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A brief
guide to probate issues
Probate
refers to the process of applying to manage the estate of someone who has died.
This management involves collecting the assets of a deceased person, ensuring
their debts and taxes are paid off and, finally, making sure remaining assets
are distributed to the beneficiaries of the estate.
It can be
quite a complicated and time-consuming process but Co-Operative probate advice can help guide
you through the legal maze and avoid any potential pitfalls. So, what do you
need to know about probate and the potential issues before you get started?
When is
probate required?
Probate is
usually required when property is held in the sole name of the deceased or as
tenants in common. This is when both parts of a couple, or any other joint
homeowners, hold set shares of a house – whether half each or any other
percentage. The more usual arrangement for couples is to own a property as joint
tenants. In this case ownership of the house automatically passes to the
survivor.
Probate may
also be required if the deceased benefited from a trust or held assets worth of
at least £5,000 with financial institutions. Some banks and other institutions
may have a higher threshold than this so it is usually worth checking with the
institutions individually.
Who
sorts out probate?
When a
person dies, someone has to deal with their financial affairs and associated
issues. This is known as administering the estate and is undertaken by an
executor or personal representative. If the person who died left a Will, the
document names executors who can apply for a grant of probate to handle the
estate.
If the
deceased died intestate (without a valid Will) the situation is a little more
complex. A grant known as letters of administration must be issued instead,
allowing a personal representative to take charge of affairs.
Details of
all the dead person's assets, including property, savings accounts and shares must
be gathered by those handling the estate and liabilities such as mortgages and
other debts must be deducted to work out how much the estate is actually worth.
Inheritance tax must also be paid if applicable and the estate must be divided
between the beneficiaries as outlined by the Will or the rules of intestacy.
Many people
prefer to let experts handle probate and issues regarding estate administration.
It is possible to do all this yourself but it can be a complex and stressful
process so it's worth seeking professional help. It should also be noted that
executors are liable for any miscalculations or errors. If you fail to report
and pay tax, or miss out a beneficiary, you could end up having to rectify your
mistake out of your own pocket.
