The Essential Probate (Part 1)

Following death, and once the funeral arrangements have been finalised, you should ensure that you register the fact of death using the government’s Tell Us Once service. You should also check the Deceased’s benefits, pension entitlements, and tax position. The next question is how to deal with the estate administration. This can be a prolonged issue, depending on the size and complexity of the same, however, we begin to break down the process below by way of outline, for simpler estates:

Step (1) establish whether there is a Will

A Will is a legal document that sets forth the testator’s wishes regarding the distribution of their estate upon passing away. An estate consists of everything you own – money, property and possessions. A Will is a private document, meaning that the writer of the Will (the testator) can choose not to share it with anyone. You may not know if the person who died wrote a Will. In any case, make an attempt to find it.

Speak to people close to the Deceased to ascertain whether they have any knowledge of the Will and its whereabouts. Search where the Deceased kept important documents; likely places are home files, safe deposit box, and local computer. The Deceased could of used a solicitor in the writing of a Will; keep an eye out for business cards or letterheads from law offices and call them to check. If the Deceased made it clear that they had a Will, but you cannot find it, then perhaps undertake searches with Will banks/registers (the largest being the National Will Register: Certainty).

You’ve found the original Will. The executors named on the Will are responsible for distributing the estate. However, you must first apply to the Probate Registry for a Grant of Probate (PA1P form). This is explained further in Step (3).

Only the original Will is valid in court; a copy may be admissible if there is proof the original has been destroyed (in a fire or flood), or if the original has been unintentionally lost by the testator. In the case that the original Will cannot be found, an application can be made to the Probate Registry for permission to apply Grant of Probate with a copy of the Will instead.

If there is no sign of a Will, it could be that the deceased did not write one; the deceased will be regarded as having died intestate. Their estate will be distributed according to the rules of intestacy. The rules of intestacy are slightly different depending on the country. An administrator will be appointed to deal with the estate (usually the next of kin). To become administrator, an application needs to be made to the Probate Registry to gain Letters of Administration (PA1A form). This is explained further in Step (3).

The rules of intestacy below apply to England and Wales.

• Married and has children: the spouse inherits all the personal belongings of the deceased + the first £270,000 of the estate + half of the remaining estate. The other half of the remaining estate is then distributed in equal shares between the children. In the case that a son or daughter has died, their children will inherit in their place.
• Married and no children: the spouse inherits everything.
• Unmarried and has children: the estate is distributed in equal shares between the children (once they reach the age of 18).
• In the case of jointly owned property, the surviving spouse will automatically inherit the other spouse’s share. The rest of the estate is then distributed to the spouse as the first £270,000 of the estate + half of the remaining estate. The other half of the remaining estate is then distributed in equal shares between the children.

It is possible to rearrange the way the Deceased’s estate is shared out through a Deed of Variation. This however can be complicated, so we recommend you get legal advice. A blog diving deeper into the rules of intestacy is currently being developed.

A collection of assets and liabilities help build an estate distribution account.

Step (2) assets and liabilities

Start by reviewing all the Deceased’s paperwork. Note down assets and liabilities. It is useful to gather all this information on a spreadsheet. Here we provide a template to fill in:

Assets and liabilities template

From this, the net value of the estate can be calculated. This is the value that will be distributed amongst the beneficiaries (the people receiving a share of the estate).

Contact organisations such as banks or utility providers informing them of the death (death certificate required). Find out what assets the deceased owned and what debts the deceased needs to pay out of the estate. It is common practice now that statements exist digitally; inform the organisation that you wish to gain access to the Deceased’s online accounts.

We advise that you keep a clear trail of statements relating to the death (funeral expenses, house clearance etc.). This will help build an estate account, and the distribution of the deceased’s estate can be calculated from this.

Valuation of property is needed at the time of death. A chartered surveyor’s report may be necessary (especially if IHT is at stake). Usually though, a valuation averaged from two or three estate agents should suffice.

Step (3) application forms

Before applying for probate or administration, you must declare the value of the estate to HMRC. There may be inheritance tax (IHT) to pay depending on the value of the estate. The standard IHT rate is 40%. There is no IHT to pay if either: the value of your estate is below the threshold of £325,000 (assuming that there were no gifts given prior to Deceased’s death) or you leave everything above the threshold to your spouse, civil partner, a charity or a community amateur sports club. If you give away your home to your children or grandchildren, this threshold increases to £500,000. IHT is only charged on part of the estate that’s above the threshold.

IHT is a complicated matter; if it is payable we recommend taking legal advice from a solicitor. The above only summarises the basics of IHT. We are looking to produce a blog explaining IHT in more depth.

If there is no IHT to pay, complete the IHT205 form. If there is IHT to pay, complete the IHT400 form. Once the value of the estate is declared to HMRC, you must wait 20 days after sending the tax forms to either complete the PA1P form (application for a Grant of Probate) or PA1A form (application for Letters of Administration). It can take up to 8 weeks to process your application (longer if there are delays). The fixed cost (cost of applying) is a minimum of £155. You can find any these forms on the .gov website, or by doing a google search. If the estate is complicated, a probate specialist or solicitor will generally charge 1-5% of the estate value or at their hourly rate.

Having practical steps to follow can make the process of dealing with the Deceased’s estate more manageable.