Probate - Is It Necessary?

courtenay62

I am trying to assist my executors, who wish to DIY my estate in the event of my death. My circumstances are: I’m married, our home is held in Tenants in Common but because of my previous divorce I wish to leave my half of the property (house total value – around £800k)  in trust to my 2 children.  Apart from the house I have savings and investments of around £300k, which will be divided 3 ways on my death.  This is reflected in my Will.  As things stand today, and using the applicable IHT allowances, I believe there will be no IHT to pay assuming I die first.

My problem is to fully understand whether or not grant of probate will be needed.  As I see it applying for Probate is relatively complex, time consuming and expensive activity, which I’m sure my executors would rather not have to undertake.  I’d originally thought that probate simply depended on some  specific factor, eg property owner, value of investments, etc.  But it seems it is an arbitary requirement, which some banks and financial institutions demand before releasing funds, and others don’t.  Furthermore, some say they “may” require grant of probate, for example NS&I say this if holdings are greater than £5k.  But why may, what other factor is being applied?

I do wonder if the Applicant themselves are taken into consideration.  I wonder if a Solicitor handling the Estate is given more credibility than, say, a layperson individual or executor would be – is there any evidence of this?

FabFifty

'applying for Probate is relatively complex, time consuming and expensive activity' - in my experience it's neither complex, time consuming or expensive. I've just done this for my father's estate and it was relatively easy. Some banks asked for probate, some didn't - just depended how much was with each provider. The local authority asked for Grant of Probate to pay back £200 rates, whereas Premium Bonds sent me a cheque for just under £500. Solicitor wanted to see Grant of Pobate for selling the house, so did the Estate Agent.

Billxx

I concur with FabFifty.  I've done two probate applications and yes it takes a little time but it is not that difficult.  I am pretty sure if there is property involved the executors will need a Grant of Probate.  I've never come across any evidence that suggested my applications were considered to be less credible than a solicitors.

Keep_pedalling

With savings of £300k probate is almost certainly going to be needed, but it is a fairly simple process so nothing to be concerned.

On the presumption that we are talking about your will setting up an immediate post death interest trust then probate won’t be needed for the house as your with will retain beneficial ownership just the larger liquid assets. 

Flugelhorn

I think probate is straightforward provided there are really good records - that is the way in which you can help executors. 

courtenay62

Well, when I did a 'dummy' PA1P I found it tricky completing Sections 7.3, 4 and 5.  I had done the Gov UK IHT Checker first and used values from the Checker last page for the PA1P section 7.  My point is that NOT having to  apply for probate would make the whole process easier, quicker and saves £300 for my executors!

I was hoping to get answers to my 2nd and 3rd paragraphs.  Why do some (but not all) institutions ask for Probate?  Why do they say they "may" want it, implying that it may not be necessary?

And my question about going DIY, as opposed to paying a Solicitor - is it possible the former way negatively influences the institutions, giving rise to a Probate demand?

RAS

The biggest factors in processing probate seem to be that on-line applications are processed much more rapidly than paper ones, some reporting a turn round within a week for on-line applications.

IHT delays both because the executor/administrator needs to get the certificate from the HMRC. but based on current rules your estate would not be liable.

Good paperwork, a least a list of accounts and contact details, and a joint account that at least covers living costs for your spouse all help reduce pressure. Make sure any pension or insurance nominations are sorted and get a STEP solicitor to discuss and write the terms of the Immediate Post Death Interest trust, assuming that is your intention.

You really do need to sort out LPAs, both health and welfare and financial, as deputyship can take 18 months.

RedImp_2

courtenay62 said:

Well, when I did a 'dummy' PA1P I found it tricky completing Sections 7.3, 4 and 5.  I had done the Gov UK IHT Checker first and used values from the Checker last page for the PA1P section 7.  My point is that NOT having to  apply for probate would make the whole process easier, quicker and saves £300 for my executors!

I was hoping to get answers to my 2nd and 3rd paragraphs.  Why do some (but not all) institutions ask for Probate?  Why do they say they "may" want it, implying that it may not be necessary?

And my question about going DIY, as opposed to paying a Solicitor - is it possible the former way negatively influences the institutions, giving rise to a Probate demand?

I only have experience of doing this once but if you have probate can’t see why it makes any difference to the institution who applied for it.
It’s quite hard for someone to definitively answer your question as by definition they only have experience of one way and therefore difficult to compare.

RAS

Should add that if you go to a solicitor, they will insist on giving other potential beneficiaries and debtors 6 months to apply, so pay out are delayed.

And of course if the executors find difficulties with a particular issue, they can always get legal advice on that specific issue for a small fee.

Keep_pedalling

courtenay62 said:

Well, when I did a 'dummy' PA1P I found it tricky completing Sections 7.3, 4 and 5.  I had done the Gov UK IHT Checker first and used values from the Checker last page for the PA1P section 7.  My point is that NOT having to  apply for probate would make the whole process easier, quicker and saves £300 for my executors!

I was hoping to get answers to my 2nd and 3rd paragraphs.  Why do some (but not all) institutions ask for Probate?  Why do they say they "may" want it, implying that it may not be necessary?

And my question about going DIY, as opposed to paying a Solicitor - is it possible the former way negatively influences the institutions, giving rise to a Probate demand?

The only way to avoid probate if you are the first to die, is to transfer all your liquid assets across multiple financial institutions at levels below the amounts they will release without probate, but this is actually going to increase the amount of work your executor will have to do. Assets such as lS&Ss ISAs are going to cost you a lot more than the probate fee with all the additional charges you will encounter holding them in multiple ISAs

I can’t see anything tricky in section 3, for section 4 you can leave your executors your executors details of your family with a copy of your will and section 5 will only be needed if someone has to act as an attorney for an executor, so unlikely to be needed. 

Section 7 can be tricky but it is not going to be difficult where no IHT return is needed. 

We do encourage people who come here to DIY probate applications rather than employ a solicitor to do it. We also encourage people to tackle the more complex IHT application if needed. Both these things are perfectly manageable for most people unless you have a complex estate which does not seem to be the case with you.

All institutions set their own levels of money they will release without probate, that could be as low as £5k or 10 times that amount, but I would not base any of my investment decisions on that. We have both simplified our assets to keep the number of financial institutions to a minimum, what’s resulted in have a single S&S ISA each holding the bulk of our savings with emergency cash funds held in a single savings account and individual premium bonds. 

Which ever of us dies first probate is going to be required (unless we have spent several £100k on care costs first, but avoiding it just makes no financial sense. 

One other point to make is that on the second death the need for both probate and an IHT is almost certainly going to be needing, so doing a probate application on the first death is good practice for the inevitable second death, and it is useful for the executors of the second to have probate records for the first especially if the deaths are many years apart.

NittyGritty

what ever you do, dont use a solictor to get a probate , i had one ask for over a grand for simply getting a probate, in the end i did it online myself for £300, its easier than i thought it would be, it took around a few weeks if that if i remember rightly