Probate explained
Photo by murielle29
Whilst saving money during your lifetime is obviously important, some of the hardest financial decisions need to be made at the hardest times in people’s lives – when a relative or loved-one passes away. Hopefully the following will help you understand the idea of “probate” to make one aspect of this difficult process a little easier.
What is probate?
When someone dies, the people who are responsible for dealing with their estate will often have to apply for a grant of probate. This allows them to have the legal authority to administer the estate of the deceased person. It’s important if you are the executor of someone’s will (or their next of kin if they have died without leaving a will) that you know what probate is.
Simply defined, probate is the right to deal with someone’s estate when they have died. Depending on the circumstances, there are different types of grants of probate (or representation, as it’s also known).
A grant of probate is an order of the Court giving one or more people the legal authority to administer the estate of the deceased in order to distribute it correctly to the beneficiaries.
When people are named in the Grant of Representation they become legally responsible and liable for the administration of the estate of the deceased. Consequently, the decision of who is named for probate is a very important one.
In order for an estate to be administered correctly, there is a series of tax, legal and administrative activities that need to be carried out – collectively these activities are known as probate. All the assets of the deceased have to be accounted for. All their debts and tax liabilities need to be settled. Contact has to be made with several organisations including HMRC, the Courts, and various financial institutions.
Then, the remainder of the estate has to be distributed among the beneficiaries according to the instructions contained in the will of the deceased or, if they died without making a will, according to the Rules of Intestacy.
How long does it take?
The length of time probate takes depends on the individual situation. Usually, though, it’s around six to nine months.
Is probate complicated?
Most people employ a solicitor to help guide them through the process of probate as it can be complicated. The person named in the Grant of Representation is responsible and liable for any mistakes that are made during the process, which is why people often choose to employ a solicitor to deal with the detail. Given the possible liabilities from mistakes, and the difficulty of this process at an already tough time, discussing with a solicitor is often a wise decision.
Is probate always necessary?
In some cases, probate is not required. Examples would be if the estate passes to the surviving spouse or partner and all assets were held in joint names or if the estate doesn’t include shares, land or property. It will still be necessary to contact the bank or building society that holds the money and you may be required to provide a death certificate after the death has been registered.
Generally, it is a lot easier for an executor or the next of kin dealing with someone’s estate to have the help of a solicitor or at least to seek legal advice to decide whether they need to apply for a grant of representation.
In the state I live in, having a will avoids most of probate, which is a good thing. There might be assets you have that you don’t want to go to a certain family member. If it goes to probate, you can’t instruct where it goes, it follows a strict path. It’s not fun to think about our own death, but taking the time to avoid probate by having a will is a smart thing to do.
I’ve heard that the best way to avoid having your assets go through probate is by setting your assets up in a living trust. I would love to set this up someday, though I’ve heard it’s a fair amount of money to do so.
I like the idea of a revocable living trust. It avoids probate and the hassle of conservatorship of your assets. You will still need a will and you must re-title and change beneficiaries of the assets you place in the trust. Of course, life insurance proceeds pass directly to the beneficiary so they avoid probate and do not need to be placed in the trust.
Same as Money Beagle, I have heard if you do the same you can save quite a it of money going to probate.
This is a very helpful explanation of what probate is and means. And I definitely agree that hiring a solicitor is an important step. Probate can in some case be a complicated and arduous process, and without a solicitor it is only more so. Thanks so much for writing!
I didn’t know that probate could take six to nine months. I realize that distributing a deceased’s estate and tying up lose ends can be complicated, but I didn’t realize it could take so long. I can see why most people hire a solicitor to help out with the probate process. Thanks for the article.