Probate, also known as estate administration is the right and process of dealing with the estate of a deceased person.
If the deceased left a will before they died then they may have named the person or people whom they want to leave this responsibility with. They will be referred to as the executors of the will.
If the deceased died intestate-i.e. without will, or did not name anyone as an executor, then a close family member can apply for grant of letters of administration and will become the administrator of the will and therefore be given the right to deal with the estate.
The executor of the will and the administrator are referred to under the umbrella term of personal representative.
Personal representatives will have very important duties that need to be carried out during the probate process, for example,
- Evaluating the assets of the estate
Evaluating the assets of the estate is one of the first things that the personal representative should do when dealing with the estate. This is so the personal representative can decide whether they need to obtain a grant of representation and also calculate whether inheritance tax should be paid or not. Evaluating the assets will basically include making a list of the assets that were owned by the deceased and valuing them in monetary terms.
Assets that make up the estate will include anything the deceased owned, varying from:
- Money in a bank/ building/ saving society
- Jewellery and antiques
- Business assets or even any businesses
- Buildings or land- this may need the help of a professional evaluator
- Shares or any other investments
- Motor vehicles
- Their share in any jointly held property
- Any gifts the deceased may have given away that are not exempt from evaluation
The personal representative should also deduct any debts from the total valuation of assets and gifts. The balance remaining would be the overall value of the estate.
- Obtaining the grant of representation
Most bank accounts or building societies will not hand over the deceased’s assets until the grant of representation is obtained. This is also known as the grant of probate. This is the document that gives the personal representatives permission to carry out probate and deal with the estate. A personal representative will need to fill out the relevant application forms and attend a meeting with probate officials before the grant is sent to them in the post. For more information visit our grant of representation page.
- Pay inheritance tax
Inheritance tax needs to be paid if the deceased’s estate is over a certain threshold. If it is, then the excess will be taxed at 40%.
- Distribute the balance of the estate
Once the grant of representation is obtained, the estate is valued and the inheritance tax is paid then the personal representative will distribute the estate in accordance to the terms of the will, or under the rules of intestacy if there is no will. There must be a record kept of this.