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Probate: When is a Grant required and what is involved?
A Grant of Probate is a Court sealed document that allows the executor to administer the estate of the person who has died. If they owned land or property in their sole name, a Grant will be required to sell or transfer the property. If they owned high value investments or large sums of money, a Grant will also be required. However, for low value estates or ones where the assets are all jointly owned, a Grant isn’t usually needed.
The Executor’s Duties
One or more executors are usually appointed in the Will. They have the legal responsibility to administer the Estate in accordance with the terms of the Will. The executors can either deal with this work themselves, or instruct a professional firm such as WSP Solicitors to act on their behalf. Probate can be a time consuming process and it is best to involve us at an early stage.
The required Steps and Actions
If we are instructed, we will make all necessary enquiries to establish the value of the assets and liabilities of the estate. We will then prepare the application for probate, including the Inheritance Tax Return. There is a short return to complete when no Inheritance Tax is payable and a much longer return if Inheritance Tax is payable. The majority of estates do not have to pay Inheritance Tax, because of the available exemptions and reliefs. Every executor applying for probate also has to sign a Statement of Truth. It can take some time for the Probate Registry to issue the Grant.
Once we receive the Grant, the assets of the estate can be sold or transferred to the beneficiaries and the debts, funeral and administration expenses can be paid. We will then prepare Estate Accounts and distribute the cash balance.
The administration of a simple estate usually takes up to three months. An average estate can take up to six months. The most complex estates will usually take a year or more to deal with, from start to finish.
What if there is no Will or the Executor has died?
If there is no Will, the Intestacy Rules will apply. They are a set of legal rules that state who will inherit in the absence of a Will. The beneficiaries have the right to apply for Letters of Administration. If there is a valid Will, but the executor has died or no executor was appointed, then a beneficiary can apply for Letters of Administration with the will annexed.
A Grant will be required to sell or transfer the property of the person who has died.
Changes to Probate Registry Fees
For applications made by solicitors or probate specialists, the current Probate Registry fee is £155. If you apply directly to the Probate Registry the fee is £215, if the value of the estate is £5,000 or more. There is no fee if you apply directly and the estate is worth less than £5,000.
Legislation was introduced to Parliament last year to increase probate fees, though in October this year, the Government announced the welcome news that the changes will be withdrawn. If the changes had gone ahead, there would have been significant increases for higher value estates.
If we are instructed to administer an estate, then our fees will also be payable. Other fees, such as estate agents fees in connection with the sale of a property, may be payable.
Dealing with Overseas Property
If the estate includes overseas property, in some cases it will be necessary to re-seal the Grant, in accordance with the laws of that country. If land or property is owned overseas, checks should be made to establish whether a separate Will was signed in accordance with laws of that country, to deal with the property there.
A Grant will be required for high value investments or large sums of money as well.
Post Death Variations
Within two years of the death, it is possible for a beneficiary to re-direct their inheritance by completing a Deed of Variation. The variation is effective for Capital Gains Tax and Inheritance Tax and it is as though the new beneficiary had inherited the property in the Will. In some cases, a Deed of Variation is preferable to the original beneficiary making a simple gift, because the gift will count, for Inheritance Tax, as part of the first beneficiary’s estate for seven years from the date of gift.
What if the Executor fails to take any action?
In that case, the executor can be asked to renounce probate, so that a beneficiary can apply instead. If an executor is incorrectly administering an estate, the beneficiaries may have to obtain their own legal advice and an application to the Court may be needed.
Occasionally, the executors will have to respond to a claim against the estate in accordance with the Inheritance (Provision for Family and Dependants) Act 1975. This law allows a limited category of persons, who did not receive a reasonable provision in a Will, to bring a claim against the estate to try to obtain a reasonable inheritance. We can advise usually the executors if claims are brought.
We hope this blog answered all your questions about when is a grant required. If you do need help with the administration of an estate, please contact a member of WSP’s Private Client Team.