What does probate involve?

Probate involves getting legal permission for the executor to deal with the deceased’s finances; their estate.

One of the executor’s most important duties is to administer the deceased’s financial affairs and if required, obtain probate in order to do this. Probate involves establishing exactly what assets were owned by the deceased, obtaining the value of these assets in order to establish the value for the entire estate.. The executor is also responsible for gathering together all the assets owned by the deceased including money, assets and possessions, settling any taxes, debts or liabilities and distributing the estate to the beneficiaries in accordance with the Will.

If someone dies without a Will a different set of rules apply. These are known as the Laws of Intestacy. Broadly the process to be followed is similar but instead of the executor it is the next of kin who takes charge of matters.  

It is important for the executor to establish as quickly as possible if probate is required. This has little to do with the Will or the value of the estate but what is in the sole name of the deceased.

Where there is a property or share of a property in their sole name probate will always be required. It is the Land Registry who will require this before the property can be sold or put into the names of the beneficiaries i.e. any change of ownership can be registered. Where there is a large amount of money again in the deceased’s sole name probate may also be required. Banks and other financial institutions set their own limits and investments above these limits will require probate. The limits vary and the best advice is to check with each individual organisation what their threshold is to ascertain if they need probate.

Probate involves establishing what is the deceased’s estate and if there are any creditors. In order to do this, it will be necessary to contact all organisations that had a financial relationship with the deceased. Most government departments can be notified with a single call or on line application service to the ‘Tell Us Once’ service. This will help avoid over payments of pensions and benefits and initiate correspondence from them.  Similarly, the ‘Death Notification Service’ can be used to inform financial institutions – banks, building societies etc. This should stop direct debits and other payments being taken unnecessarily from the deceased’s account. Institutions have bereavement departments that will then contact the executor and provide what is needed.

Probate involves giving a return to the Revenue and an application to the Probate court.

Essentially, the Revenue requires a snapshot taken on the day of passing of what the deceased’s estate comprises and its valued.  The Revenue is curious to know whether there is any inheritance tax due. Two sets of Inheritance Tax Forms are used to provide this information, either the IHT 205 or the IHT 400. The executor is not only responsible for completing them but submitting the IHT forms to HMRC. If there is no tax to pay the executor will be able to complete application to the court immediately. If inheritance tax is due, then it will be necessary to pay what is owed in full or arrange to pay by instalments before applying to the Court using a PA1 form.

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