What is Probate?
Probate is the general term used for the process that must be followed in the event of your death, in order to gather in your assets and distribute them to your heirs.
Probate, or more specifically, a “Grant of Probate” is the Court document that generally allows specific individuals (your “Personal Representatives”; or more often referred to as executors or administrators) to step into your shoes and manage your assets and personal affairs in the event of your death. (In fact, a Grant of Probate is just one of many different forms of Grant of Representation, which at their core, all do the same job.)
Until Probate is received (and depending on the value of your assets), generally your assets will be frozen and the Personal Representatives will not be able to deal with them, which means that they will not be able to sell or transfer any of them, or make distributions to beneficiaries.
What is Required in the Probate process?
The Probate process and the role of a Personal Representative can be very onerous.
It is a personal appointment and can carry with it personal lability if something were to go wrong. The job itself is largely an administrative one: the first task of which is to ensure that, in the event of your death, your assets are protected for the beneficiaries. Subject to that, the next steps can be considered.
It is important to note that the role is voluntary and, just because you have been named in a will as an executor does not mean you have to accept it.
How to Apply for Probate
Before applying for the Grant of Probate, the estate and its assets must first be valued; this can be a laborious task as contacting the relevant asset holders can be time consuming. The values obtained will then form the basis of the Inheritance Tax return which must be sent to HM Revenue & Customs (and any tax falling due must be paid at this stage).
Once this has been done, and a receipt has been issued by HMRC, the application for the Grant can be made.
In terms of the timelines, applications for Probate are currently taking around 8 weeks to process. When factoring in dealing with the asset holders, HMRC and the Probate application, it might take around 6 months before the Grant is in hand (and it can be much longer than this in complicated estates).
Once Probate has been Granted
With the Grant of Probate in hand, what next?
The Grant acts as proof that the Personal Representatives have the right to deal with your assets. At this point, they can finally begin to collect in the assets of the estate (e.g. close down the bank accounts and bring all other relevant assets under their control).
The liabilities can then be paid (tax, debts, etc.) and it is at this point that the Personal Representatives would typically consider distributing assets to the beneficiaries of the will.
The aim of the process is to ensure that all loose ends are tied up: lifetime taxes and debts are paid, accounts and subscriptions are closed, any potential claims addressed and, finally, the remaining funds are paid to where they are due.
The concept of Probate is a simple one. In practice, however, it is rarely that and if dealt with incorrectly can be fraught with issues. As such, if you are asked to be an executor, you should consider the role carefully before accepting it and, at risk of sounding self-serving, seek the help of professionals!