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A brief guide to probate issues
Probate refers to the process of applying to manage the estate of someone who has died. This management involves collecting the assets of a deceased person, ensuring their debts and taxes are paid off and, finally, making sure remaining assets are distributed to the beneficiaries of the estate.
It can be quite a complicated and time-consuming process but Co-Operative probate advice can help guide you through the legal maze and avoid any potential pitfalls. So, what do you need to know about probate and the potential issues before you get started?
When is probate required?
Probate is usually required when property is held in the sole name of the deceased or as tenants in common. This is when both parts of a couple, or any other joint homeowners, hold set shares of a house – whether half each or any other percentage. The more usual arrangement for couples is to own a property as joint tenants. In this case ownership of the house automatically passes to the survivor.
Probate may also be required if the deceased benefited from a trust or held assets worth of at least £5,000 with financial institutions. Some banks and other institutions may have a higher threshold than this so it is usually worth checking with the institutions individually.
Who sorts out probate?
When a person dies, someone has to deal with their financial affairs and associated issues. This is known as administering the estate and is undertaken by an executor or personal representative. If the person who died left a Will, the document names executors who can apply for a grant of probate to handle the estate.
If the deceased died intestate (without a valid Will) the situation is a little more complex. A grant known as letters of administration must be issued instead, allowing a personal representative to take charge of affairs.
Details of all the dead person's assets, including property, savings accounts and shares must be gathered by those handling the estate and liabilities such as mortgages and other debts must be deducted to work out how much the estate is actually worth. Inheritance tax must also be paid if applicable and the estate must be divided between the beneficiaries as outlined by the Will or the rules of intestacy.
Many people prefer to let experts handle probate and issues regarding estate administration. It is possible to do all this yourself but it can be a complex and stressful process so it's worth seeking professional help. It should also be noted that executors are liable for any miscalculations or errors. If you fail to report and pay tax, or miss out a beneficiary, you could end up having to rectify your mistake out of your own pocket.