When someone passes on, their next of kin are obligated to apply for a grant of probate. Once they have sworn the oath, it gives them a legal responsibility to handle or manage any property, assets, and cash possessions left behind. This is commonly referred to as estate administration.
The person who receives this mandate is called the executor. Besides managing the estate, the executor is tasked with tying all loose ends on behalf of the deceased. This means paying debts, paying taxes, collecting owed funds, keeping tabs on estate accounts, and distributing assets according to the will.
The probate registry handles these cases. In case of any errors in the paperwork after the probate is granted, contact them immediately.
Your first action as the executor is to collect all the assets of the deceased. This might include liquidating some assets for easier sharing.
The executor is also in charge of paying debts starting from the funeral costs to impending taxes. If this duty befalls you, make sure to consult with an accountant if there are any pending tax returns to be paid. The inheritance tax, which should be paid six months before probate, is often forgone by most people.
If you used probate solicitors, their fees are part of the debts to be covered by the estate money.
Capital gains tax accrue from the sale of an inherited estate. Usually, beneficiaries receive the property at probate value.
If they choose to sell it, they’ll pay capital gains on any increase in value from the time of death to the time of sale.
A huge step in estate administration is distributing the assets to the next of kin. It is often marred with conflict especially when the deceased never wrote a will. If that is the case, the state assumes the role of distribution of the estate on the rules of intestacy.
If there is a Will, however, the executor can use it to share the property with the help of attorneys.
The application of probate is the easy part. The wait for money, on the other hand, can be painfully long. The duration depends on the size and complexity of the estate to be shared. Typically it can take between 6 to 12 months. The costs for probate can be met from the estate.
If it is a contentious probate, it can take even longer.
For instance, some assets might be tied overseas. In some cases, there might be a property that has to be sold. In addition, the estate itself might also be entangled in legal issues that need solving before distribution. All these factors make it difficult to have a fixed waiting period.
There’s a lot of information out there that can guide you on how to conduct the probate process.
However, be careful since probate cases often get rather complicated. Statistics show that a large number of executors have breached fiduciary duty when executing probate without a professional’s help.
On the other hand, probate solicitors fees are quite high. Most solicitors charge from 3% to 5% of the total value of the estate including tax. This allows them to gain more than they would if they charged a fixed fee.
However, using Probate specialists can often be cheaper as they charge between 2.5% and 5% and provide more or less the same service to that of a solicitor.
You can consider a specialist if:
• The estimated value of the estate is more than the inheritance tax threshold. Currently, the threshold lies at £325,000.
• There is no will left or when the legitimacy of the will is in question.
• Some portions of the estate are held in trust.
• The estate is declared insolvent/bankrupt
• Foreign assets are involved.
• The deceased lived outside the UK for tax-related reasons.
A settlement agreement is a legal agreement between the heirs regarding how the estates will be shared amicably. It helps the executor to control when and how the beneficiaries receive the inheritance. It also protects them from creditors and unwanted expenses.
This agreement will also come in handy when a will is challenged or when the deceased did not prepare any. For the latter, the beneficiaries have a say in how the assets are divided rather than letting the government handle it as the law dictates.
Probate is granted when a person has died. Lasting Power of Attorney (LPA), on the other hand, applies when the person is still alive but has no mental or physical capacity to make decisions on his own.
In the case of death, the individual with the Lasting Power of Attorney will have to relinquish his powers to an executor of probate.
A grant of probate is usually revoked when a will is discovered after probate had already been issued. This is done by the registrar in the probate office or district judge.
An exception is usually made when the deceased codicil is discovered after the grant is issued. In this case, revoking is not necessary as long as the executors in both documents are the same.
To avoid lengthy processes at the probate office, it is important to find the will or codicil of the deceased before you apply for probate.