Ten things to know before applying for probate
This guide is aimed at anyone who has been appointed as an executor. Use these tips from the time you know you’ve been appointed as executor (i.e. whilst your friend/ relative is still with us). It also has some information on what to do following death. For further or more in-depth information the Gov.uk website provides helpful guides and information.
“Probate” is the process of applying to court for the right to deliver the wishes in a will for a deceased person’s estate. You can see additional guidance in our “what is probate” guide. You will apply for probate if either (a) you have been appointed in the deceased’s will or (b) you are the nearest relative of someone without a will. Professional solicitors or accountants can be brought in to help too.
1. Don’t get left in the dark
You should be told when someone wants you to be their executor. This usually happens before the will is made but not always. From that point onwards you need to make sure you know key information. It’s up to you and the person appointing you to agree where to draw the lines of confidentiality.
Know where the will is. As executor you will have to apply to the Court for Grant of Probate for most estates. To do this you need to produce the original will. You should ensure you know exactly where the will is and how to access it.
If the deceased owned everything jointly with someone else then their share automatically passes across to the survivor. NS&I require probate for estates with assets more than £5,000. Many banks only require probate for larger estates from £50,000.
Understand financial affairs. To get probate you will have to give information on the value of the deceased’s estate. You therefore need to know either (a) what the estate consists of, or (b) how to find this information out. If the estate is worth more than the Inheritance Tax threshold you will have to arrange the payment of tax from the estate too. You also need to understand (or be able to find out) what gifts the deceased has made over the past 7 years.
Until you get probate you won’t be able to settle debts of the deceased or pay the gifts that they wanted to make.
2. Keep a record. Of everything
Even the financially astute are surprised at how much work is involved in getting probate. Bigger estates tend to have increased amounts of work required. As mentioned above – you need to know about any gifts that the decased made in the last 7 years of their life too.
You’ll need to value everything the decased owned. The value needs to be as at the date of their death. You may find HMRC take a particular interest in this so it’s imperative to have a strong paper trail.
3. Prepare for delays
Once you’ve got your application together it usually takes four to six weeks for the Courts to grant probate. This timescale can increase though. In 2019 a new computer system caused long delays.
The 2020 Pandemic caused all sorts of problems. Difficulty getting valuations for assets, fewer solicitors at the office, delays for information and vital forms (including Death Certificates), post office closures etc.
4. Death certificates. Get a lot of official copies
You’ll find that everyone wants to see a copy of the death certificate. A photocopy will not be enough – it’ll have to be an official government issued. Banks, Land Registry, other investment houses, some websites. The list goes on. Official death certificates cost £11 each. You will be able to get this back from the estate of the deceased in due course.
Thankfully the government now have a “Tell Us Once” service so you won’t have to go through every department. If you registered the death you can do this with the registrar – otherwise see here. This saves telling DWP/ Driving Licence Agency/ Council/ Passport Office etc individually.
Once you start sending out death certificates and informing people of the death be alert for incoming correspondence. For example a pension company or the DWP may have sent a payment after the date of death and they will want paying back. This can be paid out of the estate in due course.
Major banks and building societies have a similar service collective notification service and details can be found here. You’ll still need the account numbers and sort codes so you’ll need to know where to find these (see point 1 above). Non participating banks or institutions will still want to receive a copy of the death certificate individually. Either way, the banks will be in touch with you about next steps within a week or two.
5. Lasting Power of Attorney
Lasting Power of Attorneys or “LPAs” are strictly for use whilst someone is alive. Once they die the LPA will cease to have effect. This is true even for people who are both attorney and executor. This can lead to an unusual situation where you have to go through the process of proving who you are and your powers as an executor where the institution you’re talking with already knows you.
There’s little you can do about this. You’ll have through the hoops again.
6. Prompt payment of inheritance tax
Inheritance Tax (or “IHT”) will be due six months after the end of the month of death. Submission of the IHT form is due 12 months after the death. This is a short timeline and many executors find themselves still deep in the process of understanding the estate when this date comes.
If you miss these deadlines the estate will have to pay interest on late payment plus a fine. These stand at 2.6% and £100 respectively at the time of writing. This is something that may be unavoidable so treat it as a cost to the estate.
7. Gifts made in the last seven years of life
As mentioned above you will need to know about gifts made in the last seven years of the deceased’s life. These can be found in bank statements or other records. This is important because HMRC will count the value of some or all of the gifts in the Inheritance Tax calculation. This is why clear communication between you and the will maker is so important during their life. If they don’t want to tell you there and then – they need to tell you how you can find this sort of information out.
8. Professional advice and costs
Many executors start the process prepared to do everything on their own. It can appear an attractive option as it preserves the estate for the intended beneficiaries. In many cases the executors will be successful. However, many more will find this burden (twinned with the loss of a loved one) overwhelming. Professional executors such as solicitors are familiar with this and they can step in and help.
Be aware that professional advice comes at a fee. Also be aware that it’s okay to query and negotiate a fairer price. A firm of solicitors will typically aim to charge 2.5% of the estate. Fees on an estate valued at 400,000 will be £10,000 at this rate. If this makes you or the beneficiaries uncomfortable you can negotiate a fixed fee in advance. A fixed fee of a few thousands of pounds on an estate worth over £1m is not uncommon. It does, of course, depend on the complexity of the estate.
If you don’t ask for it though – you won’t get it.
9. Valuations and the value trap
Valuations can also be expensive. In the worst cases they are also based on the value of an asset. As above – don’t be shy in negotiating. Everything from property to shares to jewellery will need to be valued.
If an estate is above or near the IHT threshold be particulary careful to ensure that valuations are professionally done, fair and a true representation fo the estate at the date of death. If an estate is significantly below the IHT threshold then, for example, you may wish to use estate agent valuations, or compare values of nearby similar sold properties. If in any doubt – speak to a professional.
During a recession the value of assets of the deceased will reduce. This can leave the value of the estate at the date of death higher than it is when you finally get probate. This may mean that you end up having to pay more IHT than is representative for the value of the estate when it is distributed. This can be a painful and expensive experience.
10. Protecting assets in the estate
As an executor you are responible for the assets left behind. This is particularly important when a home is left empty. Speak with the insurance company and make sure that the continuity of insurance is not affected.
You may want to put valuable assets into safe storage so they are not damaged by accidental or malicious damage. In some cases the property may need to be professionally secured.
If you have any questions about the above please get in touch with us either by telephone or email. Our contact details can be found here.
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