When is Probate Necessary? Essential Insights for Executors and Heirs

When someone passes away, their financial affairs must be sorted out. This process, known as probate, ensures their estate is distributed according to their wishes or the law if there is no will. This blog will guide you through key aspects of probate, its requirements, and the steps involved, making it easier to navigate during a challenging time.

Understanding Probate and the Probate Registry

What is Probate?

Probate is the legal process of managing a deceased person’s estate. This includes gathering their assets, paying off any debts, and distributing the remainder of significant assets to beneficiaries.

The Probate Registry is a government body that oversees this process. It issues a legal document called a Grant of Probate, which gives the executor or administrator the authority to release funds to handle the deceased person’s estate.

Why is Probate Necessary?

Probate ensures that:

The estate is distributed according to the deceased person’s will or the law.
The executor or administrator has legal authority to manage the estate.
Any debts, taxes, or obligations are settled properly.

Without probate, assets may remain inaccessible, causing delays for beneficiaries

Probate Requirements and Estate Administration

When is Probate Required?

Probate is necessary if the deceased’s estate includes:

Solely owned property or land.
Savings in bank accounts or investments.
Other high-value assets.

What Does Estate Administration Involve?

Administering an estate involves several steps:

1. Valuing the Estate: Includes identifying and calculating the value of the deceased person’s assets, such as bank accounts, property, and investments.

2. Paying Off Debts: Includes outstanding bills, loans, and taxes.

3. Distributing Assets: The remaining assets are distributed according to the will or legal inheritance rules after the debts are settled.

A Grant of Probate is usually required to access the deceased’s financial accounts and legally manage their estate.

Joint Ownership and Probate

In some cases, probate may not be needed. This depends on how the deceased person’s assets were owned:

Jointly Owned Bank Accounts

If the deceased shared a bank account with someone else, the funds typically pass directly to the surviving account holder. The bank must be informed of the death to update account details.

Jointly Owned Property

For property already held jointly in joint names, ownership automatically passes to the surviving co-owner. However, the Land Registry must be updated to reflect the change in ownership.

Foreign Assets and Probate

Managing foreign assets can complicate the probate process. Each country has its own laws regarding inheritance, for example, so professional advice is often necessary.

What to Know

If the deceased owned property, bank accounts, or investments abroad, you may need to follow probate laws in that country.
Consulting legal experts in the relevant jurisdiction can help ensure the process runs smoothly.

Life Insurance Payments and Pension Funds

Life insurance and pensions often bypass probate, depending on how they were set up:

When Probate is NOT Needed

If the the deceased person named a beneficiary on their life insurance policy or pension, the funds go directly to that person.

When Probate IS Needed

If death certificate show no beneficiary was named, the payout forms part of the deceased’s estate. In this case, probate may be required to release the funds.

What Can Be Done Before Probate is Granted?

While waiting for a Grant of Probate application, certain tasks can be completed to streamline the process:

Secure Assets: Ensure the deceased person’s property is locked and valuables are safe.
Gather Documents: Collect key documents, such as bank statements, property deeds, and insurance policies.
Notify Organisations: Inform banks, utility providers, and government agencies of the death.
Prepare Tax Information: Begin calculating any income or inheritance tax due.

These preparatory steps can prevent delays once probate is granted.

The Consequences of Not Applying for Probate

Failing to pay or to apply for probate when it is required can lead to serious complications:

The deceased’s assets will remain frozen and inaccessible.
Beneficiaries may face delays in receiving their inheritance.
In cases where the family home is solely owned by the deceased, the surviving spouse or dependents may be unable to make legal changes to the property.

Applying for probate ensures the estate is properly administered and avoids these issues.

How to Apply for Probate

The application process varies depending on whether the deceased left a will:

If there is a will

Complete a PA1P form to apply for probate.

If there is no will

Submit a PA1A form to apply for letters of administration, which serve a similar purpose.

For deaths occurring on or after 1 January 2022, estates meeting the excepted estate criteria do not require an IHT205 form. However, if applicable, you must submit an IHT217 form to HM Courts and Tribunals Service (HMCTS).

Finalising the Estate

Once you receive the Grant of Probate, the final steps of estate administration can begin. This includes:

Accessing Assets: Collect funds from bank accounts, sell property if needed, and settle remaining debts.
Paying Taxes: Ensure any outstanding income or inheritance tax is paid.
Distributing Inheritance: Transfer money or property to the beneficiaries named in the will (or according to the law if there is no will).

It is the executor’s or administrator’s responsibility to take legal proceedings to ensure the estate is handled correctly and that all legal requirements are fulfilled.

Conclusion

Probate may seem daunting, but understanding its purpose and process can help you handle it more confidently. Executors and heirs should be aware of their responsibilities and seek professional advice when needed, especially in complex cases with circumstances like joint ownership or foreign assets.

If you need assistance with probate or managing a property as part of an estate, reach out to our experienced team for guidance. Let us make the process simpler and stress-free for you.