Do I need probate:
Is probate needed for small holdings with insurance companies, banks etc? A grant may not be needed where everything is straightforward and/or:
- the person who died left less than £5,000.
- They owned everything jointly with someone else and everything passes to the surviving joint owner.
- The value of the estate is well below the Inheritance Tax limit and the banks etc which hold funds are willing to release them without insisting on seeing a grant of probate. Sometimes they will release assets if you are able to show them the Last Will – and sign an indemnity (which means you have to repay them if things go wrong), plus a death certificate and proof of your identity as next of kin or beneficiary. But they are under no obligation to do so, no matter how small the amount they help for the deceased.
- But no need for a Grant of Probate does not necessarily mean that you don’t need to complete and Inheritance Tax return. It is often not needed, but far from always. For example, some people have given away money over the last 7 years, which must also be taken into account. In some circumsatances that may be as long as 14 years – so record keeping may be crucial.
Reducing the need for probate. Planning ahead.
There are things which can be done in advance to cut out the need for probate. Or at least cut the amount of work needed. We do offer, thorugh associatess, a full estate planning service which can help in all sorts of ways for those able to plan – after death, it is more about helping those left through measures such as Deeds of Variation,
However, there is one thing which can make things easier for most, and may remove the need for probate in very small estates. Where there was not a prepaid funeral plan in place, it may be possible to persuade the deceased persons’ bank or building society to release funds to pay for the funeral director direct. We’ve bolded “direct” as they will NOT reimburse anyone who has already paid the undertakers bill.
In some cases, this might cut the value of the estate or the account below the level where probate is needed.
Do I need Probate?
To find out whether the assets can be obtained without a grant, the executor or administrator would need to write to each institution informing them of the death. They should enclose a copy of the death certificate (and Will if there is one). Each will have different requirements before they will release funds.
The general rule of thumb is that probate tends to be required when a bank account holds more than £5,000. Some firms, however, have much higher limits – up to £50,000. Banks and others set their own rules about what they will release without seeing a Grant and what proof of entitlement they need. As well as that dangerous indemnity, they will ask you to accept responsibility if it turns out that there is a later Will, or it is challenged.
As soon as one class of asset requires probate, all assets have to be included, even if they are released before probate being granted. Please don’t get that wrong if you DIY!
Such as a house, flat, bungalow. Static caravans are normally considered as “chattels” and they are treated as general household goods. Property owned in the sole name of the deceased or under tenancy in common will need a grant of probate. Property owned as joint tenants will not necessarily require a grant of probate or letters of administration. The beneficial joint owner will normally automatically become full owner once the Land Registry has seen the death certificate. But that doesn’t mean that an Inheritance Tax return is avoided – the IHT and the Probate are two separate issues and the fines for getting it wrong can be very substantial.
Do I need Probate for Savings Accounts?
Many institutions will insist on a personal visit by the estate administrator, by appointment, for an in-depth interview lasting around 45 minutes. Proof of identity will be required, along with the Will and other documentation. Do not just turn up expecting to sort things out on the spot, ring first and find out specifically what their requirements are. After the interview, most institutions will then pass everything on to their central Bereavement Department who may well have added requirements.
Clearly, there is scope for reducing the need for probate by cutting the number of savings accounts. Bear in mind that it only takes one to need probate, and you have to go through the whole process for everything, not just the one requiring the grant. There are two dangers in combining accounts:
- The larger accounts may need probate when smaller ones might not.
- Consumer protection may be reduced where significant sums are help within one institution or group of institutions considered to be one for purposes of the Financial Services Compensation Scheme which (at the time of writing) covers deposits of up to £85.000 within one group of companies.
National Savings may release funds where they hold up to £5,000 without a grant of probate.* However, they are not keen on releasing funds to funeral directors, but may consider it on an individual basis.
Banks and building societies are also usually willing to release up to £5,000.* The Nationwide seem to have much higher limits. As professionals, these sort of issues are less of a problem as our associates can present the same paperwork to each institution by post.
Stocks and Shares and ISAs will pretty much always need a Grant: probate is usually needed where investments are held.
*Subject to satisfactory proof of entitlement.
What needs to go through probate? If probate is needed, all of your assets need to be considered, not just the ones where the asset holders specifically require to see a Grant of Probate before releasing assets. Typical triggers are shares, ISAs, insurances not in trust, property in your sole name or owned as Joint Tenants (which means that two or more people own a specific share of a house, typically half). These are the types of assets likley to mean probate is required even on smaller estates which may otherwise not need it.
Do I need Probate – Small Estate Left to Charity?
DL: I am the executor of my recently deceased aunt and would like to know if I require probate. The total assets of the estate appear to be less than £10,000 with no property involved. Her will leaves everything to charity.
You May – or May Not – Need Probate!
Whether you need probate or not depends on the type of asset and who hold it. Not having a property makes it easier. We have emailed you our general guide as to whether or not probate is needed which is a little more detailed. (Which is available to readers by email only.)
We can deal with this sort of estate quite cheaply of you wish, or you could use our and recover the cost from the estate – should probate be needed of course! We can do it anyway, but you may not need to spend any money when it will probably be very simple.
Essentially if you contact all of the asset holders and ask what there requirements are, you will soon find out if a grant is needed. If not, you can take the Will and death certificate in to everyone and get them to send a cheque direct to the Charity for the sake of simplicity, though you could collect the cash, recover your legitimate expenses and send an account of them and the change to the Charity – though they will undoubtedly argue about any significant personal expenses, where they would be quite happy if we had done the work for you and charged accordingly!
What assets will mean probate is required?
Be aware that the whole estate needs to be dealt with via an application for probate – if you deal with some assets but need probate for others you could be in serious trouble if you don’t record everything in the application for probate.
If there is more than £5,000 in a single account, there are no shares or ISAs, or investment bonds, then there is a fair chance you won’t need a grant.
Again, we could obviously do it for you if you wished.
What are the risks for the Executor?
You should always be aware that the executor can be personally liable if debts are undiscovered and unpaid or if beneficiaries appear after you have paid everything out, or decide to claim under the Inheritance (Provision for Family and Dependants) Act 1975.
There are ways to minimise these risks, which we can optionally put in place if you wish, but for the sake of your financial security, obtaining probate is an essential first step if you think there could be unknown debts or people who could claim to be supported by the deceased.
I haven’t included the full probate guide as you may well not need it – email back if you want it.