Guide to probate

Part 1

What is probate?

A grant of probate is the legal document that gives you permission to handle someone’s estate following their death. This might involve dealing with their property, debts, assets, and accounts. This article will help you work out whether you need probate and will explain how Kwil can make the process of applying for probate easier for you.

Part 2

When do I need to get a grant of probate?

It can be very confusing to know whether you need to get a grant of probate or not:

When you are likely to need probate:

• If the estate includes a number of solely-owned assets;
• If those assets exceed £15,000;
• If there is a house or flat (or other property) owned in the sole name of the person who has passed away that needs to be sold or transferred

When it is unlikely you will need to need probate:

• If all assets are jointly owned
• If the total value of the estate is under £15,000

Part 3

What does the probate process involve?

The administration involved with handling someone’s estate can take anywhere from between 3 months and a year, depending on how complex the estate is. Once you have obtained the grant of probate, there are quite a few tasks that may need to be completed:

• Clearing out any property and marketing it for sale
• Selling or transferring the property
• Closing bank accounts and collecting the balance in
• Selling any shares or investments
• Paying any outstanding debts of the estate (including utility bills)
• Paying the remainder of any inheritance tax due
• Distributing the estate in accordance with the wishes in the will or in accordance with the intestacy rules if there is no will
• Completing estate accounts that show what has been paid in and out during the estate administration.

Part 4

How do I acquire a grant of probate?

The first step to acquiring a grant of probate is to value the assets of the person who has passed away. This includes the following:

• Bank and building society accounts
• Savings accounts
• ISA’s
• Premium bonds
• Shares
• Investments
• House/flat valuations
• Pensions
• Life assurance

It is also important to value any liabilities of the estate. This includes the following:

• Mortgages
• Equity release/lifetime mortgages
• Credit /store cards
• Secured or unsecured loans
• Any other debts owed by the person who has died

It can sometimes be difficult in finding out where to find all this information, especially if you did not live with the person who has passed away, or you are not familiar with their financial arrangements. Many people will keep records of this sort of information in with their paperwork at home, maybe in a filing cabinet or a safe. The executor of the estate is entitled to look at all of this paperwork to assist them in compiling a list of assets and liabilities. If you are having difficulties in tracking all the necessary information down then our estate administration service may be of benefit to you.

Part 5

What information will I need before applying for probate?

Before you can apply for a grant of probate, there is plenty of information that you will need to gather about the estate in question. This is because the government needs to know the value of the estate before approving your application. If you fail to collect this information beforehand, it could slow down the process significantly. This article will help you understand exactly what information you need and how you can obtain it, and will detail any additional steps that you need to take before you can submit your application.

‘Tell Us Once’

The very first step before you start searching for documents and valuing your loved one’s estate is the register their death and notify multiple governmental organisations. You can report the death to all of these organisations in one go by using the Tell Us Once service on the government website, available to those living in England, Scotland, and Wales. Once you have registered the death, you need to use the Tell Us Once service within 28 days.

Locating the will and financial records

If you have been named as an executor in someone’s will, they should have told you where the document is being kept so that you can start the probate process quickly. If not, there are several ways that you can search for it.

First, you should check their property for a physical document. Many people keep their will alongside other important documents in a filing cabinet or a safe. If you find a copy of the will, check whether it was written with a solicitor or a bank and contact them to ensure that the copy you have is the original document. If it is not, you should ask them to send you the original will. If you cannot find a copy of the will but you know which organisation or individual it was written with, you should contact them and ask for its whereabouts. Failing this, you might be able to search the deceased’s wallet or emails to find out which bank they used.

If you are unable to find the will anywhere and you don’t know which organisation it was written with, you can check with the Principal Registry of the Family Division or with Certainty, which is the National Wills Register, who may have a record of the will.

