If you have recently lost a loved one and you know that you are responsible for administering their estate, but you are still grieving, you might be wondering how soon after the death you need to begin the complicated probate process.
Technically, there is no deadline for starting estate administration. However, there is a deadline for submitting the Inheritance Tax forms and paying Inheritance Tax if it is due. This must be done by the executor of the Will and is usually done alongside the application for a grant of probate.
Moreover, there are some general guidelines for how long after the date of death the beneficiaries should receive their inheritance. If these guidelines are missed, the process could become a lot more complicated and difficult for you, so we would recommend getting started as soon as you feel able to.
Before you can apply for probate, you need to calculate the value of all assets and liabilities contained within the estate to determine its net value. Assets include things like property, valuables, life insurance, pension funds, and bank accounts, while liabilities might include outstanding debts, utility bills, and taxes.
When you have this value, you can determine whether Inheritance Tax is payable on the estate and how much is owed. For 2020/21, the Inheritance Tax threshold is £325,000, which means that an estate worth over £325,000 is liable to an Inheritance Tax rate of 40%.
The executor or administrator is responsible for paying the Inheritance Tax on the estate using funds from the estate, or funds earned from the sale of assets within the estate such as property.
The deadline for paying Inheritance Tax is six months after the date of death. Within six months, you should have submitted the relevant Inheritance Tax forms and paid the Inheritance Tax itself. If you leave it any longer than this, HM Revenue & Customs (HMRC) will charge you interest and late payment penalties up to £3000.
While it is not always possible to complete estate administration within a specified timeframe due to several potential hold-ups, generally it is expected that executors will complete the process within a year. This is known as “The Executor’s Year”.
If there are monetary gifts in the Will due to be inherited by specific beneficiaries, they should be distributed within one year. If you fail to do this, the beneficiaries are entitled to claim interest on their inheritance which can make your job even more complicated.
Moreover, the executor has a duty to act in the best interests of the beneficiaries. If the beneficiaries feel that the executor is deliberately putting the job off and making them wait an unreasonably long time, they may be entitled to challenge the executor in Court. This can be extremely stressful and should be avoided at all costs.
Most estates take months to administer, so getting a head start on the probate process can save you a significant amount of hassle down the line.
At Kwil, we understand how complex and time-consuming the process of applying for probate and dealing with someone’s estate can be, especially when you are mourning the death of a loved one.
Kwil can help you acquire a grant of probate for just £595 or £999 depending on the size of your loved one’s estate. This can help to get you started with the process if you would rather deal with the bulk of it yourself.
If you need help with the entire probate process, we also offer a full estate administration service, whereby we will handle both the probate application and the entire estate administration for you. The cost will depend on the size and complexity of the estate but will always be charged based on a fixed fee so that there are no unexpected costs when you come to pay.