Following the death of a loved one, you may find yourself responsible for administering their estate and sorting out their assets. Probate refers to the legal process through which an executor can acquire legal authority to sell and distribute assets from someone’s estate in accordance with their Will.
Probate is only required after around 50% of all deaths in the UK. The most common reason why probate would not be required is because the estate is small enough that it is not necessary. This article will explain what constitutes a small estate and why probate is not required for its administration.
Generally, a small estate is one that contains no property and only a small amount of money. Property is usually the most valuable asset in an estate, so not owning property significantly reduces the size of the estate.
Money contained within the estate is usually found in bank accounts, savings accounts, pension funds and life insurance policies. After your loved one dies, you should calculate the total value of the estate. Usually, if this number is under £10,000, probate will not be required.
When an estate contains little money, the financial organisations that hold this money will not need to see as much documentation before they release it to the deceased’s beneficiaries. Different banks have different limits on how much money they can release without requiring a grant of probate, and this can range from £5,000 to £50,000, so it is worth contacting your loved one’s bank to determine whether you will need a grant of probate to access their funds.
Money aside, a grant of probate is only required when there is property to be sold or transferred. If the deceased owned no property, no probate is required. If the deceased owned property as joint tenants with someone else, the property passes automatically to the surviving owner in line with the Right of Survivorship. Again, probate is not required in the scenario.
Conversely, if your loved one owned bank accounts valued above the bank’s probate limit or they owned property in their sole name, probate will be required to administer their assets. Additionally, if the deceased owned property as tenants in common where each tenant owned a discernable share, their share will need to be transferred to a beneficiary as part of the probate process.