Probate - why is it needed?

 

When someone has died it is their last Will that dictates what happens to their assets. It also asks individuals (the 'executors') to accept the responsibilty of putting the Will into effect. If there is no Will then the law of intestacy applies - effectively a default Will laid down in relevant legislation with the main beneficiaries being the ones who can act as administrators (roughly equivalent to executors appointed in a Will).

 

But how can the executors prove that the document they are implementing is 

• a valid Will?
• that it is the last Will?
• that the person knew what they were doing when they signed the Will?

• that it was made without any undue outside pressure?

 

Without official confirmation a bank cannot be certain they are giving the savings to the right person. Similarly a potential buyer of a house needs confirmation that they are handing over money to the right person, even though they are not named on the title deeds? It is the probate process that deals with this, resulting in the issue of a Grant of Probate. The Grant is a certificate issued by the Courts to confirm officially that the named people are the right people to be dealing with the assets.

 

In order to obtain a Grant the executors will have had to make solemn declarations regarding the status of the Will and if they have lied or misrepresented the situation then they will be in serious trouble. There will have been an opportunity for others to have raised objections if they had evidence that something is wrong. If later on it emerges that there was something wrong, it is the executors who are responsible - not the bank who had held the accounts or the purchaser of the property.

Probate - why isn't it always needed?

 

Although probate confirms the situation regarding a Will, quite often an estate can be administered with obtaining a Grant. This is because many organisations will hand over the assets that they hold without seeing a Grant - provided the savings are not of high value and the situation does not raise any suspicions. Nevertheless they are taking a risk, that they might be giving the savings to the wrong person.

 

It is up to each organisation to make its own assessments of the risk they are taking. Most work on the basis of setting a limit on the total value that the deceased had invested with them; above that limit they will insist on seeing a Grant before giving out money. Each organisation has it's own limits, but currently (mid 2024) most major banks set a limit of £50,000. But there is no obligation on them and any one organisation has the right to set a limit as high or as low as they choose.

 

When it comes to houses it works differently; if there is a property to be sold or transferred then a Grant of probate will be needed.

 

Even if there is just one asset that requires a Grant then most organisations will hold on to even the small assets until the Grant is available.

 

It is worth noting that where there are joint assets then typically they pass automatically to the surviving joint owner(s). This can make the administration of the estate much easier. It is the reason why probate might not be needed when the first member of a couple dies, but is needed when the second member eventually passes away.

Probate - the process

 

Thankfully in recent years the probate process has been simplified. It means that more ordinary people could deal with it themselves. However, that does not mean that the legal and financial responsibility is any less than it used to be. As soon as you start acting in the role of executor then you pick up those responsibilities and they sit with you for many years. Do not start dabbling with sorting out an estate before you appreciate just what you are taking on.

 

There is a relatively straightforward application form to be completed for probate. However, the form always requires some information the individual's estate. Provided the estate is not liable for inheritance tax and also does not trigger certain financial indicators then the figures needed are just a few fairly simple totals.

 

However, if inheritance tax might be applicable or any of the triggers apply then an additional inheritance tax form has to be submitted and that can be a much more daunting prospect. If tax is payable then the executor is responsible for calculating that properly and for getting the bill settled, before the grant of probate can be issued. 

 

Whether the probate application is simple or complex, you should remember that it is just part of the overall responsibilities of an executor. Debts need to be settled, assets gathered in and taken care of until everything is properly accounted for and ultimately distributed to those with a legal right to inherit. If there is a trust involved typically the executors become the trustees, with a long term responsibility to manage the assets put into the trust.