Do I need (help with obtaining) probate? And what else should I consider?

When a friend or loved one dies, and after the funeral and grieving time, a general (but important) question may be: what (if anything) do I do next? Is probate required?

Everybody’s affairs and estate is different; individual to them. Whilst there is no single, catch-all process for dealing with matters post death, there are similar steps that need to be followed in all cases, some more straightforward than others. Whilst some are as simple as, say, telling a utility company that someone has passed away, others are more time-consuming and technical. It depends on what the estate in question comprises.

What are the key steps of dealing with an estate?

After the funeral, the next major step is establishing whether anything actually needs to be done, legally and/or practically speaking.

• Did the person leave a will? If so, it is advisable for the executors to review and familiarise themselves with the terms set out therein. If they didn’t, things can be less clear cut and some advice may be required as to what to do next and who exactly is entitled to do it.
• Has the person left assets – e.g. money/property – in their own name? This includes (although isn’t limited to) cash in the bank; buildings; shares; investments; life insurance policies. If so, these need to be valued.
• Are all of the assets in the UK? Indeed, did the person habitually live in the UK for all of their life? Bank accounts, investments, or property overseas can naturally bring about complexities. So can someone having lived outside the UK for a length of time – a factor that could affect their domicile status (‘domicile’ is a complicated concept, and relates, although is not restricted, to permanent country of residence).
• Are there any debts? Just like assets, these need to be valued as well and offset against the capital in the estate. It is important to establish as quickly as possible whether the estate looks to be insolvent (i.e. outweighed by debt). If it is, or looks likely to be, the executors may need advice on whether they consider not getting legally involved in the estate.
• Once assets are valued, a grant of representation (‘probate’) may be required in order to sell/realise some, or all of the assets. Whether this is needed or not can vary, depending on the situation. Some assets need a grant and nothing less; others don’t.
• Taxes might also be an issue. For instance, does the estate have income/interest producing assets that might be liable for income tax? Will assets be sold for more than their probate (date-of-death) value(s), giving rise to a capital gains tax liability? Is the estate itself large enough to be liable for inheritance tax? There are thresholds, allowances and reliefs to consider here, and legal advice can often prove invaluable.
• When all of the above has been finalised, all money accounted for, and all debts paid, the issue that remains is what happens to it? This can vary wildly depending on whether the person left a will (and how simple/complex the provisions in that will are), or not. In the latter case, the ‘residue’ of an estate – that is, what remains after debts/taxes/etc. – falls to be divided amongst the person’s closest relatives. Depending on the situation, this has the scope to be very simple, or, conversely very complicated!

Do I need help from legal advisers?

Potentially. As indicated above, it really depends on the situation. Even in the simplest estates, there can be quirks – e.g. a lost, or damaged will – that create problems whose solutions may not be readily accessible without professional guidance.

Imagine a straightforward-seeming case that may have complications lurking. Jason has died, and his nephew, Donovan is the executor of his will. His estate is simple in constitution: his fairly new Honda Jazz; a current account holding circa £2,500; and a savings account worth around £16,000. A grant may not even be needed to call the money in. However, there is a potential complexity: two years ago, Jason transferred his house (worth in excess of £500,000) to his other nephew, Derulo, as a gift and with the thinking that it might come in useful if he ever went into care. He has never moved out and it has remained his home ever since. Suddenly, things might not be looking so simple: the gift might need to be reported to HM Revenue & Customs and taken into account for inheritance tax purposes. It may be wise for Jason’s children to seek legal advice on the position here.

The point is, whilst an estate’s size and make-up on the surface may be a good indicator of how complex they will be to administer, smaller ones are not necessarily simple; nor are larger ones necessarily vastly complicated. The above hypothetical scenario is just one of a myriad of potential complications that could arise from something that initially appears straightforward.

If in any doubt as to what to do when someone has passed away, seek the advice of a professional who will be able to steer you in the right direction. Blake Morgan’s Wills team can assist with all aspects of estates, from obtaining a grant to the full administration from outset to closure.