For free initial advice on Probate call our Probate Advisors on 03306069584 or contact us online and we will help you.
When someone dies, their personal affairs need to be wound up, such as any outstanding debts paid off and their money and possessions distributed to the people set to inherit them. This process is known as the administration of the deceased person’s Estate and the person who carries out this task is called the Personal Representative.
If the person who died left a valid Will the Personal Representative is also known as an Executor. If there is no Will then the Personal Representative is known as an Administrator.
The point at which the Grant of Probate is issued by the Probate Registry is something of a milestone in the administration of an Estate. The Grant of Probate gives the Personal Representatives the authority to deal with many of the assets in the Estate, such as selling or transferring property, closing bank accounts and cashing life insurance policies.
With our Probate Complete Service we take full responsibility for obtaining Grant of Probate and dealing with the Legal, Tax (not VAT), Property and Estate Administration affairs*.
*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.
What is a Grant of Probate For?
The Grant of Probate gives the Personal Representatives legal authority to take control of the assets in the Estate, and in many cases enables them to gather these assets into the Estate ready to be cashed, transferred or sold. The Grant of Probate enables the administration of the Estate to proceed.
Closing Bank Accounts
Liquid assets (i.e. monetary assets such as bank accounts and other cash holdings) are often the first assets to be dealt with on the issue of a Grant. Some of these may of course have been dealt with already, without a Grant being required.
All banks have a maximum threshold of money that they are willing to release without a Grant of Probate being required. If the amount of money held in the account exceeds the banks’ thresholds, then money will not be able to be withdrawn and accounts will not be able to be closed until Probate has been granted.
Cashing Life Insurance or Pension Policies
Many life and pension polices, where lump sums are payable to the Estate, require the Grant of Probate to have been obtained before the money can be claimed. This is because the Grant gives the Personal Representatives the authority to give instructions on behalf of the deceased person’s Estate. In limited circumstances, companies might only pay out to the person named on the Grant of Probate.
The Grant of Probate also enables the sale of a property to proceed. The Personal Representatives would now have the authority to sell or transfer any property which is owned in the sole name of the deceased.
Administering the Estate
Once funds have been received into the Estate, it is the responsibility of the Executors to administer the Estate and there is an order in which this needs to be done.
Firstly, any outstanding debts that the deceased person has on their Estate will need to be paid. Many of these debts will have been known about when the application for the Grant of Probate was made, and these should be settled at this point. There may of course be further debts that arise during the course of administration, so it is crucial to retain enough money in the Estate to account for these.
Sometimes notices are placed in the press to make creditors aware of the person’s death and ask them to make their claim against the Estate. This will usually give a deadline that creditors need to make their claim by. Protection will be offered to the Personal Representatives in case any creditors come forward after the deadline, so there will be a degree of certainty regarding the amount of debt on the Estate.
Distributing the Estate
Once outstanding debts have been paid, the Personal Representatives can then distribute what’s left in the Estate to the Beneficiaries (the people or organisations that will inherit from the Estate). If the deceased person left a Will, then this will set out who the beneficiaries are. If there is no Will, then the Beneficiaries will be determined by the law under the Rules of Intestacy.
If a specific amount of money or a specific item has been left to an individual in the Will, then this is known as a “Legacy”. Legacies are always paid or transferred first and then the Personal Representatives can see what’s left in the Estate once all liabilities and legacies have been paid. They will then be able to determine whether an interim distribution can be made to the residuary Beneficiaries (those set to inherit what is left).
It is not unusual for distributions the residuary Beneficiaries to be made in two parts. The first payments will be made when the majority of funds have been received and the second once the administration is complete, at which point a (usually) smaller payment will be paid. In some instances, it may be that the cash assets have been dealt with, but a property sale is yet to complete so there may be a larger payment due to Beneficiaries at a later point.
When all of the assets have been collected in and all debts are known (for example the final utility bills will not be issued until the property sale has completed), the Personal Representatives can prepare the final Estate accounts.
Responsibility of the Personal Representatives
Personal Representatives are responsible for every penny coming in and going out of the Estate, and the final Estate accounts can be scrutinised by the Beneficiaries. If the Personal Representatives have instructed our Probate Solicitors to act on their behalf, we will prepare the Estate accounts, for the approval of the Personal Representatives.
If the Personal Representatives are acting independently, they will need to prepare their own Estate accounts. Provided that the accounts are agreed by the Beneficiaries, the Personal Representatives can distribute the Estate to the Beneficiaries. The main job of the Personal Representatives is then finished.
Appointment as a Personal Representative is lifetime appointment however, and this responsibility doesn’t end when the Estate has been distributed. This means that if any previously unknown assets come to light in the future, the Personal Representatives are obliged to deal with them and ensure that they are distributed to the Beneficiaries.
For free initial advice on Probate call our Probate Advisors on 03306069584 or contact us online and we will call you.