Probate: The Basics

When someone dies, their property and assets must be collected in and distributed in accordance with the terms of the deceased’s will, or under the statutory rules of intestacy if there is no valid will. All estate debts must first be paid off before the net estate can be distributed among the beneficiaries.

The deceased’s personal representatives (PRs) are responsible for the administration of the estate. Unless the estate is classed as a ‘small estate’ (ie, less than £5,000), a grant of representation must usually be obtained from the court before the administration of the estate can be undertaken by the Prs.

There are three grants of representation:

• A grant of probate (where there is a will);
• Letters of administration where there is no will; or
• Letters of administration with a will annexed (where there is a will but no executors appointed, or willing and able to act).

The application to the court for the grant is made by the executors appointed in the will or, in the absence of a will by one or more individuals seeking to deal with estate. Those entitled to apply where there is no will are the surviving spouse, then the deceased’s children and if none are surviving, then any grandchildren of the deceased.

The application to court must be accompanied by the appropriate “oath”, which includes an estimate of the net value of the estate. Where inheritance tax (IHT) is payable on the estate, some may be required to be paid before the grant of representation is issued.

Where executors (the PRs) are appointed in the will, they already have legal authority to deal with the administration; the grant of probate confirms that authority. On the other hand, the letters of administration give the authority to the PRs.

PRs duties and responsibilities
The PRs have a number of legal and administrative duties and obligations during the administration of the estate. Note that the PRs are the trustees of estate property and their responsibilities include the following:

• Ensuring that the estate is administered according to the terms of the will, or the intestacy rules.
• Determining what, if any, IHT is due.
• Taking reasonable care to preserve the estate assets. PRs are liable for property that is lost, damaged or destroyed.
• Paying all expenses, debts and liabilities of the estate with due diligence. A PR may be personally liable if this duty is breached.

Until 2014, the statutory rules of intestacy under the Administration of Estates Act (AEA) 1925 have remained static, setting out, in strict order of familial relationship, the individual (s) entitled to inherit the deceased’s property and assets in the absence of a valid will.

Recent developments
Important new changes under the Inheritance and Trustee’s Powers Act 2014 (which came in to force on 1 October 2014) have altered the AEA intestacy rules:

• Where there are no children, the surviving spouse/civil partner will inherit the entire estate. (Under the old regime, the survivor only inherited the first £450,000, with the remainder passing to other surviving relatives.)
• Where there are children, the surviving spouse/civil partner will inherit the chattels, the first £250,000 (the “fixed net sum”) together with an interest in half the residuary estate over £250,000 absolutely. The children receive the other half of the residue on reaching 18.
• “Personal chattels” have also been redefined.

If you would like any assistance with the administration of an estate please contact us now to speak with someone in our Probate department: