When someone has died, there are certain processes that need to be completed before the estate can be distributed to beneficiaries. Probate is the legal process of managing the estate (property, money and possessions) of an individual that has passed away.
What does probate involve?
Before the assets of the deceased can be shared among those that are named in the will, the executors or next of kin may have to apply for probate first.
The process can be broken down into five stages:
- The first stage is identifying the deceased’s assets such as property, and their liabilities such as outstanding debts. This will determine the overall value of the estate.
- The second stage is paying inheritance tax to HM Revenue & Customs where necessary, and submitting the correct inheritance tax return.
- The third stage is applying to the probate registry for the Grant of Representation. This confirms the legal authority to administer the estate of the deceased. After the grant has been issued, the process of liquidating assets, settling liabilities, paying administration expenses, and remaining taxes would begin.
- The fourth stage is preparing the deceased’s accounts showing all payments in and out of the estate, and the remaining balance that will be distributed among beneficiaries.
- The final stage of the process involves transferring the remaining assets to the beneficiaries named in the will.
Losing a loved one is a difficult time, but this time can become even more complex if the deceased’s estate is not managed correctly. In most cases, a probate is essential in order to be sure that you are paying the correct inheritance tax to the government. The amount of tax you pay depends on the overall value of the estate.
Probate applications can take between 4-8 weeks to process, so it’s important that you do not make any significant decisions about the deceased’s estate until you have received the grant of probate, also known as letter of administration. Copies of these should be sent to the organisations that hold assets for the deceased, for example their banks.
Once you have probate, the executors of the estate will be able to access any financial assets to pay any outstanding debts and taxes. After liabilities and taxes have been paid, the remaining assets can then be distributed as detailed in the will. If the deceased had no will, the remaining assets will be distributed according to the law.
T K Williams-Nelson