What is a Grant of Probate in Estate Planning?
Learn about what a Grant of Probate in estate planning is with this article that goes over this important document, how it works and how to obtain it.
What is a Grant of Probate?
A Grant of Probate is a legal document that authorises the executor of a will to manage the deceased’s estate according to the wishes outlined in the will. It ensures that assets are distributed legally, helps with estate settlement and ensures that all taxes and debts are paid.
Without a Grant of Probate, the estate executor may find it challenging to access the deceased’s assets, including bank accounts, investments, and property. It acts as a confirmation of the executor’s legal authority and the will’s validity (although this doesn’t mean the Will can’t be challenged after the Grant has been obtained – it can).
Application Process for a Grant of Probate
Obtaining a Grant of Probate can be a complex process, requiring attention to detail and adherence to legal requirements. To help you understand how it works, here’s a step-by-step guide on the probate process:
1. Registering the Death of the Deceased
The first step in obtaining a Grant of Probate is by officially registering the death of the deceased. This has to happen within five days in England, Wales and Northern Ireland. In Scotland, you have eight days to register.
2. Calculate the Value of the Estate
Next, you’ll want to find out the overall value of the estate, which includes tallying up any assets and liabilities. This can be quite a complex process depending on the size of the estate, so expect to contact a number of different institutions in the process. This might include:
- Banks.
- Fund managers
- Pension providers
- HMRC
- The Department for Work and Pensions
If there is property included in the estate, then this will also need to be valued.
3. Filing Inheritance Tax Documents
The next step involves determining whether or not inheritance tax will need to be paid by the estate. Generally speaking, this requires the IHT400 form alongside an inheritance tax reference, the estates valuation and a copy of the death certificate.
4. Filing Probate Applications
Once you’ve established the estate size and filed the estate tax return, you can move onto actually applying for the Grant of Probate. This will include filling out the PA1P form or the confirmation forms C1 and C5 if you’re in Scotland. You’ll also need to include a signed statement of truth.
5. Paying Probate Fees
In order to apply for the Grant of Probate, there are fees that you’ll need to pay. In England and Wales, there’s a flat rate of £273 for any estate over £5,000 in value. In Northern Ireland, the fees are £261 and in Scotland there is a sliding scale fee that starts at £266 for estates valued under £250,000. For any estates that exceed this figure, then the fee is £532.
6. Paying Inheritance Tax
The final step in obtaining a Grant of Probate is paying any inheritance tax owed. Once this is cleared, then you should be ready to have the will probate granted. If there are adequate funds in the deceased bank accounts, they can be used to pay the inheritance tax.
Complications Without a Grant of Probate
When a Grant of Probate is absent, the following complications may arise:
- Difficulty Accessing Assets: Financial institutions may refuse to release assets without proper authorisation, leading to delays and potential legal challenges.
- Legal Liability: The executor may be exposed to legal liabilities, facing disputes from beneficiaries or creditors.
- Tax Complications: Without proper authorisation, it may be more difficult to fulfil the deceased’s tax obligations, leading to penalties.
- Delays in Distribution: Failure to obtain a Grant of Probate can result in significant delays in distributing the assets to the rightful heirs, leading to conflicts among family members.
Probate Alternatives: Letters of Administration
In cases where there’s no will or the appointed executor is unable or unwilling to act, Letters of Administration may be sought instead of a Grant of Probate. This document serves a similar function, allowing a court-appointed administrator to handle the estate.
Probate is an Essential Part of Estate Management
A Grant of Probate is a vital element in estate planning and administration. It confirms the executor’s legal authority and ensures the smooth distribution of the deceased’s assets according to the will. Although obtaining this grant can be complex, its importance in preventing legal issues and family conflicts cannot be overstated.