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When is probate required? An overview of UK financial institution thresholds

Posted by Kings Court Trust | 21-Feb-2022 16:49:10

Probate, also known as Grant of Probate, may be needed when someone passes away. Obtaining probate provides the Executor(s) or Administrator(s) with the authority to act on behalf of the estate and proceed with the estate administration process.

To better understand probate and estate administration, the following key terms are worth noting:

  • Executor(s) – acts in estates where a Will was left
  • Administrator(s) – appointed to handle an intestate estate (when there is no Will)
  • Personal Representative – the umbrella term for Executors and Administrators
  • Letters of Administration – acquired instead of a Grant of Probate in an intestacy case
  • Confirmation – the equivalent of a Grant of Probate in Scotland
  • Grant of Representation – the umbrella term for Grant of Probate and Letters of Administration

Although probate is not needed for all estates, estate administration must always be carried out. To read about the difference between probate and estate administration, click here.

When is probate required?

When assets are held solely and the balance exceeds their probate threshold, financial institutions may need to see a Grant in order to release funds. This threshold varies as it is set by the individual institution rather than by the Government. Therefore, it may be a timely task to contact each institution where the deceased held assets to understand their requirements.

When is probate not required?

Generally, probate isn’t required if the estate is valued at less than £5,000, as most financial institutions will release funds lower than this.

Also, if assets were held jointly, probate is often not required as these assets automatically pass to the surviving spouse or civil partner. However, some jointly held assets, such as property, may need a Grant if specific arrangements have been made during lifetime. For example, if the property is owned by tenants in common rather than joint tenancy.

Is probate required if there is a Will?

Probate may still be required if there is a Will. If there are solely owned assets and the value of one or more asset(s) exceeds the relevant financial institution’s threshold, probate is most likely required, whether the person passed away with a Will or intestate. If the individual has passed away without a Will, the Administrator will need to apply for Letters of Administration rather than a Grant of Probate, but the thresholds and requirements remain the same.

Current probate thresholds for UK financial institutions

Financial institutions, such as banks or building societies, may decide whether probate is required on a case-by-case basis, or they might have a set threshold. Probate thresholds vary greatly from institution to institution, typically ranging between £5,000 and £50,000. As these thresholds are subject to change by the individual institution, it is recommended that you check with the relevant institution when required.

 

Financial institution

Threshold

Aviva

£50,000

AXA

£10,000

Bank of Ireland

£10,000

Bank of Scotland

£25,000

Barclays

£50,000

Birmingham Midshires

£25,000

Britannia

£30,000

Cheltenham & Gloucester

£25,000

Co-op Bank

£30,000

First Direct

£20,000

Halifax

£50,000

HSBC

Decided on a case-by-case basis

Lloyds TSB

£50,000

M&S Money

Decided on a case-by-case basis

Nationwide

£50,000

Natwest

£25,000

NS&I

£5,000

Post Office

£30,000

Royal Bank of Scotland

£25,000

Sainsbury’s Bank

£20,000

Santander

£50,000

Skipton Building Society

£30,000

Tesco Bank

£50,000

TSB

£25,000

Virgin Money

£35,000

Woolwich

£15,000

Yorkshire Building Society

£30,000

 

These probate thresholds are subject to change by the institutions they refer to; they are accurate to the best of our knowledge as of February 2022. If you are administering an estate, please confirm whether you need a Grant of Probate with each institution directly.

The probate process

The probate application process involves completing a PA1P (if there is a Will) or a PA1A (if there is no Will). Deaths dated on or after 1 January 2022 that meet the excepted estate criteria do not require an Inheritance Tax (IHT) form. If the estate does not meet the criteria, an IHT form will also be required. Click here to learn more about IHT reporting for excepted estates.

All these details, plus the death certificate, must then be sent to the Probate Registry. Probate can be applied for online if you have the original Will and death certificate, but documents will still need to be sent by post after submission.

How long does it take to get a Grant of Probate?

Generally, it takes 6-8 weeks after applying to receive the Grant of Probate. However, due to COVID-19, there are currently significant delays to the probate application process; the Probate Registry continues to encourage people to utilise their online application service to try and reduce these delays. Click here to read our blog on these delays and how to reduce the risk of a stopped Grant application.

How much does a Grant of Probate cost?

There is a set government fee for obtaining probate in England and Wales which has recently been raised to £273 for estates over £5,000. For estates that are £5,000 or less, there is no fee to pay. Learn more about probate fees here.

What happens after probate is granted?

Once the Executor or Administrator has the Grant of Probate, they have the legal and financial responsibility to administer the estate. In summary, this includes dealing with all of the deceased’s assets, property, debts, tax work, and distributing inheritance to the beneficiaries as named in the Will (or under the rules of intestacy if there is no Will).

The Personal Representative does not need to apply for probate or administer the estate themselves if they don’t want to; they can instruct a professional to carry out the process on their behalf. Here at Kings Court Trust, we offer four specialist estate solutions, from Grant only to full estate administration. We can take care of the complex paperwork and stressful tasks associated with a bereavement to alleviate some of the burden when a loved one dies. The benefits of instructing us to obtain the Grant of Probate or administer an estate include:

  • Free, impartial advice and a no-obligation fixed fee quotation for our services
  • A price match guarantee on our full estate administration solution
  • A dedicated point of contact throughout the Grant of Probate application and/or estate administration process
  • We can take on the full legal and financial responsibility when administering the full estate

Click here for more on the benefits of instructing Kings Court Trust.

Click here to download our free 'We take care of estate administration' guide.

 

If you have any questions about applying for probate or the estate administration process, get free guidance and advice from our Client Services Team by calling 0300 303 9000 or filling in the form below.

 

 

Topics: Grant of Probate, Probate, Probate Fees, Probate Thresholds, Financial Institutions