News

Flora Nelmes examines the stages of the probate process

  • July 12, 2021
  • By Flora Nelmes, Associate

What are the stages of the probate process?

Step 1: Completing the Inheritance Tax (‘IHT’) account

Before the personal representatives (‘PRs’) can apply for the Grant of Probate (the ‘Grant’), they will need to report the deceased’s estate to HMRC by completing an IHT account within 12 months of the end of the month of the deceased’s death and paying any IHT that is due within 6 months to avoid incurring any late interest.

During this part of the process the PRs will have to ascertain the value of the deceased’s estate together with any available IHT exemptions or reliefs by:

  1. Gathering a comprehensive picture of the deceased’s assets (namely any bank accounts, digital assets, chattels, pensions and life insurance policies, tax affairs, property, investments and/or trust interests) as well as any liabilities (which will help reduce the IHT payable).
  2. Identifying any gifts or transfers into a trust made during the last 7 years of their life.
  3. Obtaining open market valuations for any properties and chattels belonging to the deceased.
  4. Completing the IHT account. There are two types of IHT accounts (the ‘IHT205’ and the ‘IHT400’) and which form should be used will depend on the value of the estate and certain other factors.

The completion of the IHT account, including (if applicable) calculating the IHT due, is arguably the most complicated part of the probate process so we would always suggest you ask for advice from an experienced professional to make absolutely sure you do this correctly.

Step 2: Collecting in assets and settling liabilities

Once the Grant has been issued, copies will need to be sent to each of the deceased’s asset holders with a request for the accounts to be closed and the proceeds paid to the PRs or the PRs’ solicitor’s account.

Instructions will also need to be obtained from the beneficiaries as to whether they’d prefer to have an asset (e.g. a property or shareholding) transferred into their own name rather than having it sold. The PRs should also settle any liabilities of the estate and consider paying any cash legacies at this stage.

Step 3: Distributing the estate

Once all the liabilities, tax, administration expenses and legacies have been paid (and once HMRC has confirmed that no further IHT is due), the PRs can then distribute the remainder of the estate before winding it up.

There are certain steps a PR may wish to take before distributing an estate to protect themselves from liability against claims from unknown creditors or beneficiaries and if you contact our Private Client Department we can advise you further.

In our next blog we will look at the benefits of using a solicitor to manage the probate process but if you have any questions relating to probate or your own Will or tax planning requirements, please contact Flora Nelmes at flora.nelmes@hunterslaw.com or call 0207 412 0050.

Related News

Aug 02, 2021
Harriet Murray explores the implications of paying for the pandemic with a wealth tax in Lawyer Monthly
Jul 22, 2021
Hunters’ success in the Chambers HNW 2021 Guide
Jul 19, 2021
Daniel Watson examines the Law Commission’s proposal for reform of the Wills Act 1837 in EPrivateClient
Jul 15, 2021
Flora Nelmes examines why a solicitor should be used for probate
Jul 09, 2021
Molly Wills discusses MoJ’s consultation on a proposal to align probate fees in England and Wales
Jun 30, 2021
Flora Nelmes examines the first steps before applying for probate
Jun 24, 2021
Flora Nelmes discusses the fees when applying for the Grant of Probate
Jun 22, 2021
Jo Carr-West and Lara Barton discuss CGT for divorcing couples in WealthBriefing’s Family Wealth Report
Jun 21, 2021
Harriet Murray examines the analysis of a Wealth Tax in relation to the circumstances of the COVID-19 crisis
Jun 17, 2021
Flora Nelmes discusses the timings surrounding the probate process

© Hunters Law LLP 2021 | Privacy NoticeLegal & Regulatory | Cookies Policy | Complaints Procedure.

Hunters Law LLP is authorised and regulated by the Solicitors Regulation Authority (number 657218)