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TAX NEWS - 2010

How the probate of estate process works

If you've been made responsible for the estate of someone who's died - a family member, a friend or even a professional colleague for example - then the chances are that your first priority will be to apply to the probate system.

If the deceased's assets are worth less than £5,000 and doesn't include any land, property or shares than getting a grant of probate of estate is unnecessary - the estate isn't required to pass through the probate system. Similarly, some estates can be passed immediately to surviving spouses or civil partners because the assets were held in joint names.

In most cases though, you'll almost certainly need probate to fulfil the duties of an executor and to pass on the deceased's assets to beneficiaries. It's required by law for all estates where the deceased had assets worth more than £5,000 in total or if they held any land, property, stocks, share or even some insurance policies in their own name.

Even for estates that fall outside of this, you may need a grant of probate from the probate registry to release any funds held in the deceased's names. Often banks or other financial institutions will insist that an executor or personal representative clear the deceased's will with the probate registry and get a grant of representation before they provide access to even a small amount of money.

If the estate needs a grant of probate, then your first step is to apply to the probate registry for a grant of representation. There are 11 district probate registries in the UK, as well as the central office in London and 18 smaller sub-registries around the country. In England or Wales, you'll need to fill in a probate application form and an inheritance tax form - even if the estate is worth less than the £325,000 threshold - and send it to the probate office alongside the original will, the death certificate and a fee (generally £40).

When an estate owes inheritance tax, then before you can be awarded probate you'll have to pay some or all of the inheritance tax on the estate within six months of the date of death.

Once the required tax has been paid, you'll be invited to attend an interview at the Probate Registry and swear an oath. Then you'll have to wait for the courts to award you a grant of probate (if the deceased had a valid will) or a letter of administration (if the deceased did not leave a valid will); this will arrive in the post and once it does, you'll have the recognised legal authority to access the deceased's assets. This process will take anywhere between six weeks and four months.

If all of the paperwork is filled in properly, then you'll be sent the grant of probate by post. Once you've paid off all of the inheritance tax, you'll be able to collect in any outstanding debts owed to the estate or access any assets held in the deceased's name. It'll then be your responsibility to pay off any debts owed by the deceased and then, finally, the process of distributing the estate according to the will or the rules of intestacy (where someone died without a will) can begin.
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