Following a bereavement, there are a number of tasks to be considered which can make an already difficult time even more challenging. Unfortunately, these tasks can often be complex and can include dealing with complicated legal and tax affairs. The process of dealing with someone’s affairs after they have passed away is known as estate administration, which is often misunderstood with the term probate. Although both terms are associated with the same process, they each have different definitions.
What is probate?
Probate (‘Confirmation’ in Scotland), also known as the ‘Grant of Probate’ or ‘Grant of Representation’, is the legal document obtained by the Executor(s), which gives them the authority to act in the administration of an estate where the deceased has left a Will. When someone dies without a Will, the Administrator(s), whose role is the same as an Executor, will apply for the ‘Letters of Administration’. To find out more about the roles and responsibilities of an Executor/Administrator, read our informative guide here.
The ‘Grant of Probate’ is required when the deceased owns a property in their sole name or if a financial institution (such as a bank, building society or share registrar) requires a ‘Grant of Probate’ in order to release funds. Financial institutions and organisations determine their own probate thresholds, therefore, probate may not be required in order to access funds. We recommend contacting any applicable organisations to understand their individual probate thresholds.
Additionally, probate is not always required if the deceased had assets in joint names, such as property, money, or shares. These assets will pass automatically, by survivorship, to the survivor unless particular arrangements have been made during their lifetime.
What are the steps involved in the probate process?
- Completing the probate application form
In England and Wales, the probate application form involves completing a PA1P (if there is a Will) or a PA1A (if there is no Will). You will also be required to submit an Inheritance Tax form to HMRC.
In Scotland, you will need to submit a C1, along with other forms (C5, C5SE or IHT 400) depending on the make-up of the estate.
- Submitting the application to the probate registry
After you have completed the application form, you will need to send all the details, including the death certificate, to the probate registry. Alternatively, you can apply for probate online if you have the original Will and death certificate, and have already reported the estate value. The ‘Grant of Probate’ can be obtained for the set government application fee of £215 if the estate value is £5,000 or over. If the estate is under £5,000, there is no fee.
Applications usually take between 6-8 weeks once submitted, however, due to the ongoing COVID-19 pandemic, GOV.UK currently states that “applications are taking longer than usual to process” and it is recommended to make online applications rather than paper applications, if possible.
What is estate administration?
Estate administration is the process of dealing with a person’s affairs after they have passed away. Unlike probate, estate administration is required after every death – whether or not there is a Will. Every estate make-up is unique, however, there are various stages of the estate administration process which are required in most cases. Due to this, it is impossible to tell how long the process will take without knowing more about the specific nature of the estate. The process can be complex, time-consuming and an added stress at an already difficult time for those coming to terms with the death of a loved one.
If the deceased passed away without a Will, then the estate is declared intestate, meaning the assets will be distributed in line with the rules of intestacy, rather than the family’s wishes. Intestacy is complicated as the Administrator(s) will need to construct a family tree to ensure all who are due to inherit receive their rightful share, otherwise, the Administrator(s) are personally liable for any wrongful distribution. Furthermore, intestate succession in Scotland is different to England and Wales, where Prior rights and Legal rights will also have to be taken into consideration to ensure correct distribution. These rights are designed to protect spouses/civil partners and children from being disinherited.
What are the steps involved in the estate administration process?
If you are named as an Executor in a Will, or act as the Administrator if there is no Will, you may need to think about the following steps:
- Gathering all the information
- Applying for the ‘Grant of Probate’
- Closing bank accounts and paying debts
- Ensuring the family tree information is correct
- Dealing with shares and investments
- Redirecting post
- Selling property and assets
- Dealing with Inheritance tax forms
- Completing Income Tax work
- Dealing with Capital Gains Tax
- Dealing with specialist legal work
- Contacting all people due to inherit
- Producing estate accounts
These are just some of the tasks that you may need to consider.
Some people decide to administer the estate by themselves, but this can take a significant amount of time and effort, especially if you have never gone through the process before. The Executor(s) or Administrator(s) are personally liable for any mistakes made during the process, such as completing tax returns and legal paperwork incorrectly. For these reasons, many people prefer to appoint an estate administration specialist, such as Kings Court Trust, to do the work on their behalf and take on the financial and legal responsibility.
To find out more about the stages of the estate administration process, download our ‘Understanding estate administration’ guide here.
What are the differences between probate and estate administration?
Probate provides the Executor(s) or Administrator(s) with the legal right to carry out the estate administration. Therefore, probate is just one part of the wider estate administration process that provides you with the authority to deal with property, money, and personal possessions. As mentioned previously, probate is not always required to deal with a loved one’s estate, however, estate administration is required after every death, no matter the size or complexity of the deceased’s estate.
Kings Court Trust is an award-winning estate administration provider who handles the complicated practicalities after death, so families can focus on life’s important moments. If you have any questions or issues with probate or estate administration, call our experienced Client Services Team at 0300 303 9000.