What is probate and how does it work?

There’s a lot to cope with when someone close to you dies.

And one of the aspects is dealing with their property, money and other possessions – known as their estate.

Probate may be part of this process and can be complicated to get to grips with. Below, we explain how it works in detail to help you ensure things go smoothly.

Probate is technically the right to handle and share out the estate of someone who has died according to their will. However, it’s often used to mean the whole process of dealing with an estate.

Depending on the circumstances, you may need to apply for this right in order to be able to deal with someone’s estate. Whether you need probate also depends on the financial institutions used by the person who has died, as each one has its own rules.

It’s important to note that there’s a different system in Scotland to the rest of the UK. The process in Northern Ireland is similar to the one in England and Wales but has some differences.

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Probate is typically required when someone passes away and leaves behind assets that need to be distributed to beneficiaries.

If probate is needed, you must apply for it before you can start dealing with the estate, as probate gives you the authority to do so.

To find out whether it’s needed, you need to contact all the financial institutions the person who died used, such as their bank and mortgage lender.

Situations in which probate might not be needed include if the person who died:

• Only had cash and personal belongings

• Only had accounts or owned shares jointly with other people. The money or shares automatically pass to the joint owners unless something else has been agreed

• Owned property as joint tenants with one or more people. The property automatically passes to the surviving owners

• Had a relatively small amount of money

A grant of probate is the legal document you receive once your application for probate has been approved. It gives you the authority to deal with the estate of the person who has died and distribute the assets to the beneficiaries.

You can only apply for a grant of probate if you’re an executor named in the will. An executor is someone who has been appointed by the person who has died to administer their estate. If there’s more than one executor, you all need to agree who will be named on the probate application.

If there’s no will, the will is invalid or there are no executors named or who can act, you can apply to be the administrator of the estate.

You must be the closest relative of the person who has died, such as their spouse or civil partner, or their child (over 18) if they weren’t married or in a civil partnership.

Where there’s no will or executors, probate is known as letters of administration.

The exact process depends on the will, and the assets and parties involved, but as an executor you generally need to go through the following steps first:

1. Find the original will and gather together details of all the assets and debts of the person who has died.

2. Estimate the value of the estate to determine whether there’s inheritance tax to pay on it. You can find out how inheritance tax works and the thresholds that apply on Gov.uk and use the online inheritance tax checker to do this.

3. If inheritance tax is payable, send full details of the estate’s value to HMRC. In some circumstances, you’ll also need to send the details if no inheritance tax is due.

4. Start paying inheritance tax if it’s payable.

5. Apply for probate either online or by post if it’s needed. You’ll normally get the grant of probate (or letters of administration if applicable) within 16 weeks of applying. It could be a lot quicker than this if the situation is straightforward.

Once you receive the grant of probate document, you can start dealing with the estate of the person who has died. You need to do the following:

1. Send copies of the document to financial institutions that hold the assets of the person who has died.

2. Repay any debts they owe, sell any assets if necessary and pay any income tax or capital gains tax due.

3. Distribute what’s left of the estate to the beneficiaries according to the instructions of the will.

4. Prepare the final estate accounts to show the money that went in and out of it and what was distributed to the beneficiaries. These need to be approved and signed by you and the beneficiaries.

The whole process can take up to 12 months but this depends on the complexity of the situation and whether there are any delays along the way.

If the amount of money in the estate is small and all other assets were owned jointly with one or more other people, probate might not be required. However, there’s no set amount as thresholds vary widely depending on the financial institution involved.

For bank and building society accounts thresholds can range from £5,000, which is the limit for National Savings & Investments, for example, to £50,000 in the case of Nationwide, Santander and others.

You need to contact each one individually to find out what threshold applies and whether it requires a grant of probate (or letters of representation) to release the funds to you.

You may be able to get some of the money before you receive the grant of probate to pay for funeral costs, probate fees and inheritance tax.

If you decide to go through the process without the help of a solicitor, you may just pay a fee for making the probate application. It’s £300 for an estate with a value of over £5,000. There’s no fee to pay below this. Extra copies of the grant of probate document cost £1.50 each and if you need to make a second application for the same estate it’s £20.

You can apply for help to pay this fee and any other court fees that apply if you’re on a low income or certain benefits.

There may be other costs depending on the estate. For example, if property is involved you may have to pay estate agent fees if you decide to sell it and insurance to cover it while it’s unoccupied. There’s also inheritance tax to pay. However, most costs can be claimed back from the estate before inheritances are distributed.

While many people go through the probate process without legal advice, it’s worth using a solicitor if the situation is more complex. For example:

• The person who died owned property overseas

• There isn’t enough money in the estate to cover any outstanding debts and other expenses payable

• The will could be disputed

• There are beneficiaries named in the will who are under 18

• There are assets held in trust

The cost of using a probate solicitor depends on the circumstances of the estate and how complex it is. It may be charged as a fixed fee, an hourly rate or a percentage of the estate’s value.

For example, Co-op Legal Services says it would charge a fixed fee of £3,740 plus VAT and disbursements (expenses such as fees and taxes) for a standard estate with one property and six bank accounts. It could cost a lot more than this for a complex or high-value estate.

The cost also depends on how much of the process you want the solicitor to be involved in. They can help you apply for probate only, just deal with the administration of the estate once probate has been granted or work on the whole process. Make sure you know what’s included in a quote when you’re comparing them.

You can find a probate solicitor on the Law Society website.

Do you need probate if there’s a will?

Yes, depending on the value of the estate and the assets involved. Probate specifically means the right to deal with the estate of someone who has died when there’s a will. If there isn’t a will, probate is known as letters of administration.

What is the probate threshold?

You might not need to apply for probate if the estate is small but there isn’t a set value below which it’s not needed. Each financial institution has its own threshold for when it requires you to have a grant of probate to get access to the funds.

What is the difference between probate value and market value?

If a property forms part of the estate its probate value is the amount it was worth at the date of the owner’s death for inheritance tax purposes.

The market value is the amount the property could be sold for based on prices of similar properties in the area but wouldn’t necessarily be the same as the probate value.