Understanding Probate: A Beginner’s Guide

In this Blog Bits series we take a look at probate, and dealing with a deceased estate, with this handy understanding probate beginner’s guide. It does sound like a heavy read, but is equally important, so if you need to know what to expect then this article will be ideal for you.

Have you been appointed as an Executor on someone’s will? If so, here is an easy probate checklist at a glance to help you get started. When a will is written, normally either immediate relatives or a close friend are appointed as executors in the event of the death of a named person. Being appointed as the executor (or one of them) in a person’s will may seem daunting, but if you are not dealing with a complicated estate, you may be able to save money by settling the will’s requested wishes yourself.

Simple probate checklist overview

Handling probate as an executor will involve several tasks and undertaking the administration of the estate (where assets are collated and then distributed to the beneficiaries). Whether you consider DIY probate or use a probate solicitor will depend on whether you feel confident in taking on responsibility for sorting out the will. If you held a Lasting Power of Attorney for the person while they were alive, please note that it ends automatically when they die and gives you no authority over their estate. Only the executors named in the will (or the administrators, if there is no will) can deal with the estate, although attorneys are often named as executors too.

Top tips: It is wise to keep a clear record of all activities, for example, expenditure together with dates of any related transactions. Purchase a sturdy folder and dedicated reporter’s notebook to keep all records.

Checklist at a quick glance:

1. Register the death – you will need the relevant documents of the departed, find your local office
2. Find out if there is a will – this will inform you of the deceased’s requests for their estate, for example, funeral plans and executors. If the deceased did not make a will, please refer to number 3 – on the checklist for moving forward.
3. Apply for a ‘grant of probate’ and sort inheritance tax – sort out any inheritance tax forms with HMRC, then apply to HMCTS for probate online (or by post if you can’t apply online).
4. Inform all relevant organisations and close accounts – you will need to advise all necessary companies and institutions related to the deceased of their death.
5. Pay off any debts – only the deceased estate is liable for any outstanding money owed to creditors. Money owed in joint names will be the spouse/sole survivor’s responsibility to pay.
6. Check if there is any life insurance – investigate to see if there are any valid life policies or any payment protection insurance plans to hand.
7. Value the whole of the estate – once all of the debts and taxes are paid, you will need to calculate the total value of the remaining estate.
8. Share the remaining estate – whatever net worth is left over is distributed to the named beneficiaries.
9. Balance the books – make sure all of the numbers balance out on the expenditure account and then keep all of the documents safely afterwards. There is no single fixed period, but claims against an estate and HMRC tax enquiries can be made years later, so ask a solicitor how long to keep them.

Top tip: any expenses you incur (retain all receipts) will get refunded by the estate, provided it is directly associated with administering the estate.

Checklist for moving forward:

Collect the death certificate from the doctor dealing with the death. Register the death using the necessary identity paperwork.

1. The death should be officially registered within five days at the local office. Secondly, make sure any of the deceased owner’s property is fully insured and totally secure against burglars or potential vandalism.
2. Find out if there is a will and where it is located. When you have found it, check to see who has been named as executor before beginning the probate process. In most cases all executors will be fully aware that they have been previously been appointed. In some cases where someone does not feel capable of doing this they can appoint a solicitor to act on their behalf or decline the role by signing a ‘Renunciation.’
3. If the departed person did not make a will, they are said to have died ‘intestate’. When this happens the personal representatives will need to apply for what is known as ‘Letters of Administration.’ This is a slightly different process with ‘administrators’ being appointed instead of ‘executors’. If the deceased person did make a will the named executors will be able to apply for a ‘Grant of Probate.’
4. Organise the funeral and arrange the wake at a venue, maybe previously nominated by the deceased. Funerals are generally held soon after someone dies, even before you have been able to apply for a ‘grant of probate.’ In some instances, the deceased’s legal representative will release funeral expenses before you obtain the grant. And some funeral directors will understandably wait for payment until probate has been granted. Otherwise someone may have to pay for the funeral up front and then recover the money from the estate later. You should also check the will for any requests on how the deceased wished their funeral to be conducted. It maybe cremation or burial.
5. Announce the death (for example in a local paper or even on any social media platforms) so that any acquaintances that may not have been aware of the death and wish to attend the funeral to pay their last respects can do so.

6. Obtain a ‘Grant of probate.’ This will enable you to obtain permission to execute the will as per the deceased’s requests. To action this you will need to have already registered the death and assessed the size of the estate. Once you have determined the size of the estate and decided whether or not inheritance tax will be due, you can then complete a probate application form and HMRC inheritance tax forms.

Remember to check that you have accurately processed the deceased estate, including all of their investments and savings. Ensure each bank have supplied details of all accounts, including ISA’s and shares? Close any accounts including credit cards, unless one account is used to pay for the post death activities. Did the departed have any life insurance policies or are there any ‘Trusts’ involved? ‘Trusts’ would impact on death duty tax due, as to how much is owed to IHT. Are there any other assets, such as bricks & mortar that you need to get valued by an estate agent? Overseas investment property/holiday home would require a local solicitor and a notary in that country. Usually a second separate will is made for foreign properties, as in Spain for example, and death tax on property sold could be due in that country.

Probate applicants apply online, or by post using form PA1P (if there is a will) or PA1A (if there is no will), then you will likely need to use a separate form depending on whether or not inheritance tax is due. This is the IHT400 tax return form for estates that are liable for inheritance tax.

7. When you apply, you sign a ‘statement of truth’ confirming that all of the information you have provided is true. You no longer need to attend an interview or swear an oath in front of a solicitor or notary.
8. Pay any inheritance tax due. Provided that everything is in order and that HMRC accepts your valuation (supported by a possible estate agent market appraisal), any IHT due on the estate must now be paid. This is a necessity of getting the grant of probate. If there are sufficient funds in any of the departed bank accounts to cover the amount due, you should be able to make a direct payment to HMRC. Most banks allow this to be done on receipt of an IHT 423 form. Where the estate assets are tied up in shares or property, HMRC will accept the owed IHT in stage payments and only requires 10% of the total due in advance. Check if there is enough in the estate main account to pay for the IHT due. Pay off any associated debts, and note that money owed in joint names will be the sole survivor’s responsibility to settle.
9. The next stages of administering the estate involve gathering in all the identified assets, and distributing them as indicated in the will. Once probate has been granted, most institutions will release money without delay. Any funds received from another account should be paid into the late person’s main account, so there is a paper trail at all times. Alternatively, you may have to set up an executor’s or trustee account if there is no account to hand.

Top tip: to speed up the process, when you apply for Grant of Probate it is worthwhile paying for extra certified copies (and copies of the death certificate), as there will be more than one official institute requiring verification.

10. Once you are in receipt of the grant of probate, you should also consider advertising for any unknown creditors to step forward. If you don’t do this you could be held personally liable for any unknown/unidentified outstanding debts –not a good outcome! Place a notice in the local free paper or most common is in the national ‘Gazette’ (the official public record for notices publication). You can often create a PO box, so your personal home address is not made public.
11. Once you have received all of the funds due, for example the sale of the house, you can make appropriate payments to each of the beneficiaries and any creditors. When distributing assets, remember to verify each recipient; are they entitled to any money at all?
12. The last job is to prepare a set of final accounts. These estate death accounts should include all money received and all monies paid out, you need to keep these with supporting paperwork. You should keep the main records of how these valuations were worked out relating to the estate. HMRC can ask to see records up to 20 years after Inheritance Tax (IHT) is paid.

And finally, you are almost there

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