Probate is one of the saddest aspects of law, as it discusses the death of an individual and the distribution of their estate after their passing.
Surviving relatives often have to fill the roles of executor, and the legal right to oversee, manage and distribute a loved one’s estate is referred to in law as probate.
What how exactly is it best to describe probate, when is it needed and how can you apply for this? Let’s find out!
What is Probate? An Introduction
As we’ve already touched one, probate is best described as the definitive legal right to deal with an individual’s property, money and possessions (or their ‘estate’) after they’ve died.
Without this legal right being granted, you cannot be confident that any financial plans you’ve made (such as selling the deceased’s main property) or distributing money among family members will be upheld.
In fact, you’re legally not allowed to act until probate has been granted, so it’s important to be proactive and apply for this just as soon as possible.
How to Get Probate
Obtaining probate can be achieved via application, and before starting this process, you’ll need to ensure that it’s required and you’re eligible to receive it.
In terms of the former, start by contacting the various financial organisations that the person who has died previously used, such as banks, lenders, and mortgage providers.
They can tell you if you’ll require probate to gain access to the assets, as each organisation has its own rules, and some are considerably more relaxed than others.
There are certain instances where you’re more likely not to require probate. For example, if the deceased has jointly owned land, property, shares, or money, these will automatically be passed to the surviving owners.
Similarly, if the deceased only had access to savings, probate won’t be necessary, and the process can be avoided completely.
Valuing the Estate and Calculating Inheritance Tax (IHT)
Once you’ve determined that you’ll have to apply for probate, one of your first tasks will be to estimate the value of the deceased’s estate and determine if it’s necessary to pay inheritance tax (IHT).
In simple terms, you won’t have to pay IHT at any rate if the value of the estate is less than £325,000, or this is gifted in its entirety to a spouse, civil partner, charity or community amateur sports club.
If the latter doesn’t apply or the estate is worth more than £325,000, it will be charged IHT at a rate of 40%.
Calculating the value of your estate enables you to proceed in an informed and suitable manner, while you can subsequently plan to repay any IHT tax that’s due ahead of time.
Otherwise, you may face delays when looking to distribute the deceased’s estate, which can be problematic when you consider that it already takes between six months and a year for beneficiaries to receive any money or assets that they’ve been left with.