Probate and Estate Administration Services
Frequently Asked Questions About Probate and Estate Administration
Kennan Kay & Co have prepared some of the most common questions asked about Probate and Estate Administration.
Probate is a term used to describe the legal process involved in administering the estate of a deceased individual, usually with someone taking control of the deceased person’s affairs.
A personal representative is a collective term to describe those persons who have control over the deceased person’s affairs and that control can come from the appointment of executors in a Will or by persons being beneficially entitled to the deceased person’s estate where the deceased has died intestate, without a Will.
The authority of executors’ stems from the deceased person’s Will and is confirmed by the executors obtaining grant of probate, whereas personal representatives’ authority under an intestacy stems from them obtaining the grant of representation. Persons acting on an intestacy will not have any authority until they have obtained the grant.
A grant of representation is a general term used to describe any form of grant. The most common grants are a “grant of probate” obtained by the executors under a deceased person’s Will and a “grant of letters of administration” obtained by personal representatives where a deceased person has died without a Will. There are other forms of grant to cover other situations.
Whoever has control over the deceased person’s affairs will have the duty of dealing with the administration of the estate which means that they will collect in all the deceased person’s assets, pay all liabilities of the estate both at date of death and during the administration process. Whatever is left in the estate after all liabilities have been paid is known as the residuary estate which they have a duty to distribute in accordance with the deceased’s Will or under the intestacy rules if the deceased has not left a Will.
If the deceased person owns his own property the personal representatives will need to obtain a grant of representation in order to deal with the sale or transfer of the property. In addition, a grant will also be required to deal with stocks & shares or substantial sums in saving accounts.
A deceased person’s estate will include all assets held by that person in his/her sole name at the date of his/her death. Such assets will include houses, stocks & shares, savings, life policies, household contents, jewellery, cars, yachts, business assets and any property held abroad. Any liabilities in the name of the deceased at the date of his/her death will be deducted from the value of the assets to produce the value of the net estate. Where the deceased has died domiciled in the United Kingdom, the deceased’s worldwide assets are taken into account for inheritance purposes, whereas if the deceased has a foreign domicile then only the deceased’s assets in the United Kingdom are taken into account for inheritance tax purposes.
A deceased person’s estate is valued as at date of death. In other words, all assets held by the deceased at date of death are valued at that date. It will be the duty of the personal representatives to obtain those values. Different assets are valued in different ways and some assets are more difficult to value than others. Houses are valued on the basis of what the current market value of the property is at the date of death. Stocks & shares are valued from a special calculation using the higher and lower values of the shares applicable on the day the deceased died. Savings are simple and straight forward in that it is the balance on the deceased’s account which is taken but the personal representatives should also ask for any interest arising which may have accrued but not yet credited to the account at date of death. Business assets may be problematic to value and the personal representatives may need to employ a firm of accountants to value such assets.
Inheritance tax is a death duty and is paid mainly, if at all, on death. Currently, every individual has an inheritance tax threshold (nil rate band) of £325,000. If the value of a deceased person’s estate at date of death is over this threshold then the deceased’s estate may suffer tax at 40% on any sum over the threshold. There are instances where no inheritance tax will be payable even if the estate is over the inheritance tax threshold because the net estate passes to exempt individuals such as surviving spouses or exempt organisations such as charities. Personal representatives can apply to transfer any unused nil rate band on the first death in husband and wife scenarios to the survivor’s estate which will have the effect of reducing any inheritance tax payable on the second death.
It all very much depends on what assets are in the deceased person’s estate and whether any inheritance tax is payable. It also depends on how quickly the personal representatives can have the assets valued and how quickly organisations reply to the personal representatives. If there are no difficult assets to value the rule of thumb is that the personal representatives should be in a position to lodge the papers with the probate registry to lead to grant of representation between 6 to 8 weeks following the death of the deceased. Once the papers are lodged with the probate registry it usually takes between 10 to 14 days for the grant to issue. The personal representatives will then be in a position to administer the estate which can take between 6 and 12 months depending on the assets in the estate. The administration process can take longer where the estate is liable to inheritance tax.
Contact Kennan Kay & Co for assistance. They will be able to assist you in obtaining the grant of representation only, or assist you in obtaining the grant and deal with the full administration of the estate.