So, the following is what your appointed Executor will have to do.
What is Probate? Probate is a legal process that is required when a person has died. This involves dealing with the deceased’s estate such as, property, personal possessions, finances, taxes, collecting any monies owed, paying unpaid bills and any debts.
A Grant of Probate issued by the Probate Registry (a part of the High Court) is required before the Executor can deal with the estate. The deceased’s estate will be frozen until probate is granted, including bank accounts, investments etc. The Probate process also legally validates the Will.
Initial Stages of the process - Gathering the relevant documents and paperwork, including:
- The original Will + Codicil(s) – checking that this is a valid document and whether any additional evidence is required to confirm compliance with the Wills Act
- Obtaining death certificates – registering the death if this hasn’t already been done
- Obtaining Details of deceased’s bank / building society or national savings accounts – writing out to each institution to advise them of the death, ask them to freeze the account so no further debt is accrued and asking for date of death balances
- Obtain details of any shares & investments, again, with date of death balances including interest accrued but not paid
- Obtain details of the deceased’s tax affairs including pensions and annuities or other income
- Obtain details of any benefits received by the deceased, check if any overpayments have been made or if payments are due to the estate
- Obtain details of any life assurance policies and whether these are pre-nominated, written in trust or part of the distributable estate
- Obtain details of any properties held by the deceased including location of any deeds, if these are co-owned then whether they pass by survivorship or via the Will, obtaining valuations for Inheritance Tax purposes
- Obtain details or any debts or liabilities owed by the deceased, contacting the institutions to ask for outstanding balances and ask for interest to be frozen
- Obtain details of any gifts made or debts forgiven in the last 7 years
- Contact all companies to ascertain value of assets and amount owing for liabilities as of date of death. Arrange for a valuation of any properties.
- Contact all utility providers to advise them and obtain final statements for payment if the property is empty. Arrange vacant property insurance. Request council tax discount for vacant property.
- Request funds from accounts for the payment of the funeral and Inheritance Tax
Timescales - It can normally take 2 - 4 months for all institutions to provide the required information. This may be longer if the deceased owned foreign assets or if there are circumstances where it is more difficult to obtain valuations.
Apply for Probate - Once all asset and liability details have been collected and any properties valued, the following documents are then to be completed:
- Form IHT205 / IHT400 – these need to be submitted to HMRC and a tax clearance certificate obtained before probate can be granted. Claim any available reliefs on Inheritance Tax including any transferable allowances or exemptions. If Inheritance Tax is due on the estate it must be paid prior to the application and a receipt obtained. Interest is chargeable where Inheritance Tax is not paid within 6 months of the date of death.
Timescales - HMRC will take up to 3 months to issue a clearance certificate to show all tax has been paid where a full account is necessary (IHT400)
- Form PA1 (for personal applications only)
- Executors Oath (This will need to be sworn by a local solicitor / commissioner for oaths along with the original Will and any codicils)
- The completed documents must then either be submitted to the Probate Registry or for personal applications, an appointment booked with the local Probate Registry to submit the application.
Timescales -The court will normally issue the Grant of Probate within 6 weeks of receiving a completed application.
Post-Grant Procedure - Once Probate has been granted the Personal Representatives must complete the following tasks:
- Collect in all liquid assets by sending out copies of the Grant
- Arrange for the sale or transfer of any properties or shares & investments
- Discharge all debts and liabilities
- Place a s27 Statutory Notice to Claimants – this allows creditors 2 months to bring a claim for an unknown debt against the estate
- Settle the deceased’s tax affairs, including inheritance, income and capital gains tax. Complete an income tax and CGT return for the administration period.
Please note that, no distributions to beneficiaries can be made within 6 months of the date of the Grant as this is the period during which an Inheritance claim can be made against the estate.
- Settle any specific / pecuniary legacies in the Will
- Assent any property to beneficiaries
- Establish any trust created by the terms of the Will and transfer assets to the trustees
- Submit corrective accounts to HMRC where necessary, pay any additional Inheritance Tax that is due and obtain a clearance certificate
- Draft estate accounts for the residuary beneficiaries for approval
- Distribute the estate to the beneficiaries and obtain receipts
Duties of Personal Representatives
- Preservation of estate assets
- Insurance and maintenance of any unoccupied properties
- Identifying beneficiaries, the scope of their legacies and advising them of their entitlement and keeping them updated on progress
- To deliver an account to HMRC where relevant and pay any inheritance tax due, either from the estate or personally until reimbursements from the estate can be arranged.
- To calculate and pay any capital gains tax which may be due on gains made on the sale of estate assets by the Personal Representatives
- To ensure that all debts / liabilities are discharge from estate funds and to advertise by way of a s27 Statutory Notice for any unknown creditors
- Ensuring that any Will trusts are properly established, and the assets transferred to the control of the Trustees
- To draft estate accounts providing a full summary or all assets, liabilities, receipts and payments in the estate from the date of death up until finalisation of the estate administration
Do you think that the person or persons that you have appointed or are about to appoint will relish this job? Don’t panic, we can help them, tell them to contact us on 01529 306005, we can do it for them. We can even send them a free Guide now.