Probate and Estate Administration
When someone dies, their “estate” (broadly this means everything he or she owned) has to be dealt with (“administered”) – a process that is often referred to as “Probate”.
In fact, a Grant of Probate is an Order of the High Court which validates a person’s Will after he or she has died and confirms the authority of those named as Executors in the Will to deal with the estate.
A Grant of Letters of Administration is similar but it is issued by the Court when someone has died without a Will (“Intestate”). The law sets out who is entitled to apply for a Grant of Letters of Administration to be the Administrator and also who is entitled to benefit from the deceased’s estate where there is no Will.
Probate or Letters of Administration is not always needed. When a deceased’s only assets do not exceed more than around £15,000.00 in Bank or Building Society Accounts, Banks and Building Societies will often waive the requirement for the Grant and release money on its own form of Declaration. Care must be taken before signing any Declaration as it is treated as sworn evidence and could be used if a Probate dispute subsequently arises.
There are many steps to follow when someone dies, some of which are:-
- Register the death and arrange the funeral
- Find out if there is a Will
- Find out what is in the estate. It is important to find out not just about the deceased’s assets but also about any liabilities that there may be such as Credit Cards and Loans
- Apply for the Grant of Probate or Letters of Administration, including submitting a Return to HM Revenue and Customs for Inheritance Tax purposes.
- Collect in the deceased’s assets and pay any liabilities. Care must be taken because Executors or Administrators could face personal liability if liabilities remain unpaid or they may face other complications if an estate is insolvent.
- Prepare Estate Accounts to show what was in the estate, what has been paid out and what is left for the beneficiaries. The beneficiaries are entitled to approve the Estate Accounts so that they can be satisfied that they have received their due entitlement, either under the deceased’s Will or according to the Intestacy Rules.
Being an Executor or an Administrator of an estate should not be undertaken lightly. There is a significant amount of responsibility, administrative and legal. It is not unusual for the process to take up to a year to complete (even longer if inheritance tax has to be paid) and an Executor or an Administrator can be held personally responsible if any mistakes are made; which is why it can be helpful to appoint a Solicitor to relieve some of the burden and give peace of mind during difficult times.