The legal complexities and loopholes of death management are confusing. At Life Ledger, we understand why families often feel overwhelmed by the sheer number of things to sort out.
When facing the death management process for the first time, it’s easy to get the legal jargon mixed up. Different terms and processes can feel difficult to distinguish, with probate and estate administration being two of the most commonly confused.
Although both terms are associated with the same process – the management of the estate and assets – they have distinct requirements and processes. Below, we’ll break down their differences in more detail.
What is probate and when do you need it?
Probate is the legal document that needs to be obtained by the Executor(s), in order to give them the authority to administer an estate. This is particularly important if assets and the estate were solely owned by the deceased, as these cannot be administered without the authority granted through Probate.
However, probate is only required if the deceased left a will. If there is no will, then the Administrator(s), whose role is the same as an Executor, will need to apply for ‘Letters of Administration’.
Probate is also commonly referred to as the ‘Grant of Probate’ or ‘Grant of Representation’. In Scotland, it is also known as ‘Confirmation’.
The two main instances where The Grant of Probate is required are: if the deceased owned a property in their sole name, or if a financial institution (such as a bank, building society or share registrar) requires Probate to release the deceased’s funds. In the latter instance, this is usually because the balance of the deceased’s account was above a certain threshold, as set by the bank. Each financial institution has its own threshold, and these may vary considerably between organisations.
Probate is not usually required if assets, such as property, bank accounts, or shares, are in joint names. These assets will pass automatically to a surviving partner, unless other arrangements have been specified in the will.
What are the steps required to get a Grant of Probate?
- Complete the probate application form
In England and Wales, the probate application form requires you to complete a PA1P (if there is a will) or a PA1A (if there is no will).
You will also be required to submit an Inheritance Tax form to HMRC.
In Scotland, you will need to submit a C1. You may also need to complete other forms, including C5, C5SE or IHT 400, depending on the nature and extent of the deceased’s estate.
- Submit the application to the probate registry
Once these forms have been completed, the application form and a certified copy of the death certificate need to be sent to the probate registry.
For the Grant of Probate application, the government has established a set fee of £215. However, this is only applicable to estates with a value of £5,000 or over. If the estate is valued under £5,000, there will be no fee for the application.
After it has been submitted, your application will take between 6-8 weeks to be processed and approved. Currently, however, the ongoing COVID-19 pandemic has caused considerable delays. As such, the GOV.UK website recommends that individuals “make online applications rather than paper applications, if possible.”
Alternatively, you may also apply for probate online. To do this, you will need to have copies of both the original will and the Death Certificate and must have already reported the value of the estate.
What is estate administration and when is it needed?
Estate administration is the process of legally dealing with a person’s affairs after they have passed away. We will outline the points to be considered during estate administration in more detail below.
Unlike probate, estate administration is required after every death, regardless of whether the deceased left a will. What’s more, the estate administration process can either be completed by a relative or a solicitor.
If the deceased passed away without a will, then the estate is declared intestate, meaning the assets will be distributed in line with the rules of intestacy, rather than the family’s wishes.
How do you administer an estate?
If you are an Executor as named in a will, or act as the Administrator (if there is no will), you will need to gather all relevant information about the deceased and their estate.
Then, if there is a will, you will need to apply for the Grant of Probate. Once probate has been granted and you have the legal authority to do so, you can begin to manage the estate and close any outstanding accounts.
If there is no will, or the deceased’s accounts and estate are shared under your name, then you do not need to apply for probate to begin estate administration.
These are some of the tasks that you may need to complete when administering an estate:
- Closing bank accounts
- Paying debts
- Dealing with shares and investments
- Redirecting post
- Selling property and assets
- Dealing with Inheritance Tax forms
- Completing Income Tax submissions
- Dealing with Capital Gains Tax
- Contacting everyone who is due to inherit
- Producing estate accounts
Every estate is unique, and so the process of estate administration will vary between two different estates. This means that the process can be complex, time-consuming and stressful.
Furthermore, it is important to note that the Executor(s) or Administrator(s) are personally liable for any mistakes made during the process of estate administration.
For these reasons, families often choose a solicitor to advise them throughout the process, or to conduct it on their behalf.
What are the differences between probate and estate administration?
Probate provides the Executor(s) or Administrator(s) with the legal right to carry out the estate administration. Therefore, probate is just one part of the wider estate administration process that provides you with the authority to deal with property, money, and personal possessions.
As mentioned above, probate is not always essential when the bereaved are dealing with their loved one’s estate. However, estate administration is a legal requirement, no matter the size or complexity of the deceased’s estate.