February 21, 2024

Do All Estates Require Probate?

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Require Probate

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Understanding Probate

An estate is the sum of a person’s assets including money, properties and any belongings they own. Some people have expensive artwork, family heirlooms and costly jewellery which all need to be factored into an estate’s value. When someone passes away, Grant of Probate gives permission for an executor to handle all financial affairs, from selling property to closing bank accounts and distributing assets to beneficiaries. But do all estates require probate?

The answer to that is no. Here’s a quick overview of the rules.

When Might Probate Not be Needed

If an estate is small, you may not need a Grant of Probate to sort out financial affairs when a loved one dies. The problem is that there’s no set limit as to what quantifies a ‘small’ estate. While some financial institutions don’t require a Grant of Probate for anything below £50,000, for others it’s £5,000. So you need to speak closely with the institution holding the deceased’s assets to find out what rules they operate within. Only then will you know how to legally proceed. Probate issues are notoriously difficult, so don’t hesitate to contact a Kent accountant for probate services for some advice.

Another reason you may not need a Grant of Probate is if the deceased owned absolutely everything jointly with someone else. In this case, asset ownership is simply transferred into the surviving partner’s name. There are complications here too, however. For example, assets need to be owned together as ‘joint tenants’ for them to automatically transfer to the surviving owner. So, if your husband dies and you’re joint tenants of a property, it’ll be transferred into your name without issue. If you’re listed as ‘tenants in common’, however, his share will not automatically pass to you. Instead, it’ll pass to whoever is legally entitled to inherit under his Will. If no Will is present, intestacy rules will kick in, which layout a specific order of inheritance.

For the above reasons, it’s really important to review your asset ownership to ensure you’re happy with how things will be resolved should you die.

When Probate is Needed

In the vast majority of cases, a Grant of Probate is needed. This is particularly true if the estate goes above the financial threshold of a financial institution. Balances between £5,000 and £50,000 are typically considered large enough for probate to be requested.

Probate will also be required before the sale or transfer of property/land if it was solely owned by the deceased. This is because there’s no ‘joint tenant’ situation and therefore the Will executor will be required to instruct issues of inheritance where necessary. Again, if no Will is present, intestacy rules will kick in to distribute the deceased’s property.

Furthermore, you’ll need a Grant of Probate to handle investments or shares as the provider will need to see a Grant before handing over assets – unless the estate is small. Kent tax advisors can help you understand the more complex issues.

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