When do I Need A Grant of Probate?

Following a death, the term “probate” is a commonly heard, but what is it, and when do you actually need it?

What is a Grant of Probate?

A ‘Grant of Probate’ is a legal document, issued by the Courts, which confirms who is entitled to administer the estate of someone who has died. It places obligations on the person to whom it has been granted, and any failure to correctly administer the estate by that person could result in the Court appointing someone else in their place.

Who can be the Grant of Probate be issued to?

The Grant can only be issued to specific people, and there is a set order of priority as follows:

1. An executor named under a valid UK Will- any named executor will always have first call on obtaining a Grant of Probate, however if someone is named as an executor but does not wish to act for one reason or another then they can choose to ‘renounce’ their role, in which case the right to apply passes to the next person in the order of priority.
2. A residuary beneficiary (the person entitled to the estate after payment of all gifts, tax and liabilities) named in the Will where a named executor is not acting;
3. A beneficiary left a specific gift under the Will, if there are no residuary beneficiaries to take the grant.
4. Where there is no Will, the person entitled to the estate under the intestacy rules.

Where the grant is issued to anyone other than the named executor, it is then known as a ‘Grant of Letters of Administration’. There are some technical differences between the two types of grant, the main one being that an executor’s authority to act arises from the Will immediately on the testator’s (the Will-maker’s) death (not the grant) whereas an administrator’s authority is granted only by the Grant and they have no authority to act on behalf of the estate before the grant is issued.

When may a Grant not be needed?

This therefore leads us to some examples of where a Grant may not be needed to administer the estate:

1. If there is a Will, and the assets in the estate are of a modest enough value not to require a grant. A modest estate for these purposes is likely to have no more than £5,000 with any single bank or building society and no more than £1,000 in share value. Where a house is owned by the deceased in their sole name a grant will always be required (regardless of property value).
2. Where there is no dispute in relation to assets, even though there is no Will, and all assets are passing to a surviving spouse (but not a long term partner) and are worth £322,000 or less. Where there are children or minors inheriting this may not be the case. It is also worth noting that each financial institution which holds funds for the deceased will determine whether or not they require a Grant before funds can be released. They do this based on risk, and usually have a threshold over which a Grant will always be required. This threshold varies widely from £5,000 to £50,000 depending on the institution.

It is also important not to confuse the need for a Grant with the requirement to report to HMRC for inheritance tax purposes. It is possible that an estate may need to file an inheritance tax return even if there are no assets to administer, for example if the deceased made gifts in the seven years before their death totalling more than £325,000, benefited from a trust, or where the estate is of someone who is a long term UK resident for inheritance tax purposes but has only foreign assets at the date of death.

If there is any dispute over the validity of a Will, or a likelihood of claims being made against the estate, then a Grant will be needed, to ensure that there is a person nominated to protect estate assets and provide information while court proceedings are ongoing.

As a final point, the role of Executor/Administrator is not one to be taken lightly. Once a person begins acting (even before a Grant is issued) they cannot then step away without the consent of the Court. This is because Executors and Administrators are held personally responsible for protecting estate assets and ensuring that the estate is correctly administered. If they fail to do so then they could be required to reimburse the estate from their own funds. We would therefore advise anyone who is considering this role to seek professional advice on the steps they are required to take and any issues which are apparent in the estate.

If you would like assistance in relation to the administration of an estate please contact us on 0333 344 6302