Understanding the probate process

Here we set out the typical processes and possible timescales in the administration of an estate.

Understanding the background

If the deceased left a will, there will be one or more designated executors who will “execute” the will. This means that they will share out the estate as specified and deal with any related complications, as well as carry out any other final wishes specified in the will. If there is no executor named or there is no will, someone must become what is known as the “administrator” of the estate; this is usually someone who would benefit from the will or a blood relative if no will exists.

Understanding the process

When someone dies, assets owned solely by the deceased are frozen and the only way these assets can be dealt with is to obtain a grant of probate (in the case of a will) or a grant of letters of administration (where a will has not been prepared and the estate falls under intestacy).
Any joint assets usually pass automatically to the surviving owner and these assets are not normally involved in the probate procedure.

Step 1 - Obtain details of the estate

The first step, if acting for the executor or administrator; is to obtain full details of the estate which will involve writing to the various banks and building societies or other financial institutions. This process can take some time as we are very much in the hands of other organisations and how quickly they respond to our requests.

Step 2 - Make an application for the grant of probate or grant of letters of administration

Once all the information has been obtained, we will be able to make an application for the grant of probate or grant of letters of administration, as the case maybe. If there is inheritance tax to be paid, a tax return called an IHT400 must be completed giving full details of the assets and values. Even if the estate is not  taxable, an IHT205 needs to be completed which is a simpler form but still must state full values.

Step 3 - Pay inheritance tax if due

Inheritance tax will have to be paid before we can apply for a grant of probate or letters of administration and this may require us to write to various financial institutions to see if they will be prepared to release funds to us. As soon as the tax has been paid, an application for grant of probate or letters of administration can then be made.

You will appreciate that the time taken in getting the financial information together depends very much on the size of the estate and the number and type of assets involved. This is why the Inland Revenue allows six months from the date of death to submit the paperwork. It could take up to six months for the Inland Revenue to process the IHT400 to enable us to apply for the grant of probate or letters of administration.The issue of the grant of probate or letters of administration should take between two and three weeks following the application being made.

Step 4 - Financial institutions release funds

Once the grant of probate or letters of administration has been obtained, a certified copy will be forwarded to all the financial institutions and generally this will result in funds being transferred to us for us to hold. In some cases, and subject to the beneficiaries’ instructions, the assets can be transferred to the beneficiaries concerned. This process can take some time particularly if shares are involved and the family does not hold all the relevant share certificates, in which case, indemnity forms need to be completed which will potentially slow down the process.

Step 5 - Finalise the estate and prepare estate accounts

Once all the cash has been obtained, assets sold or transferred, we are then able to finalise the estate and prepare the estate accounts, which are then approved by the executors before funds are distributed to the various beneficiaries.

Sometimes, income tax returns need to be completed during the administration of the estate. As a result, as we have to deal with the Inland Revenue, there can be delays depending on the personal circumstances of the individual estate in question.

During the administration period, we will keep the executors and beneficiaries informed of key developments as and when they occur; for example, when the IHT Form has been submitted to the Inland Revenue, when the application for probate has been made and when probate has been obtained. However, sometimes you may not hear from us for some time. This does not mean that nothing is happening; it means we are either gathering information together prior to applying for the grant of probate or letters of administration or dealing with the various assets once the grant has been received. It is very difficult to give an exact timeframe for the administration of the estate, but we will give executors and beneficiaries our best estimate of the timeframe once we have a full idea of the size of estate and the number and type of assets involved.