Probate is an old-fashioned word meaning ‘something proven’, in this case the intentions of a person leaving a will. In fact, much of our UK law around succession has strong overtones to days when marriage was sacrosanct, and the church was responsible for what happened to the assets of a deceased estate.
However, we are now in the 21st Century, and you the reader have ended up being the executor or administrator of an estate. This article details the basic steps of how to finalize the estate legally in general terms. You should speak to your solicitor if in any doubt, because each estate is different and there may be complications.
The Principles of English and Welsh Probate
This article is about the rules the government applies in England and Wales. Scotland and Northern Ireland are slightly different, especially in terms of words and definitions.
Probate refers to the financial and legal procedures for dealing with the assets of a deceased person. These include their money, possessions and property. Before their executor or next of kin can do anything with them, they have to apply for a Grant of Probate.
However, this is only the case if the deceased person left a legal will or last testament. If they did not, then their next of kin or another suitable person must apply for Letters of Administration. The process is similar: it’s just the way the law works and there is no arguing that.
Once the next of kin (or executor) has either a Grant of Probate – or Letters of Administration – they can begin allocating the assets to their rightful heirs.
- If there is a legal will the allocation must follow it exactly
- If there is no legal will, then the laws of succession apply
- If there are no legitimate heirs, the assets belong to the state
Following the Five Stages of the Probate System in England and Wales
Step One: Trace all the late person’s assets and determine their value for inheritance tax. Determine all their liabilities including loans, mortgages, utilities etc. Use this information to calculate the value of their estate. However, if there is no legal will, obtain proof of identity of the heir or heirs under succession law.
Step Two: Pay inheritance tax to HM Revenue & Customs where the estate value exceeds the threshold. Send in a zero return if no tax is due. Obtain a Grant of Probate or Letters of Administration from the Probate Registry giving you legal authority to wind up the estate.
Step 3: Liquidate sufficient assets to settle the deceased person’s liabilities, pay final administration expenses, and any outstanding inheritance tax, income tax or capital gains tax due by the Estate.
Step 4: Prepare a set of accounts for the estate. These must account for all receipts and payments, and balance back to the amount of cash in the estate. Obtain approval of the accounts from the personal representative (executor in the will) or the persons with inheritance rights under succession law.
Step 5: Wind up the estate, provided there are no outstanding challenges to your actions and decisions thus far, or other complicating factors. If there are none, then you can transfer the assets to the rightful beneficiaries, and distribute the entire balance of funds in the estate.
We hope you found this article useful, and appreciate why each one of us should have a legal will.
