Is Probate Needed if There Are no Assets?
10 December 2018
When a person passes away, you need to work out if a Grant of Probate is needed to deal with everything they owned, known collectively as their Estate. If the deceased owned no assets in their sole name, then it's likely that Probate won't be needed, but there are some exceptions to this rule.
What is a Grant of Probate and When is it Needed?
A Grant of Probate is a document which grants the named person with legal authority to deal with the Estate of a deceased person. Whether a Grant is needed depends on the type of assets owned by the deceased and the value of the assets.
The best place to start is to make a list of any assets they have, whether these are held jointly or in the deceased's sole name and an approximate value of the assets.
Assets are any items or objects owned by the deceased that have value. Obvious examples are bank accounts, property, shares and life insurance policies. However, items such as cars, boats, paintings and even animals can count as assets and would need to be dealt with as part of the Estate.
Chain of Representation
One example where a Grant of Probate may be required even though the deceased does not have any assets is where they have been appointed as the Executor of a Will, or if they were the only person entitled to deal with an Estate under the Rules of Intestacy.
For example, say Z passes away appointing A as their Executor and leaving their Estate to B & C. A dies before dealing with Z's Estate. In this instance, a Grant of Probate is needed on A's Estate in order to then be able to administer Z's Estate.
A similar situation is where there are no assets in the deceased's name, but they are a Beneficiary of another Estate which was not finalised before their death. For example, this may be their mother's Estate. In this case their entitlement from their mother's Estate counts as an asset of their Estate and a Grant of Probate may be needed to transfer the assets from their mother's Estate to the deceased's Estate and then on to the Beneficiaries of the deceased's Estate.
Banks and other financial institutions have different limits of the amount of money they will allow to be released without a Grant of Probate. For example, Lloyds Bank will allow up to £50,000 to be released without requesting a Grant, however the Post Office only allows up to £10,000. As such if the deceased held £30,000 in Lloyds and £12,000 in the Post Office, the Post Office would require sight of a Grant of Probate but Lloyds may release the funds without this.
For a full list of Probate thresholds, see Bank Limits for Probate.
If the deceased only had small amounts in bank accounts it is likely a Grant of Probate will not be needed to release the funds.
If the deceased did not have any assets in their sole name, but owned everything in joint names with someone else (such as their spouse or civil partner) then these assets will be dealt with in a different way.
When it comes to property, this can be held jointly in two ways, either as joint tenants or tenants in common. If the property is held as joint tenants, ownership will pass automatically to the surviving co-owner. If the asset is held as tenants in common, a Grant of Probate will be required to transfer the deceased's share to the correct Beneficiary under the terms of the Will or Rules of Intestacy.
For bank accounts and any other assets held jointly, these will pass into the ownership of the surviving owner. The bank will simply take the name of the deceased person off the account, leaving it in the survivor's name. Probate will not be required for this.
An Estate is insolvent if the debts outweigh the assets of the Estate. In these cases even though there may be no funds to be paid out to the Beneficiaries, a Grant may still be needed to deal with the assets and pay off as much of the debt as possible. For example, if the deceased owned a house in their sole name but had a mortgage and other loans/credit cards that total more than the house is worth, the house still needs to be sold and funds allocated according to the order of priority of debts. A Grant of Probate is still needed to be able to sell the house.
However, if there are no assets in the deceased's sole name then it is very likely Probate will not be needed to deal with the Estate.