When Does a Deceased Person's Estate go to Probate?
24 September 2018
An Estate will need to go to Probate when the value of assets owned by the deceased fall over a certain threshold or when assets are owned in a certain way. We explain how to establish if and when an Estate will need to go to Probate.
What is Probate and When Is It Needed?
Probate is the word normally used to describe the legal and financial processes involved in dealing with the Estate of a person who has died.
A deceased person's Estate is made up of all the assets in their name, such as any property, bank accounts, shares, life insurance policies, investments and personal belongings. Any liabilities (debts) that they had at the time of their death are deducted from the total value of the assets. Liabilities include funeral and wake expenses, credit card bills, loans, utility bills and mortgages.
Whether Probate is required depends on the type and the value of the assets in the Estate. For example, if there is a property held in the deceased's sole name, Probate will be required to sell or transfer it. In addition, Probate will usually only be required where the value of the assets are over a certain amount.
Each bank and financial institution has their own threshold for Probate. For example, Lloyds Bank will allow up to £50,000 to be released without Probate, 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 the Grant of Representation but Lloyds may release the funds without requesting a copy of the Grant. For more information, see Bank Thresholds for Probate.
Who Applies for Probate?
Where someone dies with a Will, they will have named an Executor – this will be the person responsible for applying to the Probate Registry for a Grant of Probate. However where there is no Will, the person responsible will be determined using inheritance laws called the Rules of Intestacy. This person is called the Administrator and they will be responsible for applying to the Probate Registry for a Grant of Letters of Administration.
Both documents give the person named the legal authority to deal with the Estate of the deceased and are referred to generally as a Grant of Representation.
Sole and Joint Assets
If assets are held in the deceased person's sole name, it is best to start by making a list of all the deceased's assets and their approximate values. You can then contact each asset holder to check their requirements and see whether you will need to obtain a Grant of Probate (or Letters of Administration).
If assets are held jointly then whether or not a Grant of Representation will be needed to deal with the assets will depend on the way they are held.
There are two ways assets can be held jointly, either as joint tenants or as tenants in common.
If the deceased held an asset as joint tenants with someone who is still alive, the asset will pass automatically to the surviving co-owner under survivorship. This applies even if the surviving co-owner is not named as a beneficiary in the deceased's Will or entitled under the Rules of Intestacy. Probate will not be required if all the deceased's assets are held as joint tenants as everything will pass automatically to the surviving owner.
If assets are held as tenants in common, the deceased's share of the asset does not pass by survivorship but will pass to whoever is entitled to inherit under the Will or the Rules of Intestacy. In these cases a Grant of Probate / Letters of Administration may be required to deal with transferring the asset to the Beneficiaries.
Will or Intestacy
As explained above, whether Probate is required depends on the assets owned by the deceased, not whether the deceased left a Will or not. A common misconception is that making a Will means Probate will not be required, however this is not necessarily the case.
If the deceased had high value assets or owned a property in their sole name then Probate will be needed to sell or transfer the property even if there is a Will. For more information, see Is Probate Required if There is a Will?
Where a deceased person held assets in their sole name but the amounts are very small or all under the asset holder's thresholds, these are referred to as Small Estates and Probate may not be required. It is difficult to give an exact amount where this will be the case as different banks have different limits but generally if the total value of the estate is under £15,000 then probate will not be required.
If you would like any help or advice as to whether Probate will be required for an Estate call our Probate Advisory team who will be happy to help you.