Key probate considerations

Do you always need a grant of representation as an executor, and is a solicitor always required? Naomi Keetley explains.

What is probate?

Probate is typically the word people use to describe the legal and financial processes involved in dealing with the property, money and possessions of a person who has died (the deceased).

The person charged with responsibility for dealing with the estate of the deceased is required to gather in any assets, pay liabilities (including post-death liabilities, such as inheritance tax and probate fees) and thereafter, distribute the estate to the people who are entitled to a share in the deceased's estate (beneficiaries) after all liabilities have been settled in accordance with the deceased's will, or the intestacy rules.

This process has to be carried out by the person who has the legal authority to deal with the affairs of the deceased. If the deceased has died leaving a will, the named executors in the will, assuming they are able and willing to act, will have authority derived from the will to deal with the estate of the deceased. 

That said, despite the executors’ authority being derived from the will, many institutions still require the executors to apply for a grant of representation (also commonly known as a grant of probate) to ratify that authority.

If the deceased died without a will, there is a strict order of priority as to who will have authority to apply for a grant of letters of administration.

When is probate required?

Probate is not always required. For example, if the estate is of low value (under £5,000), or if property, such as a house or bank accounts, are held in joint names. In such circumstances, provision of a death certificate may be sufficient for the assets to be transferred to the surviving joint owner.

As a general rule of thumb, if an estate has any of the following, it is likely that probate will be required:

  • property, including land
  • agricultural or business assets
  • a bank account with a balance over £5,000
  • life insurance or pension that is paying a lump sum to the estate
  • shares worth over £10,000

Each financial institution has its own rules, and despite an estate not requiring probate, the institution holding the assets can still insist on a grant of representation before releasing a deceased’s assets.

Do I have to use a solicitor for grant of probate?

There is no requirement to use a solicitor or licensed person for probate. It is, however, worth remembering that probate is a legal process that must be carried out in a prescribed way.

Those administering the estate must swear an oath promising that the information they give is true to the best of their knowledge, and that they will deal with the estate in a right and proper manner.

Over a quarter of a million grants of representation were issued in 2015, with 63 per cent of those application submitted by solicitors.

Deciding whether you want to use a solicitor can be simplified with three questions:

Do you have the capability?

Even the task of identifying the beneficiaries can be shrouded in legal complications, for example, if the will identifies gift are to remain within the descendants of the initial beneficiary (per stirpes) or for the identified beneficiary only (per capita), or if the estate is to pass pursuant to the rules of intestacy.

A recent school of thought suggests that accountants may be better placed to administer probate, given the financial work involved. But it is generally accepted that the use of an accountant to carry out probate is only applicable if the estate is uncontested.

Citizens Advice suggests that you should always seek legal advice if, for example:

  • the terms of a will are not clear
  • part of the estate is to pass to children under the age of 18
  • the person who died owned land or property abroad
  • the person who died owned a business
  • anyone is likely to dispute the will

Do you have the capacity?

In addition to the legal and financial complexities, the time it takes to administer the process is also a consideration for many. The Law Society advises that it’s not unusual for probate to take up to a year, perhaps longer, if things are not straightforward.

Can you afford the cost?

One final consideration is the cost, which varies according to the complexity of the estate and the nature of the will/lack of will. If you instruct a solicitor to administer probate, they will typically charge either on an hourly rate, time spent basis, or they may charge based on a percentage of the value of the estate. Either way, solicitors are obliged to provide you with detailed costs information from the start. Some solicitors may be prepared to work on a fixed fee basis.

Typically, solicitor costs are in the region of 2 per cent of the estate value. It is worth remembering, however, that all professional costs associated with applying for probate, including the probate fees and solicitor's costs, are classified an estate expense and are deductible prior to any distributions to the beneficiaries are made.

Are there any other options?

Even if you have a substantial and complex estate, it may be possible to distribute assets without requiring probate by making use of trusts. This however, is something which needs to be considered pre-death as part of the person's estate planning.

Assets placed into certain trusts are considered outside of an estate for the purpose of probate and therefore can be distributed to the beneficiaries of the trust without incurring the cost or delays of probate. Assets placed into a trust could also mean they are taken out of the estate for inheritance tax purposes, as well as protection, on death and during your lifetime against divorce, premature death of a beneficiary and bankruptcy, to name a few.

If you wish to use a trust, this is a particularly complex area which requires advice from estate planning specialists such as solicitors and accountants, often working together on complex estate planning cases.

About the author

Naomi Keetley is a barrister intermediary at Swinton Legal Limited, part of Swinton Accountants. Swinton Legal is a member of the Legal Services Guild.

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