If you cannot find a will after following these steps, it is possible that there is no will. In these circumstances an application for a grant of letters of administration will have to be made. The person who is the closest living relative of the person who has died is the one usually entitled to apply. Relatives who can apply are listed below in the following order:

• Spouse or civil partner of the person who has died
• Children (including adopted children but not step-children)
• Grandchildren
• Great-grandchildren
• Parents
• Siblings
• Half siblings
• Grandparents
• Uncles and aunts

Once you have found the will – or determined that there is no will – you should start gathering details about the value of the estate. You can look for financial records that specify how much debt and tax were owed before their death, the value of any gifts given by the deceased in the seven years before their death, the value of their shareholdings, investments, pensions, and bank accounts, as well as any life insurance policies that you might be able to claim on. The easiest way to do this is by contacting each relevant organisation. Usually, you will need to send them a death certificate to access the information that you need. After the organisations are aware of the death and have detailed the assets, they will freeze them until the grant of probate or grant of letters of administration has been approved.

Secure and value the property

If you are the executor of the will, it is your responsibility to keep the property secure and to protect any personal possessions. As soon as you possibly can, you should contact the house insurance provider to notify them of the death, and to ensure that the insurance is adequate. Following this, you should visit the property and make sure that it is completely secure against break-ins. In addition to securing the house, you can gather any valuables that are included in the will for safekeeping until probate has been granted.

When you are happy that the property is secure and insured, you should then get the property valued. Searching Zoopla for similar sized houses in the same road/area as the property will help you estimate how much it should be worth. It is important to get an accurate valuation and if you are in any doubt you should hire a RICS qualified surveyor or an estate agent to value the property. If you submit an inaccurate valuation then HMRC may well refer their district valuer and this will take up time and cause delay.

Part 6

What are probate forms?

Once you have collated all the necessary information you can then apply for the grant of probate. This will involve paying any inheritance tax that is due on the estate and completing the relevant HMRC probate application form. This will likely be either be an IHT205 or an IHT400. These forms need to be accompanied by a separate application form to the probate courts along with the court fee. The court fee is £215 for personal applications and £155 if the application is made by a solicitor on your behalf.

Many people find completing these forms quite difficult and they can be confusing. To find out how Kwil can assist you then please call our team on 0800 061 4934.

Part 7

Who can apply for probate?

If there is a will

If there is a will then it is likely that there is someone appointed to act as the executor of the estate. This can be one person or more than one person. The executors are the people who are entitled to make the application for the grant of probate and administer the estate.

In some cases, the named executor will be unable to carry out their duties. This might be because the executor has died or lacks the mental capacity to handle the estate due to illnesses such as dementia. Another possibility is that the executor is alive and well but does not want to apply for probate. In these cases, the court will name an administrator. Usually, this is the beneficiary who stands to inherit the most of what was left in the will.

What if there is no will?

It is estimated that over half the people living in the UK do not have a valid will. In the circumstances where there is no will then it may be necessary to apply for what is known as a grant of letters of administration. This is similar to a grant of probate and will give the administrators the same powers to deal with the estate. There is an order of priority that lists who can apply to administer the estate of someone who has died without a will:

• Husband, wife or civil partner (including if you are separated but not if you are divorced)
• Children (included adopted children but no step-children)
• Grandchildren
• Great-grandchildren
• Parents
• Siblings
• Half-siblings

Part 8

How long does completing the probate application take?

You will need to gather a lot of information about your loved one’s estate before you can send your probate application off. If the estate is small and straightforward there will be less information to gather and you might be able to submit your application within a few weeks. On the other hand, probate applications for larger, more complex estates with multiple bank accounts, savings accounts, pension funds, taxes and debts could take up to two months. Before you apply for probate, there are several things that you should do to speed up the process:

• Use the government’s ‘Tell Us Once’ service – available in England, Scotland, and Wales – to notify them of your loved one’s death. This is linked directly to the Department of Work and Pensions and they will contact you directly about any outstanding payments due to or from the estate in respect of state pension, attendance allowance, disability allowance or any other benefits that the person who died was entitled to.
• Locate the original will – if there is one – and keep it safe as you will need it to apply for probate.
• Determine whether the person who has died included an inventory of their assets and funds in their will. If they did not, you should start looking through their paperwork and compiling a list of all the assets they owned.
• If there is no will, you should look for any birth, death, marriage, or divorce certificates that can prove that you are the person who should be applying for a grant of letters of administration (the grant you apply for when someone dies without a will – similar to a grant of probate).
• Get in touch with relevant financial institutions as soon as possible to let them know of the circumstances and ask them to value and freeze any accounts.
• Have any property valued, preferably with a RICS qualified surveyor or estate agent.
• Hire a professional service such as Kwil, which will help you prepare your application. Probate applications involve a lot of confusing language and forms, which can be confusing and worrisome for those concerned about making mistakes that might delay the application.

