The meaning of probate and a grant of probate
What does probate mean?
The literal definition of probate is “the legal proving of the Will”. However, this probate definition doesn’t really give a clear understanding of the meaning of probate in all its uses.
In practice, the term “probate” can have multiple meanings. It can be used to refer to the process of “proving the Will” which involves obtaining legal proof in the form of a document issued by the court known as a grant of representation. Alternatively, it can be used to refer to the grants of representation themselves which will be either a grant of probate or letter of administration.
In order to properly define probate it will be necessary to understand:
- What are the different types of grants of probate?
- What is probate used for?
- Why is probate necessary?
- What does probate involve?
What is a grant of representation?
A grant of representation is an official document issued by a court that confirms a persons legal right to handle a deceased persons estate and assets. A grant of representation will show details of the person who has died including their name, address and date of death. As well as the total value of their estate and the names and addresses of the personal representatives (executors or administrators). Finally, it will have a stamp in the lower right-hand corner.
A Grant of probate and letters of administration are both forms of grants of representation. The type of grant you will need is dependent on whether or not the deceased left a Valid Last Will and testament.
What is a grant of probate?
A Grant of probate is a type of grant of representation. A grant of probate means that the deceased left a valid Will. The probate of a Will acts as confirmation that the Will is a valid legal document and the executor named in the Will is legally recognised as the person with the right to administer the estate.
What are letters of administration?
Letters of administration are also a type of grant of representation and have the same purpose as a Grant of Probate. However, Letters of administration mean that the deceased left no valid Will and therefore has not chosen an executor to handle their financial affairs. In this circumstance, the Rules of Intestacy dictate the next of kin has a right to act as an administrator and the letters of administration confirm which next of kin is acting.
What is probate for?
The probate process is for the purpose of establishing the correct person to administer the estate and obtaining a grant of probate or letters of Administration. These documents are used to prove to financial institutions and when necessary, the Land Registry, that the executor and/or next of kin has the power to deal with the administration of the deceased’s estate. These documents are required in order to access or handle the deceased’s assets that are held or protected by an institution.
When an institution is holding significant assets in a deceased’s sole name they will request proof that the person attempting to collect them has the legal authority to do so. A grant of probate is provided to the institution as physical proof of that persons authority.
Why is probate necessary?
When administering an estate the executor or administrator is responsible for collecting all of the estate’s assets, handling any liabilities against them and distributing them to the beneficiaries. Without a grant of representation, an executor or administrator may be denied access to significant assets and therefore cannot collect them or handle any liabilities associated with them or the estate. In this circumstance, an executor/administrator must go through the probate process and obtain a grant before they can collect assets and complete the administration.
Probate is necessary for the protection of a deceased persons assets. Significant assets such as property or large amounts of cash in banks will require probate in order to be released. The requirement for a grant to access or collect assets helps to prevent someone, who has no right, from mishandling them. The probate law process makes it difficult for a non-entitled person to obtain legal authority. Therefore the more significant the assets the more likely it is someone attempting to access them will be asked for proof of their authority in the form of a grant of representation.
It is often mistakenly assumed that probate is not required when there is a Will because the Will acts as the physical proof of the executors right to administer. This is not the case, probate is routinely required where there is a Will because the purpose of the probate process is to prove the Will. However, having a Will can reduce the necessity for a grant of probate. Some institutions may accept a Will as enough to release assets if their value is under a set amount. Every institution will set their own threshold for the value they are willing to release with just a Will and no grant. These thresholds are often set between £5,000 and £50,000.
It is true that Intestate estates (estate where the deceased left no valid Will) are more likely to require probate than estates where there is a valid Will. This is because institutions are more careful about who they are dealing with when there is no Will to tell them. Often institutions will reduce the threshold of how much they are willing to release without seeing letters of administration. This threshold is often set at a maximum of £5000, anything over that value will require letters of administration. When there is no Will there can be multiple people with a right to administer, an institution will want to see probate so they know which next of kin they should be dealing with.
What does probate involve?
Probate is commonly used to refer to the entire process of administering the deceased’s estate. However, probate is actually just one part of the estate administration process. The administration of an estate is necessary regardless of the requirement for a grant of representation. Estate administration includes identifying and collecting in all assets, selling/transferring property, paying all creditors and taxes and then distributing the estate to the beneficiaries in accordance with the Will or the Laws of Intestacy.
The section of estate administration that is “probate”, involves applying for a grant of probate or letters of administration. Applying for a grant of probate involves providing an account of the estate’s assets to the Revenue and submitting an application to the probate registry. This application is made using a selection of forms, including a PA1A or PA1P form which is the probate application and a corresponding IHT 205 or IHT400 which are for inheritance tax purposes. Depending on the estate there may be supplementary forms that are required.
Once the applicant has completed all of the relevant forms they must submit them to a probate registry along with a payment for the probate fee and either the Will or evidence that the applicant is next of kin. The IHT documents will be reviewed by HMRC to ensure there is either no inheritance tax to pay or that the correct amount of tax has been calculated. The Revenue must be satisfied that either no inheritance tax is due, that all tax due has been paid or that provision for the payment of tax has been made with them. Only then will they give permission for the executor to apply to the probate court for the grant. The court then examines all the documentation and verifies that the Will is a bona fide legal document (if there is a will). Once all is in order the executor is sent to swear an oath to confirm all is correct. The grant of probate is then issued as physical proof of the executor’s or administrator’s legal authority to deal with the finances of the estate.
Who can apply for probate?
An executor named in the Will can apply for probate. An executor can be anyone that the deceased has chosen, for example, a family member, friend or solicitor. When there is no Will the Rules of Intestacy dictate which next of kin can apply for probate. Applying for probate makes that next of kin the administrator of the estate.
If an executor or administrator does not wish to take on the responsibility of the estate administration they can appoint someone else to apply for probate for them, for example, a solicitor. Alternatively, if they wish to have no involvement whatsoever an executor can renounce their right to apply. Leaving the authority to administer the estate and make the application to the remaining executors or, if there are no other executors, to the next of kin.