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What is probate? How it works and how to execute a will

Published

3 days ago

September 16, 2024

What is probate? How it works and how to execute a will

Once you have valued the estate and filled in an IHT form, if needed, you can complete a probate application form (PA1P) or apply online.

In England and Wales, there is no application fee for estates smaller than £5,000. For estates above this threshold, the fee is £300.

In Northern Ireland there is no fee for estates smaller than £10,000, otherwise a £261 application fee applies.

In Scotland, no fee is due for estates below £50,000. Between £50,000 and £250,000, it is £282. For estates bigger than £250,000, there is a £565 fee.

Inheritance tax (IHT) must be paid by the end of the sixth month after the death.

The executor can apply to banks with IHT423 form and request for HMRC to be paid directly. However, if there is not enough in the deceased’s bank accounts – for example, because the money is tied up in property – then you may have to cover this out of your own pocket.

If necessary, you can apply to HMRC to defer the payment, splitting it into 10 equal instalments, and then recover the funds once you have probate and the assets are sold. However, you will have to pay interest on the deferred payment.

Unhelpfully, the probate office will not grant probate until after IHT has been paid, but this should hopefully be the final step.

Once you have a grant of probate, order extra copies of the document so you can send it to multiple organisations. The fee costs £1.50.

Once probate is granted and any assets sold if needed, the executor can distribute the estate among the beneficiaries.

“Executors will need to produce estate accounts which will show the beneficiaries are receiving their full entitlement,” said Mr Hancox.

“They should also keep a record of any payments made to beneficiaries. Executors are responsible for maximising the inheritance of beneficiaries, so every effort should be taken to administer the estate efficiently and effectively.”

Probate problems

Hopefully the process of applying for probate will go smoothly but there may be some stumbling blocks.

Dealing with disputes

There is always a chance of conflict when money is involved.

Disputes can arise over the validity of a will or executors could even be accused of not managing the estate properly or fast enough.

Eleanor Gadd, partner in the tax and trusts and wills and estates team at Knights, said: “Validity of wills are challenged frequently, whether on the grounds of capacity or claims that the drafting does not reflect the deceased’s intentions at the time.

“Where individuals are not provided for, and they feel they should be, then claims against the estate can arise. Beneficiaries can fall out with each other or with the executor to the estate. The list is endless, and the earlier that sensible legal advice is sought the better.”

International probate

The grant of probate or representation deals with assets held in England and Wales, but it gets a bit messier when overseas assets are involved.

Typically, a separate probate process will need to be needed in each place where the deceased left assets.

Some countries may have reciprocal arrangements that recognise the English legal documents, but Andrew Reay, probate manager at Harbottle & Lewis, said the “real fun begins” in jurisdictions that struggle with our “strange, trust-based laws of succession.”

He said: “Many of our friends on the continent, for example, do not have the concept of an executor and will have no truck with English Grants of Probate.

“Instead, their succession laws mean that beneficiaries under a will inherit immediately on a person’s death.

“If you hold overseas assets, then as part of your estate planning you should always take local advice as to how their internal legal systems will treat your will and what steps your executors or beneficiaries will need to take in order to gain control of your assets following your death.”

Variations based on estate complexity

The complexity of applying for probate can vary.

Sally Cook, legal director at law firm Weightmans, said: “It can depend on what assets the deceased held, whether the estate is taxable, whether the deceased was domiciled in the UK and whether the deceased held a will.”

The process will be different every time, said Stephanie Parish, partner in private wealth at law firm Clarion.

She said: “In some cases, where the estate is simple, there is a will and assets are limited, obtaining a probate and administering the estate can be done within a number of months.

“Whereas, for some families where the estate is more sizable, complex and there is inheritance tax to pay, the process can be lengthy, taking several months or even years to complete.”

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