This process should take the same amount of time whether there is a will or not, as the information that you are gathering is the same in either case.

Part 9

How long does probate take in the UK?

The amount of time it takes to apply for probate and deal with an estate can vary depending on how complex it is. The entire process can take anywhere from three months to a year from start to finish, and probate for more complex estates could take even longer than this. This article will help you estimate how much time probate should take for you and why.

How long does it take to get probate after applying?

After submitting your application, you will likely be waiting for three to six weeks for it to be approved, at which point you will receive a physical copy of your grant of probate in the post. This amount of time depends on the size and complexity of the estate, but it can also take longer if there is a backlog of applications or if there are any hold-ups with your application. Therefore, it is important for you to gather as much information about the estate as you can before submitting your application.

Currently, there is a backlog of probate applications due to the coronavirus pandemic, which is causing a delay. This means that it might take two to three months for your application to be approved.

Part 10

What are the responsibilities of the executor or administrator?

Being appointed or named as the executor or administrator of an estate can be a daunting prospect. There are certain obligations that come with acting as an executor and you need to make sure that you administer the estate correctly as you are answerable to the beneficiaries of the estate. The following tasks are just some of what you should expect

• Registering the death and organising a funeral
• Advising family and friends as well as contacting any beneficiaries named in the will
• Compiling a list of assets and liabilities of the estate
• Paying any inheritance tax due on the estate and applying for a grant of probate (or letters of administration if there is no will)
• Closing bank/building society accounts and collecting money in
• Selling or transferring any shares or investments
• Selling or transferring any property
• Paying any outstanding debts owed by the person who died, or balance of inheritance tax
• Distributing the estate in accordance with the will (or in accordance with the intestacy rules if there is no will)
• Drawing up estate accounts which document how much has been paid in and out during the course of the administration.

Part 11

How long does it take to deal with an estate?

Dealing with your loved one’s estate is the lengthiest part of the probate process. It takes most people three to six months to complete. Below is a list of some of the duties you will have after probate has been approved.

• Selling any property or transferring ownership to the beneficiaries
• Accessing pension funds
• Submitting an inheritance tax return
• Paying any outstanding debts
• Closing any bank accounts and collecting the funds together
• Paying any due taxes
• Claiming on life insurance policies
• Distributing assets and funds to the beneficiaries of the will

Many people choose to hire a professional to help with handling the estate. This won’t always make the process quicker, but it will ensure that no mistakes are made, and it is useful for those who don’t have a lot of free time to complete these tasks.

Part 12

When do banks and building societies require probate?

Every bank and building society have their own rules and limits on how much money they will release without a grant of probate. This can be from anywhere between £5000 and £50,000. Many banks will release up to around £15,000 just upon sight of the death certificate, and occasionally will want sight of the will as well. Some banks will ask for a “form of indemnity” to be signed to release amounts of between £15,000 and £50,000. For the most part, anything over £50,000 will require a grant of probate before the institution will release the money. We have listed below the limits of the main banks and building societies:

• 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 - £15,000
• Nationwide
  • Under £5,000 - no Grant of Probate is required
  • £5,000 - £30,000 - a certified copy of the Grant of Probate is required, or alternatively the 'close account' form will need to be witnessed by a Solicitor
  • Over £30,000 - the original Grant of Probate is required
• Natwest - £25,000
• NS&I (National Savings / Premium Bonds) - £5,000 to £15,000 depending on the Will and the number of Executorsv
• Post Office - £10,000
• Royal Bank of Scotland - £25,000
• Sainsbury's Bank - £20,000
• Santander - £50,000
• Skipton Building Society £15,000
• Tesco Bank - £25,000
• Woolwich - £15,000
• Yorkshire Building Society - £30,000

Part 13

How long does it take to receive my inheritance?

