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Disputes can occur if beneficiaries decide to challenge the Will, are disagreeing with the way the estate is being distributed, or someone who expects to inherit has been left out of the Will. Using a solicitor to handle this process can help to reduce tension and maintain family relationships as they have no personal interest in the estate.
If a mistake is made when distributing assets or dealing with an estate, executors remain personally liable. Similarly, if an executor fails to act, they may also be personally liable to the beneficiaries in relation to the payment of any losses as a result of those failures. Using a solicitor for probate greatly reduces this risk.
Upon reviewing the estate, it may become clear that some elements can be handled by the beneficiaries themselves, and others may need the guidance of a probate solicitor. It is not necessary for a probate solicitor to handle the entire process and costs could be minimised by dividing the responsibilities between a solicitor and the beneficiaries.
What is the probate process in the UK?
Generally speaking, the probate process in the UK can be broken down into four stages:
- Identifying and valuing the estate
- Calculating and paying Inheritance Tax
- Applying for the Grant of Probate or Grant of Letters of Administration
- Settling debts and distributing assets
Identifying and valuing the estate
Step one is to gather all the information and identify the assets and liabilities of the estate. Whether a Grant of Probate or Letters of Administration is needed depends on what the assets are, and how and where those assets are held. If there is a Will, a Grant of Probate is required. If there is no Will, or there is something wrong with the Will, Letters of Administration will need to be applied for.
Calculating and paying Inheritance Tax
It is not always necessary to pay Inheritance Tax (IHT) on an estate, so it is important to identify whether this is required before calculating any necessary payments. A report must be given to HMRC stating the Inheritance Tax position, including full details of the estate and its value. There are various thresholds, rules, and allowances which need to be considered and, if Inheritance Tax is due, the first instalment must be paid within six months.
Key information required includes:
- A copy of the original Will with any codicils
- Details of any gifts made in the seven years before death
- Details of any trusts established during the deceased’s lifetime
- Details of all assets and liabilities at the date of death
- Details of the estate of any deceased spouse, a copy of their Will and Grant of Probate
- Funeral invoices and expenses
Applying for the Grant of Probate or Grant of Letters of Administration
Once it has been established that either there is no Inheritance Tax to pay, or the relevant documents and applications have been made along with payment of the first IHT instalment, a code is provided which will allow the beneficiaries or acting probate solicitor to move forwards with the court application for Grant of Probate.
Issues with the previous stage can cause significant delays in receiving the all important certificate which will allow beneficiaries to move on to the distribution of assets. As soon as an application is stopped by the probate registry, it can take a long time to get things moving again so it is vital to get the application right.
Settling debts and distributing assets
It may come as some surprise, but the distribution of assets can often become a long and drawn-out process. Any remaining IHT, Income Tax, and Capital Gains Tax must be paid along with any other outstanding debts before assessing what assets remain and how they need to be distributed. This may be in line with a valid Will or the intestacy rules.
Many may not realise that Capital Gains Tax (CGT) is due if property or shares sell for more than the probate value, triggering a gain which must be reported and paid to HMRC. Allowances have decreased in recent years so there is more likely to be a tax liability for CGT.
It may also be possible to claim certain taxes back following corrections to the IHT account, for example, if assets are sold for less than the probate value within a certain period.
How long does probate take in the UK?
There is no set answer for how long probate can take in the UK. The initial process of gathering assets, assessing the estate and tax liabilities, making the relevant applications, and getting the Grant of Probate or Letters of Administration can be a quick and straight forward process for simple, low value estates with a valid Will. However, there are many added complications which can slow this process down.
The post-Grant administration and final stages of dealing with assets can go on for quite some time. There is now a requirement to register an estate that has gone on for more than two years with the Trust Registration Service. Even if it does not look like there is a trust in the Will, using the wording ‘to be held on trust’ will automatically create one. If the trust is not wound up and the estate is not administered within the two-year timeframe, there will be a different registration process to go through with HMRC.
DMH Stallard offers a free, 30-minute initial consultation to talk through the probate process with a solicitor. Probate is not a ‘one size fits all’ process and it can be quite daunting and varied. With an idea of the assets and accounts, a Will (if there is one), or an idea of the family if there is no Will, our solicitors can work out a process that will best suit you and your needs. Please call +44(0)3333 231 580 or contact us by email if you would like to arrange a free consultation.
