Common misconceptions about Probate

It is common when instructed by clients in relation to a deceased estate to come across at least one of the following misconceptions, which I shall look to dis-spell here:

1. Wills cannot be challenged

It is often misunderstood that because something is written in a Will then that is final, and nothing can be done after death to change this. The law provides that certain people can make a claim against an estate depending on their relationship with the deceased. Sometimes, if a person does not fall within one of the categories of person able to bring a claim against an estate where they do not feel that they have been reasonably provided for under the Will, such as a child or a cohabitee, then the Will can be challenged on the basis that the deceased lacked mental capacity at the time the Will was made. If either of these issues arise then our contentious probate team would be happy to discuss the next steps with you.

2. All executors named in a Will must act

If you are named as an executor in a Will you do not need to act but you have the right to act should you wish to do so. An appointed executor can either renounce their appointment, which involves formally stepping down permanently, or they may wish to allow one or more of the other executors to get the grant of probate and they will only step in if needed – this is called having ‘power reserved’ and happens in most estates where the executors do not live near to one another and so getting all executors to sign all documents during the estate administration can prove to be logistically challenging.

3. I need all of the information for the estate in order to apply for probate

Although this is strictly speaking true, in certain scenarios it can be possible to apply to the Probate Registry for an emergency grant. This is normally reserved for instances where there is a business ran by the deceased which the executors need a grant of probate in order to deal with the assets or if there is an imminent house sale and that waiting to collate all of the information normally submitted in the probate application will lead to detriment being suffered by the estate.

4. Spouses do not need to get a grant of probate for each other’s estates

Although many spouses hold assets jointly such as bank accounts, savings and their property, increasingly often the deceased will hold assets in their own name for which a grant of probate will be required on order for the executors to be authorised to collect these in. Even if all of the assets are held in joint names and a grant of probate is not required to transfer these to the surviving owner, it is good practice to have a grant of probate to evidence what happened in an estate, especially when it comes to administering the estate of the deceased’s surviving spouse when the time comes so to claim any available inheritance tax allowances which can be transferred across.

5. Notifying banks of a death will cause issues with the supply of utilities to the deceased’s property

Once an executor is aware of the bank accounts which a deceased had and they have obtained the death certificate from the registrar, it is best to notify the banks so that the accounts are ‘frozen’. This means that payments in and out are stopped and the less time between the date of death and the account being frozen, the fewer transactions in to and out of the account which will need to be reversed. Utility companies can be notified that the account holder has passed away and the account can be placed into the names of the executor(s) whilst the estate is being administered. If payments in still need to be received, say from a rental property, then an executor’s bank account can be opened, or if you are instructing a solicitor, you can have payments made into their client account to hold as agent on the executor’s behalf.

6. Executors are paid for their work

Professional executors such as solicitors will almost certainly have provision in the Will for them to receive payment for providing their services, though non-professional ‘lay’ executors will more often than not have such provision. Executors can be reimbursed for their out of pocket expenses incurred in carrying out their duties as executor but they are unlikely to be able to charge for their time. It is therefore necessary to take this into consideration when writing your Will and to speak to those people you would like to appoint as your executors to see that they are happy to act as an executor given they will not be able to charge for their time.

7. Probate applications are quick and need to be done soon following the death

No two estates are the same but there are several steps which are required to be taken in order to make sure that everything is covered off which inevitably takes time. The probate registry have been updating their system for processing applications which has led to some delays in recent months and the process of writing to various banks and institutions to obtain date of death valuations can take longer than anticipated, especially in the post-Covid world where different business are operating in different ways. Depending on the estate in question, the executors can take a view as to how quickly they need to operate in terms of getting the grant of probate and distributing the estate. The executors tend to be afforded a year in which to administer the estate, after which interest can start to accrue on legacies in a Will which remain unpaid. Inheritance tax, if payable, is due at the end of the sixth month following death and if not settled at that time, interest can start to accrue on the unpaid balance, together with penalties if no reporting to HMRC has been done. If there is no inheritance tax payable on the estate, then the deadlines for administering the estate are more case dependent and whether the assets in the estate need to dealt with and beneficiaries paid.

8. Solicitors’ fees are a percentage of the estate

Although this used to be a common occurrence, this largely does not happen, and we do not operate on that basis. This tends not to be a fair basis upon which to charge and, often, smaller estates with complex issues are estates which require more work. We often charge on a time spent basis for our work involved in applying for a grant of probate and in administering an estate but can sometimes offer a fixed fee as an alternative if we feel that we have sufficient information about the estate to provide an accurate fixed fee.

For support and to discuss an estate of which you are an executor, contact Tom Bird (tom.bird@bpe.co.uk 01242 248587) or another member of the BPE Private Wealth team.  We would be happy to run through the probate application process and talk you through what steps need to be taken.

These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.