Finding Additional Assets after Probate Has Completed

27 June 2018

After someone dies, identifying everything that they owned is not always easy. If new assets are found during probate or after the process has completed, this can impact on the Estate's tax liability. It can also mean that some of the probate steps that have already been taken will need to be repeated.

Locating All of the Assets

Estate administration (also known as probate) is the whole process of dismantling a deceased person's assets, liabilities (debts) and distributing what's left to their beneficiaries. This is not a straightforward process.

People, even close family members, often keep financial and property affairs reasonably private. So one of the first hurdles to overcome during probate is identifying all the assets that make up a deceased person's estate.

There are tools available to try and identify everything that needs to be dealt with before the estate administration process begins. Some simple steps, albeit time consuming, such as full and detailed searches of the deceased person's home can often uncover paperwork for unknown assets.

It is also always prudent to make sure you contact all the relevant banks and other financial institutions that the deceased had accounts or other dealings with. They will be able to advise on the current situation regarding any potential assets or accounts and explain what needs to be done next.

In addition, the person dealing with the estate administration (known as the Personal Representative) can set up a mail redirection. This means that they would then receive the deceased's mail and be notified of any current paperwork which may relate to the deceased's assets and need to be dealt with.

Finally, there are databases which list out all of the unclaimed assets in the UK. Searches of these databases, such as Unclaimed Asset Register and Landmark Financial Assets, may mean a personal representative discovers assets which the deceased had even forgotten about! There will usually be a fee payable to use these services.

If Additional Assets Are Found After Probate

Hopefully, taking steps such as these will go a long way to avoid discovering additional assets after probate. However, even with the best intentions and preparations, assets may appear once you have gone a long way through the probate process and maybe even after you have completed everything. In such situations, it is important to follow the correct steps, and this may mean going back over work you thought had been finalised.

If an additional asset is found once the grant of probate has been issued, you will need to have the new asset valued. You will also need to take instructions from the institution which manages the asset (i.e. the bank) to see if they need to see the grant of probate in order to realise the asset to you as the personal representative.

The value of the new asset needs to be added to the value of the estate, which was included in the application for the Grant of Probate in the first place.

Inheritance Tax

This change in the total value of the estate could mean that the estate now becomes liable for inheritance tax when it wasn't before. Or, if the estate was already taxable, more inheritance tax might need to be paid.

In such situations, you will need to make sure you report the new estate valuations to HM Revenue & Customs (HMRC), arrange to pay the outstanding tax and any interest which has accrued on the tax account. Interest will accrue on the total sum of Inheritance Tax, six months after the date of death, even if the total sum of inheritance tax was not initially known.

If the institution which manages the asset confirms they need to see the grant of probate then it will be necessary to obtain a second, or amended, grant. This is because, the first grant obtained will not state the correct value of the estate and, as such, can only be used to deal with the assets which were accounted for initially. In many ways this is good news, as, if the estate is still being administered, the newly discovered asset should not delay the personal representative dealing with the rest of the assets.

What if the Estate Has Already Been Distributed?

If the Estate has already been distributed to the beneficiaries when the new asset is discovered, all of the above applies with regards to inheritance tax and obtaining an amended grant of probate. However, it will also be necessary to involve the beneficiaries of the estate as their entitlement may have increased in line with the overall estate value. The personal rpresentative would also need to update the estate accounts and ensure these are distributed to the beneficiaries accordingly.

The final considerations for the personal representative would be whether the new asset has been generating income (such as a rental property). If so, the personal representative would need to notify HMRC that more income was received by the estate during administration. Of course, this may mean an additional income tax liability (on top of inheritance tax) which will need to be settled.

Finally, if the new asset is an interest in land or property, then the time delay between the date of death and discovery of the new asset may mean that the property value has increased. If this increase is significant then capital gains tax will need to be considered and the appropriate steps taken by the personal representative to minimise the potential tax due.

After someone dies, identifying everything that they owned is not always easy. If new assets are found during probate or after the process has completed, this can impact on the estate's tax liability. It can also mean that some of the probate steps that have already been taken will need to be repeated.

With our Probate Complete Service we take full responsibility for getting grant of probate and dealing with the legal, tax (excluding VAT)*, property and estate administration affairs**.

*We deal with the inheritance tax, income tax and capital gains tax matters of the deceased person, and we deal directly with HMRC on your behalf.

**We can also pay all the costs of a Co-op Funeralcare funeral, providing the estate owns sufficient assets which can be sold in due course to repay our costs.

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