What is a grant of representation?
This is the court order authorising the personal representatives to deal with the administration of the estate. Where the deceased left a will the grant of representation is known as a grant of probate and where the deceased died intestate (did not leave a will) the grant of representation is known as a grant of letters of administration.
How long does it take to get probate/administer an estate?
This will depend on a number of factors such as whether the estate is subject to inheritance tax, whether there is a property to be sold and whether there are any foreign assets. The majority of estates can be administered within 6-12 months. The time required to obtain the grant of representation will often depend on responses from banks, life insurance companies and other financial institutions. Once the application has been submitted to the Probate Registry, the grant of representation is usually issued within 2 to 3 weeks.
What are the duties of a personal representative of an estate?
Where the deceased left a will then the personal representative is called the executor. Where the deceased dies intestate, the personal representative is called the administrator. The personal representatives are responsible for collecting the assets of the deceased, paying any liabilities and distributing the estate to the correct beneficiaries.
Who can act as a personal representative when there is no will?
When the deceased died without leaving a will there is an order of classes of people who can act as an administrator. The order is as follows:
- The surviving husband or wife of the deceased.
- The children of the deceased (and the children of a child who has predeceased).
- The parents of the deceased.
- The brothers and sisters of the whole blood of the deceased (and the children of any brothers and sisters who have predeceased)
- The grandparents of the deceased
- Uncles and aunts of the whole blood (and the children of any who have predeceased)
- Uncles and aunts of the half blood (and the children of any who have predeceased).
What happens if I do not want to act as a personal representative?
You do not have to act as a personal representative if you do not want to. You can renounce your position as personal representative by signing a deed of renunciation. The renunciation is not final until it is filed at the probate registry and it can only be retracted with consent of the court. If you are appointed as an executor under a will and do not want to give up your right to probate altogether, then you can have power reserved which means that you do not take probate out in your name, but it does not prevent you from acting in the future if you want to.
If you are not planning to act as a personal representative then you should not do anything in connection with the administration of the estate such as collecting the in the assets or paying the debts, though you can arrange the funeral.
Can a personal representative appoint someone else to act on their behalf?
A personal representative can appoint someone else to act on their behalf by signing a power of attorney. The power of attorney must be specifically for dealing with the administration of the estate or be a lasting power of attorney, it cannot be a general power of attorney or enduring power of attorney.
What does an application for a grant of representation involve?
The application for a grant or representation is made by post or online and it is not necessary to attend the registry or court itself. Once the probate registry receives the application it will examine the will to check that the will is valid. It will also examine the application papers to check that the names and addresses of the personal representatives and the deceased are correct. It will check that no caveat has been registered against the estate, which is a procedure to stop issue of a grant of representation where there is a potential dispute over an estate. Once they are satisfied that the papers are in order the probate registry will issue the grant of representation.
Will the will become public?
Once the grant of representation has been issued, the will becomes a public document and anyone can obtain a copy from the probate registry.
Does inheritance tax have to be paid before probate?
In order to obtain a grant of representation it is necessary to pay the inheritance tax (IHT) due and to deliver a formal receipt from HMRC with the application for a grant of representation. Where estate assets consist of land or business property, IHT on those assets can be paid by ten yearly instalments if there is not enough cash in the estate to pay it straight away. Interest becomes payable on any outstanding inheritance tax six months after the end of the month in which the death occurs.
Banks and building societies will often allow funds to be released to pay IHT before the grant of representation has been obtained. If there are insufficient funds in a bank or building society account to cover the inheritance liability it may be necessary for the executors to raise funds separately to pay the IHT liability.
Where estate assets consist of land or business property, IHT on those assets can be paid by ten yearly instalments with interest payable on the outstanding balance.
How soon after obtaining the grant of representation can the estate be finalised?
As soon as the grant of representation has been obtained the assets can be cashed in, sold or transferred. In addition the income tax position to the date of death needs to be settled. If the estate is subject to IHT or potentially subject to tax, it is necessary to obtain formal clearance from HMRC. Once clearance has been obtained, all assets have been dealt with and legacies paid, provided there are no claims on the estate, estate accounts can be prepared and the estate assets distributed.
How accurate does the information in the IHT forms/Inland Revenue account have to be?
You need to give accurate information on the HMRC forms. If an IHT205 is being completed, it is possible to include estimated values. If you are completing an IHT400, you are required to give accurate information. If HMRC consider that you have not taken appropriate steps to establish the correct value of the estate assets, you may be liable to penalties which are payable by you personally rather than by the estate.
HMRC will also expect you to examine the deceased’s bank accounts, make enquiries of beneficiaries and examine the deceased’s income tax returns to establish whether any gifts were made by the deceased.
HMRC will often make further enquiries and require copy bank statements to be produced. The deceased’s income tax records will also be cross referenced to establish whether there are any further assets belonging to the deceased.
Should I wait before distributing the estate assets?
If anybody wants to make a claim against the estate for reasonable financial provision under the Inheritance (Provision for Family & Dependents) Act 1975, an application has to be made within 6 months of the date of the grant or representation. In certain circumstances, an application can be made out of time with the leave of the court. Therefore if you wish to ensure that you do not distribute the estate without the risk of a subsequent claim being made, you may want to delay the final distribution until 6 months has expired from the date of the grant of representation.
What if additional assets are discovered after the assets have been distributed?
Occasionally further assets come to light. It will be necessary to provide the relevant bank, building society or financial institution with the grant of representation.
If the estate is taxable or will be taxable taking in to account the new asset, it is your legal duty to advise HMRC and pay any additional inheritance tax together with any interest.
Once the estate has been distributed, is a personal representative protected if an estate liability is discovered?
If the personal representatives have placed statutory advertisements (an advert in the London Gazette and a local newspaper), provided no new liabilities or creditors come forward, the personal representatives will not be liable to pay the additional liability however the creditor is entitled to recover payment from the residuary beneficiaries. If statutory adverts are not placed, then the personal representatives are liable to pay any liabilities from the estate assets whether they have distributed the estate assets or not.