Probate and Administration
When someone dies, in order for their property, money and possessions (their ‘estate’) to be dealt with, the legal right needs to be applied for. This is called ‘applying for probate’ or ‘letters of administration.
If the person who died has left a Will, then it will be probate which needs to be applied for by the executors or trustees whereas if they have not made a Will then letters of administration will need to be applied for by either the next of kin or close family members.
The person who applies for the probate or the letters of administration are then the ones who distribute the estate, if there is a Will in place then it will be under the terms found within the Will whereas if there is no Will in place then it will be under the rules of intestacy as shown in this flow chart here.
The process for applying for probate or letters of administration is the same.
- The whole estate needs to be valued and then reported to HMRC, organisations such as banks or utility providers need to be contacted in order for the person’s assets and debts to be valued.
- Depending on how much the value of the whole estate is, determines how much inheritance tax (or not) will need to be paid on the estate. If the estate is wholly passed to the deceased’s spouse or civil partner or a charity, then inheritance tax will not need to be paid. Also, if the value of the entire estate is below the Tax threshold of £325,000 then inheritance tax will not be paid. Alternatively, if the deceased was widowed or had decided to give their home to their children then this could make the tax threshold higher.
- Dependant on the situation there are different forms from HM Revenue and Customs which need to be filled out this could either be the IHT 205 or the IHT 400 depending on how much the estate is worth. With the IHT form a PA1 (application for probate) will also need to be filled out.
- These IHT forms will be sent to HM Revenue and Customs in order to be checked and stamped and passed to the Probate Office.
- An oath will be sent which needs to be sworn, this will then be sent back to the Probate Office and the grant or letters of administration will then be issued.
- As an executor or administrator, it is their responsibility to pay any inheritance tax due, collect the estates assets, pay off any debts and distribute the assets to the named beneficiaries within the will or under the rule of intestacy.
This may sound complicated, but this is something we here at pro-law deal with regularly, so we can help. Do not hesitate to contact us today for help with Probate and Administration.