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what is probate?

 

When a person dies with a Will, with (generally) more than £5,000.00 as any one asset, that asset is frozen and cannot be accessed without a court document called a “Grant of Probate”. The Executors, appointed under the deceased’s Will apply for a Grant of Probate at Court, after completing certain paperwork.
 
If a person dies without a Will this is called dying ‘intestate’. The nearest living next of kin are entitled to the estate and must usually also administer it. It is therefore the closest next of kin who are entitled to apply to Court for the Grant necessary to collect in the assets. This Grant is called “Letters of Administration”.
 
Either type of Grant is merely a piece of paper but importantly it gives an Executor or Administrator the authority to deal with assets in the particular estate in question. For instance, if banks and building societies hold money in excess of £5,000.00 belonging to the deceased, generally the Grant must be produced to them in order for the funds to be released.
 
The job of Executor or Administrator can be fairly time consuming depending on the size of the estate in question. A brief overview of the most common types of work that may have to be undertaken is given below. Sometimes matters are more complicated and the work required may be more extensive. Each case is unique so there is no one catch all rule for all.
 
Common duties are:-    
 
·        Registration of the death and dealing/assisting with the funeral arrangements
·        Valuing the deceased’s assets and debts and thereafter completing the correct Inland Revenue Inheritance Tax return
·        Arranging for payment of any Inheritance Tax due
·        Making the application to Court for the correct Grant
·        Collecting in the assets and/or selling any property once the Grant has issued from Court
·        Paying debts and liabilities owed by the deceased prior to death and paying any debts incurred on the administration of the estate,
·        Distributing the estate according to the terms of the Will, or the Intestacy rules where there is no Will. This may involve a transfer of the estate assets to the beneficiaries.
 
Ridley and Hall can help you with all of the above duties.
 
Other helpful information in connection with estates:-
 
1.            Inheritance Tax is payable on death at 40% of the balance above the nil rate band (NRB) threshold. The current NRB is £325,000.00 but note that the Government reviews this figure regularly. Please contact us if you are in any doubt..
 
            It may be possible to change, after the death, to whom the assets pass in the estate in order to reduce the amount of Inheritance Tax payable. You should take professional advice regarding this issue. Ridley and Hall can assist you in this area.
 
2.         Claiming the transferable nil rate band. In basic terms the procedure allows spouses and civil partners to transfer any part of their unused nil rate band (NRB) to the survivor of them. This applies to second deaths even if the first spouse died prior to 9th October 2007. Ridley and Hall will be able to tell you if this procedure is applicable to the estate you are dealing with and the type of information that you will need to provide to the Inland Revenue to claim under it.
 
3.         If any beneficiaries of an estate cannot be found the surviving family or other beneficiaries do not automatically inherit the missing persons share of the estate. In such a scenario it is advisable to seek the advice of a genealogist. In most cases, the missing beneficiaries will be found.
 
            If beneficiaries remain missing even after an extensive search Executors/Administrators have a range of options which they can take to protect themselves. Ridley and Hall can advise you of these options should it be necessary.