ProbateGreater Tax Planning Flexibility
ProbateGreater Tax Planning Flexibility
What Is Probate?
Probate is the process involved in administering a person’s estate on their death. Either a Grant of Probate or Letters of Administration will usually need to be granted by the Probate Registry before this can take place. Both of these documents give legal authority to manage the deceased person’s affairs, including accessing their assets, i.e. personal possessions, property and money.
What is involved in probate?
Irrespective of whether there is a Will or not, administration of the estate is required.
In a nutshell, estate administration pertains to all activities relating to the valuation, collection and distribution of the deceased’s estate. This will include tax, legal and administrative activities and due to the complex nature can take a very long time with many forms to be completed, chasing companies over the phone and lots of paperwork.
Many of these administrative duties within estate administration apply even if there isn’t a valid Will in place, and even if probate isn’t required.
Administering an estate has several stages to it and varies in complexity from person to person depending on a number of factors such as the size of the deceased’s estate, whether there is Inheritance Tax due, how many beneficiaries are named in the Will, etc.
For non-taxable estates, the Executors need to submit the probate application form PA1, IHT form, an official copy of the death certificate, the original Will (and 3 copies) and any codicils and the application fee.
For taxable estates, the Executors must complete the relevant tax forms and send them to HMRC. This involves firstly identifying and valuing the individual’s assets to determine whether Inheritance Tax (IHT) is due. The deceased’s estate may owe other tax too, such as Income Tax or Capital Gains Tax (CGT). It is the Executor’s duty to determine this. Once such forms have been submitted to HMRC (and in some instances Inheritance Tax may need to be paid) the Executors need to submit the probate application form PA1, an official copy of the death certificate, the original Will (and 3 copies) and any codicils and the application fee to the Probate Registry and an appointment can be made to obtain the Grant of Probate. After visiting the Probate Registry the Grant of Probate will be made in a few weeks.
The Executor can then proceed to gather in all the deceased’s assets which may include property, personal possessions, bank and savings accounts, shares, insurance policies and sometimes business assets.
All debts will need to be paid, i.e. utility bills, credit cards, loans, maybe mortgages and outstanding tax. Assets may need to be sold, such as a house or shares.
Once this is all complete all the Beneficiaries of the Will must be located and paid any gifts or legacies due to them in accordance with the terms of the Will, or where there is no Will, according to the Laws of Intestacy.
Don't Feel Overwhelmed
When someone dies it is an upsetting time for friends and family members who may feel too distressed to deal with the issues that need prompt attention. Despite having to cope with their own grief, as soon as possible the death has to be registered, the funeral arranged, government forms completed and the Grant of Probate applied for. Here the Executor will have to collect assets, pay liabilities, complete tax returns, obtain identification of Beneficiaries and complete bankruptcy searches for Beneficiaries.
Often loved ones feel too overwhelmed to deal with such things and prefer instead to hand everything over to an experienced and professional firm who can deal with everything for them swiftly and exactly in accordance with the law, whilst also
When probate isn't requiredThere are some occasions where a Grant of Probate may not be required. This is generally where the deceased’s assets are worth £5,000 or less or where the assets were jointly owned with another person who is still alive, for example, if a husband and wife own their house jointly and the husband dies but is survived by his wife. In this instance the house would automatically pass to the other joint owner by survivorship, however, there is a procedure to follow in order to do this.
On behalf of APS Legal & Associates Ltd, Head office: Worksop Turbine Innovation Centre, Shireoaks Triangle Business Park, Coach Close, Worksop, Nottinghamshire, S81 8AP
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