What is probate and how does it work?
What is Probate? It is the process of gaining formal approval from the Courts to collect in the estate of a person who has died, pay off their bills and distribute what is left to the folk entitled to them (known as the “beneficiaries”)
Probate essentially means discovering all of the assets and liabilities of the deceased person (and we mean ALL of them), filling in several tax and probate forms, paying any Inheritance Tax due, then applying to the Probate Registry for permission to administer the estate. Once that is granted, the executors gather in the assets, pay the bills and do whatever the Last Will instructs with the rest of the estate.
What is probate a will?
“Probate a Will:” when the deceased person has thoughtfully left a valid Last Will and Testament behind, that Last Will usually appoints an Executor or Executors. They are the people responsible for carrying out the process of probate. If they are professionals, they can be paid, but if the person who probates a Will is a layperson, then they can only recover out of pocket expenses. But they still have potentially substantial liabilities if things go wrong, and it has been known for solicitors to rub their hands in glee in anticipation of the ensuing law suit from disgruntled beneficiaries.
What is probate tax in the UK?
Apart form the costs of probate, probate Tax in the UK is Inheritance Tax which normally has to be paid before the grant of probate is issued putting executors in a difficult spot in many cases. Up until 2018 it is expected that probate tax (IHT) will be at a rate of 40% on the value of an estate over what is called the Nil Rate Band of £325,000. Married or civil registered couples who leave everything to each other can join there Nil Rate Bands together, so they only pay probate tax (IHT) over £650,000. We strongly recommend contacting us for help in taxable estates as the forms are much more complex and the penalties for errors can be very high indeed.
What does probate court mean?
The Probate Registry is in effect an arm of the Probate Court in England and Wales and it deals with all probate matters where there are no significant disputes.
How long does probate take?
Probate can take a long time, and 3 months to a year is not unusual. Sometimes many years in complex or disputed cases. The most common problem is issues discovering the full extent of assets and liabilities, and often of finding out who the beneficiaries are and where they are.