Probate FAQ
What is involved
in the administration of an estate?
Administering an estate
involves dealing with all the property, investments and other
assets of the person who has died and settling all their debts,
including income tax liabilities, and then distributing the estate
between the beneficiaries entitled under the deceased's will or the
intestacy rules. If the estate exceeds a certain sum, known as the
nil rate band (currently £325,000 for the tax year 2010 / 2011),
there may also be inheritance tax payable, subject to a variety of
tax reliefs. Estates falling within the nil rate band may also be
taxable if the deceased made lifetime gifts or settlements, or was
a beneficiary under a trust or settlement.
The most important form
of tax relief is the complete exemption from inheritance tax
between married couples and couples in civil partnerships, but
there are also highly beneficial, but complex rules providing tax
relief on business property and agricultural property. Charitable
gifts are also exempt from inheritance tax.
What if there is no will?
If the person who has
died has left a will, the executors can prove it and a grant of
probate can be obtained. If there is no will, the deceased is said
to have died "intestate" and his or her estate is distributed in
accordance with statutory rules. In such cases, a grant of letters
of administration is obtained, normally by a close relative.
What if there are problems administering the
estate?
If an estate is
incorrectly administered, or if the money is distributed before all
the debts have been discovered and settled, the executors or
personal representatives may be made personally liable. The
administration of an estate may also include defending attacks on
the validity of a will on the grounds of lack of testamentary
capacity or undue influence.
Is it always necessary to obtain a grant of
probate or letters of administration?
No. It is often the case
that husbands and wives hold their assets jointly and in such cases
the survivor of them may take over any jointly-owned assets upon
production of the death certificate. However, even in such cases,
it may be helpful to consult us for general advice first or to deal
with any minor assets which are not in joint names. Similarly, it
may still be necessary to settle the income tax of the person
who has died. In many cases it is not necessary to obtain a grant
of probate or letters of administration where the estate does not
exceed £5,000, but even so if there are a number of small assets
totalling less than £5,000, it may still be swifter and more
convenient to obtain a grant.
What is
a grant of representation?
It is a court order
issued by one of the probate registries of the high court. It
confers authority on the personal representatives (executors or
administrators) to administer a deceased person’s
estate. There are a number of types of grant of representation
but the two that are most common are a grant of probate and a grant
of letters of administration. A grant of probate is issued to the
executor, or executors, named in the will and it confirms the
authority of the executors whom the will appoints. A grant of
letters of administration is issued where there is no will, or
where there are no executors appointed in the will or the named
executors have died. A grant of letters of administration is issued
to the persons entitled in law to act as the deceased person’s
administrators.
Personal representatives
are obliged to administer the estate of the deceased according to
law. This involves collecting in all the assets, settling all the
liabilities, and distributing what is left in accordance with the
will or the rules of intestacy. Usually, apart from joint accounts
which pass automatically to the survivor, a grant of representation
has to be obtained before it is possible to gather in the assets
and discharge the liabilities of the estate.
Is it possible for someone to make a claim
against my estate?
Yes. Under the
Inheritance (Provision for Family & Dependants) Act 1975 it is
possible for certain persons to make a claim against your estate if
you have failed to make reasonable financial provision for
them. The persons who can make such a claim include a spouse
and also a former spouse. A former spouse cannot however, make
a claim if she or he has remarried or if the court barred such a
claim on the grant of the divorce. A child can also make a claim as
can any person who immediately before your death was being
maintained wholly or in part by you, or was living with you for two
years immediately before your death. Such a claim has to be
made within six months of the grant of probate of your will, though
this period can be extended by the court in exceptional
circumstances. It may therefore be wise to delay the
distribution of the estate until after this time period has
expired.
Get started:
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Contact
Alun Jones
Managing Partner
Head of Wills and Probate Team
E alun.jones@hughjames.com
T 029 2022 4871