Will issues arise if probate isn't applied for?

CLawrenzo

Hi all,  someone i know passed away over 4 years ago now. They had 2 direct beneficiaries, both of which are joint executors of the Will. The singular  house they owned, in which they lived, is worth in the region of £450,000, with the rest of the estate unknown  (assume not loads on top).
Probate has not been applied for, even at this point. One of the beneficiaries lives in the house and, i believe, has (certainly had) access to any bank accounts associated with the estate. The other beneficiary seems worried about causing issues with the former by starting the process, even though they are joint executor too. Does anyone know of any repercussions that both may/will face as a result of this situation? Thanks

p00hsticks

for a start, they won't be able to sell the house at any point in the future until they have probate....

km1500

one thing that springs to.mind is have they paid any inheritance tax due (it has to be paid within 6 months of death I believe)?

Keep_pedalling

Just to clarify did the deceased and the two beneficiaries jointly own the house? If that is the case then probate is not required for that part of the estate, and if they owned as joint tenants rather than tenants in common then ownership passed to the surviving owners by survivorship, 

Hoenir

The one certainty might well be is that the longer this continues. The greater the headache it's going to be for someone in the future to unravel. 

CLawrenzo

Thanks all for replies. No inheritance tax has been paid. The whole thing has been swept under the carpet, whether that is for emotional reasons or whatever.. as far as I'm aware, nothing has even been looked at at all.

The deceased owned the house fully, with one beneficiary living in the house (not on any deeds or paperwork) with the other living elsewhere. The Will was as straightforward as they come, to split everything 50/50 with the two beneficiaries, but they have just left things as they are

Keep_pedalling

Was the deceased widowed? Are any of the beneficiaries children of the deceased?

If the answer to both is no then IHT is due and there will be significant penalties to pay. 

Flugelhorn

the non resident executor could start the process - the sooner the better, particularly as IHT is an issue

Grumpy_chap

CLawrenzo said:

Hi all,  someone i know passed away over 4 years ago now. They had 2 direct beneficiaries, both of which are joint executors of the Will. The singular  house they owned, in which they lived, is worth in the region of £450,000, with the rest of the estate unknown  (assume not loads on top).
Probate has not been applied for, even at this point. One of the beneficiaries lives in the house and, i believe, has (certainly had) access to any bank accounts associated with the estate. The other beneficiary seems worried about causing issues with the former by starting the process, even though they are joint executor too. Does anyone know of any repercussions that both may/will face as a result of this situation? Thanks

This needs to be sorted and delay won't make it easier.
There may be penalties and interest arising from IHT.
There is likely a CGT liability accruing for someone.

RAS

If the deceased was the parent of the beneficiaries, and widowed, then no IHT is likely to be due. If single or divorced, the executors both need to know the value of the accounts as IHT might be due, and they need to apply for the residential allowance.

And the non-resident needs to be aware that they personally are accruing a CGT liability that will  almost certainly increase over time. That doesn't affect the resident.

CLawrenzo

The deceased was widowed. Both beneficiaries children.

Any ideas why  the resident wouldn't be accuring debt/fine but the non resident would? 

So long and short of it is, the two beneficiaries need to get this sorted ASAP to avoid any further issues. As I would have assumed would have been the most logical thing to do from the outset..!