Sunset over Baile Mor  

The Probate Process

Before the funeral

Immediately following the death, funeral arrangements will need to be made. In law the executor has the right and duty to dispose of the remains of the dead, although the family will normally do this. The family or executor will also notify the deceased’s relatives and potential beneficiaries of the estate.

Deaths should normally be registered at any register office within five days unless a corner’s report is required. The registrar will need to see the requisite paperwork which will include the medical certificate showing the cause of death; ID (passport and council tax bill), birth certificate, marriage certificate and national insurance number. You can request that all relevant government agencies (HMRC, Council, DVLA , Pensions Agency, Passports Office etc) are informed of the death by the ‘Tell Us Once’ scheme. You will receive a green form that gives permission for burial or cremation. You will also receive a death certificate. It is advisable to obtain a number of copies, as these will be useful in administering the estate.

If there are any dependents or pets you will need to ascertain what arrangements have been put in place to care for them. Such matters may often be referred to in the will.

The assets of the estate must be protected. If the deceased has left a property you will need to notify the insurers that the property is empty.  You may need to turn off and drain the central heating system. You should also organise regular visits to the property to make sure that it remains in good order.

Chattels are the movable property of the deceased and would include things like cars, paintings, clothing, jewellery and household items. If these are within an empty property then valuable items should be removed and placed in storage for safe keeping. When you search the home you should keep a note of the items removed and have a reliable witness to your actions. You will need to notify the insurers of the death and transfer any policies into the names of the executor.

Most importantly you should search for a valid will. You need to ascertain whether the will produced is the last will. Close family members should know where it is. You may need to contact professionals such as solicitors and bankers or the Principal Probate Registry. Will searches could be made to ensure that there are no later wills.

Gathering in the information

You will need to notify commercial organisations of the death. These will include banks, credit card providers, pension providers, utility providers, financial service providers, employers, GP, accountants, solicitors etc. When the death is notified it is usual to send a copy of the death certificate and to request any specific forms to realise the assets when the grant is obtained, see later. You may also request a valuation at the date of death.

The assets and liabilities of the estate need to be identified. This will often involve a detailed search through financial and other records / correspondence to ensure that all property and liabilities in the estate have been identified. This is usually a detailed, forensic process to ensure that a complete and accurate valuation has been made. Written third party confirmations of asset holdings and valuations at the date of death will be obtained at this stage.

Another good source of information are bank statements as these will show regular income and outgoings.

There are also searches available to look for lost bank accounts, premium bonds and pensions.

You should identify memberships and licences that could be cancelled to obtain a refund.

Debts should also be ascertained. These include funeral expenses. Many banks will allow the payment of funeral expenses from an otherwise frozen bank account.

If you have access to the deceased’s computer you could also search favourite websites, emails etc.

You will need to identify the beneficiaries either from the will, or under the intestacy rules if no will has been left.

Valuing the estate

The estate must be valued for inheritance tax (IHT) purposes at the date of death. Professional help may be required at this stage. You need to understand the rules for valuing property (including related property); quoted shares; insurance policies, household and personal goods. Professional valuations may be required for property, unquoted shares and businesses. Various reliefs may be available for qualifying business or agricultural assets.

Once an initial valuation of the estate has been made you need to determine whether the estate is an ‘excepted’ estate. This means that there is no IHT liability because there are insufficient assets chargeable to IHT. If the estate is excepted there is no requirement to deliver an IHT account to HMRC and a simplified form (IHT 205) is submitted instead.

Where the estate does not come within the excepted estate rules an account must be delivered to HMRC using form IHT 400, even if it is believed that the estate will not ultimately give rise to an IHT liability. IHT form 400 and its related forms are more detailed and may require professional advice. Once these have been completed the forms and any valuations are sent off to HMRC. This must be down within twelve months of the date of death otherwise fines are payable.

Obtaining probate

HMRC determine whether any IHT is due. When payment has been received by HMRC or confirmation that no tax is due, HMRC fill in their part of the probate summary (IHT 421) and return it. Any IHT must be paid on return or within six months of the date of death.

The probate accountant prepares the executor’s oath. The oath specifies the applicant’s entitlement to take out the grant and the applicant swears that they will collect in the estate assets and administer the estate. The oath supports the application for a grant and must be sworn before a commissioner for oaths.

The probate summary (IHT 421) is then sent along with the oath, and any other papers necessary to apply for a grant, to the Probate Registry. The Probate Registry will issue the grant within 10 working days.

The grant enables the persons named in it to deal with the deceased’s estate. It allows money to be collected from the bank, property to be sold or transferred and for debts to be paid.

Collecting in the assets

The executor sends off the grant to the asset holders (banks, pension providers, brokers etc). Many asset holders will have forms that must be completed as a part of the process. These will usually have been requested when the asset holders were originally informed of the death.

The executor pays the money into an estate account. When sufficient funds are available the debts are paid off, including funeral expenses and other creditors.  To protect the personal representatives from claims from unknown creditors or beneficiaries, they should also consider placing a statutory notice in the London Gazette and newspapers where the deceased lived and owned property.

Distributing the estate

Once all the estate assets have been realised, liabilities and debts paid, and clearance obtained from HMRC, the personal representatives will be in a position to distribute the estate to the beneficiaries. A personal representative who distributes the estate incorrectly can be held personally liable and is unable to recover distributions made. At this stage any specific or pecuniary legacies are paid to the beneficiaries in accordance with the appropriate form of transfer. In all cases receipts should be obtained from the beneficiaries confirming that they have received them. 

Tax returns and estate accounts

Before finalising the administration the final income tax and capital gains tax liabilities must be agreed with HMRC. Consideration must also be given as to whether any adjustments are required to the IHT account previously submitted to HMRC, for example for any shares or land sold for less than probate value.

The estate accounts should be prepared to show the income received during the administration period; the assets and liabilities; what IHT has been paid and the expenses incurred (such as funeral expenses, professional fees etc). They will also show how the remaining assets have been distributed to the residuary beneficiaries, who will approve the accounts by signing them and acknowledging receipt of the amounts due. 

Finally the executor generally ties up any loose ends and finalises all matters to complete the administration.