PROBATE: What is it and do I need it?
What is probate?
The term “Probate” refers to the legal process of dealing with someone’s property, money and personal possessions when they have died. These are referred to as the individual’s “estate.”
Someone must be responsible for:
- Informing everyone that the person has passed away
- Gathering in the money and other possessions that the person had
- Paying any debts and liabilities
- Distributing what is left in accordance with the person’s will
If the person did not leave a will they must be distributed in accordance with a set of rules laid down by law called the intestacy provisions.
In order to enable you to deal with the estate you must obtain a grant of representation. This is the document that authorises you to gather in the money from the banks and other financial institutions, sell or transfer property and distribute personal possessions.
If the person left a will then this details who the “executors” are. These are the people in charge of carrying out the persons wishes in accordance with their will and they apply for a “Grant of Probate.” If the person did not leave a will then the law sets out who can deal with the person’s estate and who receives the money from the estate. In this case you will need to apply for Letters of Administration”.
Do I need it?
Not everyone will need to apply for a grant of probate or letters of administration.
If the person who died owned a property jointly with another person (such as their spouse or civil partner) as “joint tenants” then that property passes automatically to the co-owner when the person dies. Similarly, if their money was held in a joint account with another person this will pass automatically to the other account holder when they die without the need for a grant of probate.
In addition, many banks and building societies will release money in bank accounts if the amounts held are small. Each bank and institution has their own limits for the amount they will release but it is usually between £5,000 up to £50,000. You would need to contact each one to find out their individual limit.
Warning!
Inheritance tax may still be payable even if the assets pass automatically to another joint owner if they are not the person’s spouse or civil partner.
