first place) is so important, because the next of kin may not be the right person to take on this job.
What are an executor’s responsibilities?
Executors are in charge of paying any outstanding bills and transferring assets to beneficiaries from the estate. The following are some of the tasks on the list:
- Securing all of the estate’s assets
- estimating the value of the estate
- Calculating and paying off any outstanding debts (e.g. a mortgage, loan or credit card balance)
- Making payments and completing inheritance tax forms
- Taking care of funeral expenses
- Making distributions to the estate’s beneficiaries
Much of this may be unsafe, but you may hire a solicitor to manage the procedure.
What is a grant of probate?
A grant of probate is a legalised document that is used to access bank accounts, transfer assets, and pay debts after someone passes away.
If the person left a will, this document is called a grant of probate.
A grant of letters of administration is used instead of a will if they did not leave one.
Both agreements work similarly, granting legal authority to a named individual to handle the estate of a deceased person.
To act as executor of a person’s Will, you must first obtain permission from the court. It is known as applying for a grant of probate.
You do not need to get a grant of probate if one of the following applies:
- The estate is small and simple (usually less than £5,000 in bank accounts), or
- Under the right of survivorship, if the deceased person possesses joint assets, these assets will transfer to the surviving co-owner.
When is it necessary to pay inheritance tax?
Even if you do not believe any tax is required, you must file an inheritance tax return together with your application for probate.
It is a good idea to get inheritance tax planning guidance at this point to ensure that you are paying the correct amount and handling things in the most tax-efficient manner possible.
What is the procedure for probate?
On average, probate takes between three to four months to complete.
If you are an executor, here are the essential steps you will need to bring:
1. Register the death
In England, Wales, and Northern Ireland, you must do so within five days of the date of death, and in Scotland, you must do so within eight days.
This stage is to obtain the death certificate, which you will need to begin the Will-writing process.
2. Notify organisations and beneficiaries
Contact any firms that the deceased did business with so that the account may be closed and any additional charges can be avoided.
3. Fill out and submit your grant of probate and inheritance tax forms online
You will need to send paper versions of some documents, like the Will.
There is a lot to cover, so create a checklist to avoid overlooking anything. Probate should take about eight weeks, although it could take longer if incomplete or wrong forms.
4. Pay inheritance tax
You may require a loan to do so (the cost will be payable before the estate’s assets are released), so make arrangements as soon as possible.
5. Pay off debt
Includes obligations such as credit card balances, mortgages, and other loan agreements (for their car or furniture, for example), but not student loans.
If the estate does not have enough money to satisfy the obligation, you may need to work out a payment scheme with the creditor.
6. Claim life insurance
If the person who died had life insurance, mortgage, or funeral insurance policy, contact the provider to make a claim.
This money may be put to good use to pay estate taxes or burial expenses.
7. Distribute the assets
Whatever is left should be distributed to the beneficiaries by Will’s desires.
Unless the Will specifies otherwise if someone mentioned in the Will dies, their portion of the estate will usually be returned to the estate and distributed among the other beneficiaries.
How long does it take to get probate?
Within eight weeks of sending the required papers, you should receive the grant of probate or letters of administration. However, it may take longer if you need to provide further information.
Due to probate delays caused by the switch to a new online system for applications and a staffing shortfall during the pandemic, some persons have had to wait 14 weeks or longer.
Getting probate started as soon as possible is one of the best strategies to reduce the impact of delays.
We hope you now know what probate is and how it works.
You can also talk to a financial advisor about some of the more challenging components of probate, such as inheritance tax, life insurance, trusts, and liquidating assets (such investments) for distribution.