Insights

Not something we like to think about, but when someone in your family dies, there are a lot of administrative tasks involved. The most important of these is applying for the legal right to deal with the deceased’s property, money and possessions (their ‘estate’), which is called ‘applying for probate’.

There are two alternatives here.  If the person left a will, you’ll need to get a ‘grant of probate’. If the person did not leave a will, you’ll apply for ‘letters of administration’. You apply for both in the same way.

Probate or letters of administration?

It can be complicated to obtain probate or letters of administration and there are a number of things that need to be completed beforehand. Typically, the whole process can take up to 6 months and we generally recommend that during this time, the family or individuals involved do not start distributing any assets.

Firstly, it will be important to identify exactly what types of assets are involved and to collect details of everything in order to value the estate for inheritance tax purposes. That can be difficult. If it’s just a few bank accounts for which paper records are available, it’s relatively straightforward to write to each asset holder (for example a bank or building society) and inform them. They will confirm the balance held on the date of death and also whether there is any accrued interest. They will also confirm whether you’ll need probate to get access to the assets.

Obtaining all the necessary information can be a time-consuming process and to further complicate matters, these days the information may only be held online. In these circumstances, it’s possible to access a website to trace investment records, using MyLostAccount.org.

There may also be share dealing accounts, life insurance policies, pensions and lump sums due from pensions. The deceased may also have a state pension and the chances they will have received the correct amount right up until the date of death are minimal – they will either have had too much or not enough. Rectifying this can be a slow process and involves writing to the individual institutions. It takes time and patience to sort it all out.

If property is involved, an up to date valuation will be required and whilst it may be possible to exchange on a sale of the property it may not be possible to complete until probate has been obtained.

How can we help?

RJP LLP is licensed by the Institute of Chartered Accountants in England and Wales to offer a full probate service for clients. This includes:

• Preparing estate accounts;
• Calculating the tax position to the date of death and for the period of administration of the estate;
• Preparing inheritance tax calculations and submitting inheritance tax returns;
• Agreeing the inheritance tax liability with HMRC;
• Obtaining Grant of Probate or Letters of Administration;
• Distributing estate assets.

By administering the complex inheritance tax paperwork and the probate paperwork on your behalf, the entire procedure can be dealt with by one professional. Apart from making things easier for you, it means a notoriously long-winded process can be completed more quickly, which also saves costs.

In summary: the steps you need to follow

1. Check if there’s a will or not as this affects whether you apply for probate or letters of administration. They are slightly different but essentially result in the same thing – the ability to distribute the deceased’s estate.
2. Value the estate after receiving accurate confirmation of account balances and asset values. Report this to HMRC on the appropriate returns.
3. Pay any Inheritance Tax that’s due.
4. Apply for probate or letters of administration.
5. Once received, collect in the estate assets.
6. Pay off any debts, for example unpaid utilities bills and personal tax to the date of death.
7. Keep a record (‘estate accounts’) of how any property, money or possessions will be split.
8. Distribute the net estate (‘distribute the assets’) to the beneficiaries in accordance with the terms of the will.

There are situations where grant of probate is not necessary and it’s helpful to have an independent expert to talk to first and ascertain whether this is the case. Get in touch if you’d like further information.