In this blog we look at what you need to know when working out what is probate.
So what is probate?
Managing probate, as the legal process is known, can be complex. If one of your close relatives passes away, it could mean that you stand to inherit their property. Or at least a share in it.
Ultimately it does depend on what the deceased person has stated in their will. This is a legal document which sets out how the person wishes their property to be distributed when they die.
The will (which can be called a testament) also names one person or more who are known as the executor(s). They will manage the estate until everything of value has been distributed.
Inheriting a house or flat has its benefits, particularly as it could mean another asset for you. Having responsibility for a second house is quite a lot to think about especially if you already own a home.
Before you can take on the new property (or whoever has been trusted to do this) you will need to “apply for probate.”
Probate gives someone the legal right to deal with someone’s property, money and possessions – known as their ‘estate’.
When probate doesn’t apply
You will not need to go through this process if the person who died was a joint landowner, or jointly owned property, shares or money. These assets will automatically pass to the surviving beneficiaries.
Nor is probate needed if the deceased person only had savings or Premium Bonds. The government has published a guide to handling probate on its website, which can be found here.
The person with the right to probate will need to contact banks or mortgage lenders to find out how to gain access to the assets of the person who died. There are different rules in each case.
How much might probate cost me?
With legal matters it is often best to turn to a solicitor or legal specialist. However, lawyers can be costly.
The Money Advice Service GB says while in some situations it is wise to seek expert advice, it is common for relatives and friends to do the work of the executor themselves. By doing this, they can often save thousands of pounds.
The advice service recommends contacting an expert in some circumstances. These include where the estate is valued at over the Inheritance Tax Threshold, is still earning a regular income or where complex taxes are owed. Also, if the deceased died without a will and their estate is a complex one to administer. Legal expertise may also be useful if there are question marks about the will. And when dependents (such as relatives) have been deliberately left out of the will.
It this case, these people may want to claim money they feel is owed to them from the estate.
How does probate work?
Put simply, the executor or next of kin is required to complete several tasks, if they decide to deal with probate themselves instead of using a lawyer.
They need to gather together any assets of the deceased, which are likely to include property, savings and other banks accounts. There may also be shares and other investments.
The executor needs to pay bills that are outstanding and then distribute what is left in the estate, as set out by the will.
More advice on dealing with someone’s estate when they die can be found on the Money Advice Service website.
Should I seek legal advice?
We recommend you seek legal advice if you need to sell a property that you have inherited. This may save you time and money. There is also a tax implication when you inherit property, in terms of Inheritance Tax. If a person’s estate is worth more than £325,000, then you will need to pay inheritance tax. The government has advice on this kind of tax and when you need to pay tax when selling property, on the HMRC website.
Lawyers can help with advice on Inheritance Tax and other questions besides.
Probate can be a complex issue depending on individual family circumstance. Be sure to take sound legal advice before proceeding.
Has this post left you with questions? If so, you may want to read our detailed guide to inheriting a house.
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