If there are multiple beneficiaries, all assets and funds will need to be gathered into one place before they can be distributed. This process can take up to six months to complete but is relatively straightforward for the administrator to accomplish. If you are the main beneficiary of the estate, and you are acting as administrator or executor, then this process could take a far shorter amount of time.

Part 14

Do I need probate to sell shareholdings?

Share registration services are managed by Registrars (like Equiniti and Computershare) and these are the companies that will deal with the sale or transfer of the shares owned by the person who has died.

Some registrars will allow shares to be sold or transferred using what is known as their “Small Estates Service” if the person who died held shares but, aside from that, there is no other reason to get probate. The Small Estates Service can be used when the value of the holding(s) in each company was less than £20,000 at the date of death and where no inheritance tax is payable on the estate.

If using the Small Estates Service is not applicable then the majority of registrars will require a grant of probate before the shares can be sold or transferred.

Part 15

Do I need probate to sell or transfer a Property?

If the person who died owned a property with another person as ‘joint tenants’ then a grant of probate will not usually be required. The Land Registry will require sight of the death certificate and then update the register accordingly.

If the person who died either owned a property (such as a house or a flat) in their sole name or as tenants-in-common with another joint owner then probate will be required before the property can be sold or transferred.

Inheritance tax overview

Part 16

What is inheritance tax?

Inheritance tax is paid on the estate of someone who has passed away if the value of their estate exceeds the threshold of £325,000. The standard inheritance tax rate is 40% and it is charged on the part of the estate that is above the threshold.

When must inheritance tax be paid?

Inheritance tax must usually be paid within 6 months of death. If the tax has not been paid by this point then HMRC will start charging interest as well as a late payment penalty so it is very important to get this dealt with as soon as possible to avoid any fines.

Do I need to pay inheritance tax on a property?

Any inheritance tax that is attributable to a property can be paid in yearly instalments over 10 years, provided that the property is not sold. This can be useful if there are not enough funds in the estate to cover the full amount of inheritance tax due, but there will be a 3% interest rate charged by HMRC.

Spousal exemption:

Any part of the estate that is left to a spouse or civil partner will not be liable for inheritance tax. There is no limit on the value.

Charitable exemption:

Any part of the estate that is left to charity will not be liable for inheritance tax. What’s more – if 10% of the overall estate has been left to charity then this reduces the inheritance tax on the entire estate to 36% rather than 40%.

Business Property Relief:

Business property relief reduces the amount of inheritance tax that must be paid if the deceased owned a business, or part of a business. It is available at either 50% or 100%.

You can get 100% Business Relief on:

• a business or interest in a business
• shares in an unlisted company

You can get 50% Business Relief on:

• shares controlling more than 50% of the voting rights in a listed company
• land, buildings or machinery owned by the deceased and used in a business they were a partner in or controlled
• land, buildings or machinery used in the business and held in a trust that it has the right to benefit from

You can only get relief if the deceased owned the business or asset for at least 2 years before they died.

Residence Nil Rate Band:

As well as the threshold of £325,000 There is also a separate allowance known as the “Residence Nil Rate Band Allowance” which sits alongside the Nil Rate Band Allowance and can be used if the person who died owned a property that is being left to a direct descendant (e.g a child or a grandchild). This allowance is currently £175,000.

When put together, it means that there is a potential combined allowance of £500,000 that can be used before any inheritance tax is due. This is obviously dependant on individual circumstances.

Part 17

How can Kwil help?

Acquiring a grant of probate can be a complex process and solicitors are often expensive. At Kwil, we can help you acquire your grant of probate for just £595 for simple estates or £999 for more complex estates (not including the probate registry fees of £215 and sealed copies of the grant of probate for £1.50 each). An estate is considered simple when the total estate is valued at less than £650,000, all assets are located within the UK, and gifts given by the deceased in the seven years before their death do not exceed £150,000. A complex estate is one where the total value of assets is over £650,000, overseas assets exist valued at more than £100,000, and gifts of more than £150,000 were made by the deceased in the seven years before their death.

Once your grant of probate has been acquired, we will send it to you so that you can complete any admin such as closing accounts and selling property. However, if you are concerned that you will not have time to deal with your loved one’s estate or that you might get something wrong, you can pay an additional fee and Kwil will handle this admin for you so that you can rest assured that everything will be handled by experts.