When most people are asked if they know what probate is – the normal response is a shrug of the shoulders or the thinking that it is only something that needs to be done if you die without a Will.
Unless you have first-hand knowledge/experience or you work in the industry, very few people will deal with probate in their lifetime. Saying that – Probate is just one of many areas within law that can be completed by anyone without the need of a solicitor or legal specialist, like writing your own Will or setting up your own powers of attorney. However, a lack of knowledge or advice when preparing legal documents or applying for probate can and does result in families spending or loosing thousands of pounds to correct what should have been done in the first place.
It was Donald Rumsfeld who stated: “There are things we don’t know… that we don’t know”, this couldn’t be truer when dealing with legal procedures like Probate.
What is a grant of probate?
A grant of probate is a legal document that is normally needed for executors to access bank accounts, sell assets and settle debts after someone has died.
This document is only called a grant of probate if the person left a will. If they did not leave a will, a grant of letters of administration is used instead. Both documents work in much the same way, giving a named person legal authority to deal with the estate of the person who died. The idea of this legal procedure is to make sure that before anyone receives any monies, that all debts are paid off, all taxes are paid, the Will is valid and that no one has contested or has the right to contest the estate.
Once probate has been granted, the next of kin or the executor can start to deal with the deceased person’s assets. If there was a will, this sets out how those assets should be distributed and to whom and at what age. If the person died without a will the law of intestacy determines who should receive everything.
When is probate required?
The need for probate does not depend on whether there’s a will, it depends on the financial situation of the person who died. It is normally needed in England or Wales when the person who died owned property or had significant assets in their sole name, this is normally on anything over £5000 and may be required on 1st & 2nd death for couples if investments and assets were held in sole names.
It can be frustrating for executors as there is no uniformed amount that is recognised across banks, building societies or in the financial industry up to which these providers will release monies without the need for a grant of probate. Surprisingly, some banks will release anywhere between £5,000 – £100,000 with just a copy of the Will & a Death Certificate – without the need for a grant of probate!
This could cause major issues if there are outstanding debts or monies owed on the estate and monies have been released without a grant of probate! Although helpful during the Covid years, this has opened major issues and misuse of monies owed to people.
Carrying out the wishes of the Will
It is the executor’s responsibility to administer the estate and to carry out the deceased’s wishes within their Will, this requires the executors to check the Will and clarify what’s legally being asked. It is often assumed for example that between married couples on first death, that everything is going to the spouse with the odd cash gift or item being given to family, however there are thousands of Wills that have estate planning trusts within them that are triggered on first death and that require setting up and registering with HMRC under the new AMLD guideline that was introduced in March 2022.
This trust set up has also been retrospectively applied meaning that many widows may have Wills of their late spouses with trusts in that have not been legally set up. The results of this could lead to children being disinherited by property passing to the wrong beneficiaries through a remaining spouse rewriting their Will or remarrying, it could result in the reduction of IHT allowances as trusts were not disbanded within a two-year window after a spouse had died which could make the difference of hundreds of thousands of pounds being paid in unnecessary IHT!
Take professional advice
With more and more families trying to save money by dealing with probate themselves the words of Donald Rumsfeld “There are things we don’t know… that we don’t know.” are now more relevant than ever! The lack of knowledge surrounding Wills and probate procedures are costing families dearly. in fact, more than any fee professionals would charge to deal with probate correctly.
There are also missed opportunities to vary Wills of loved ones for IHT planning or to protect against life’s social issues, it is also a time when the reviewing of your own Will and estate planning is required as it has normally been many years since these were last done.
If you are widowed or executors of Wills and would like to double check if these subjects apply to you, please speak with our team to request a review and we will be happy to clarify any points raised above. If you are currently dealing with probate for a loved one or are about to – we have Probate specialists on hand to help guide you through these legal procedures at what can be a difficult time.