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GRANT OF PROBATE & LETTERS OF ADMINISTRATION
'Probate' is a term commonly used when talking about applying for the right to deal with a deceased person's affairs. It's sometimes called 'administering the estate'.
WHAT IS PROBATE?
Dealing with legal and financial paperwork at such an emotional time can be daunting. Even in the simplest estates there is a surprisingly large amount of correspondence with various institutions such as the Inland Revenue, the DWP and The Principal Probate Registry Office.
1. WHERE THERE IS A WILL - it is necessary to obtain a legal document (Grant of Probate) that allows an executor to distribute assets as detailed in a person's Will.
2. IF THERE IS NO WILL (Intestacy) - it is necessary to obtain a legal document (Letters of Administration) that allows the next of kin to distribute assets in accordance with the laws of intestacy. There are specific situations that dictate whether an executor needs to obtain probate.
If there is no Will then the person dealing with the deceased's estate applies to the probate court for a grant of Letters of Administration which gives that person the legal right to deal with the assets.
If there is a will with a named executor then that person may apply to the court for a grant of probate. The person named as executor in a will does not automatically have the authority to begin collecting and distributing the deceased's assets. The executor must first apply to the court and receive a grant of probate. The grant of probate is the document that gives the executor the legal authority to distribute the deceased's assets according to the instructions set forth in the will.
As long as the executor faithfully abides by the specifications set forth by the testator in the terms of the will, there is little that anyone can do to strip the executor of his authority. Should the executor fail to properly perform any of their duties, the proper recourse is to apply to the court to have the executor dismissed. If the court grants the dismissal, someone new is appointed to carry out the testator's wishes. A testator can elect to grant the executor very wide powers. It is not uncommon for a testator to appoint the executor as trustee of the estate and give that person a good deal of discretion in distributing the assets. More than one person can be named as executor.
To receive a grant of probate, the person named as executor must first make an application to the court. The application must include the original will as well as a document that lists and values all of the assets in the deceased's estate. Once the application has been prepared, the executor must then appear before the court and swear an affidavit that details the deceased and their assets. The last step is for the court to seal the grant of probate and vest the executor with the authority necessary to begin carrying out the terms of the will.
Executors are appointed solely by will. If there is no will, there is no executor. Not having a named executor further complicates the probate process for your loved ones. In cases where there is no executor, an interested party applies to the court for Letters of Administration. Typically the interested party is a relative of the deceased and believes they have some claim to the deceased's assets. The person who is granted Letters of Administration carries out duties similar to those performed by an executor.
ADMINISTRATION OF ESTATES
This service involves dealing with your affairs after death. The 'estate' is your property and any other assets you have. Our probate specialists handle the winding up of your estate with great sensitivity and understanding, and help your family and friends through what can be a very confusing and upsetting time.
Administration Involves: Ascertaining the assets and liabilities and preparing the necessary tax forms. Obtaining a Grant of Probate or Letters of Administration, enabling the PR to obtain the assets. Settling the liabilities of the estate, including all tax liabilities. Distributing the estate in accordance with the terms of the will. If there is no will then the estate is distributed according to the statutory rules.
ACTING AS AN EXECUTOR OR ADMINISTRATOR
After a person has died the law insists that someone takes responsibility for all their worldly possessions, and ensures that they are passed to their owners.
There are essentially four things that PRs have to do:
1. Ascertain the value of the deceased's estate. This will include bank and building society accounts, shares, cars, houses, jewellery and furniture for example. Everything that the deceased owned needs to be included, although certain assets pass automatically to others on death.
2. Obtaining authority from the Probate Registry to administer the estate. Unless the estate is very small, organisations will not actually hand over the deceased's assets to the Personal Representative without an official document from the Probate Registry of the High Court, which confirms the PRs are entitled to handle the deceased's affairs. This is usually referred to as a Grant of Probate, if there is a Will. If there is no Will, a grant of Letters of Administrations.
3. Pay any Inheritance Tax due. On death £325,000 is free from tax. After that tax is payable at 40%. Certain categories of beneficiaries do not have to pay IHT, such as spouses and charities, and any gifts made by the deceased within seven years of their death can give rise to an increase in their estates liability for IHT.
4. Distribute the balance of the estate to those who are entitled (the beneficiaries). Once the PRs have received the Grant they can get on with gathering together all of the deceased's assets, paying any outstanding bills, and then distributing the balance in accordance with the deceased's will, if there is one, or in accordance with the rules on intestacy if there was not.
The PRs need to keep a formal account of all the money they have received, paid out and passed on, including interest on any money held since the deceased's death.