What Probate Means

Here is a phrase I hear with incredible regularity: "I want to make a Will because I don't want my children to have to go to Probate."

This is probably the most common misconception that people have when deciding to make a Will. That isn't intended as a criticism, merely an observation. A non-specialist would not be expected to understand Probate; hence the role of the professional -- and also the point of this article.

Right, let's start with the basics. The word Probate is derived from the Latin phrase "prove it" and a Grant of Probate is what has to be obtained when a Will is proved, i.e. submitted to the court after someone has died.

So, as you can see, you only ever get a Grant of Probate when someone has died having made a Will.

If someone dies without making a Will, however, then they are said to have died intestate. In this instance the Grant from the Court is called "Letters of Administration". There are other types of special Grant, but generally the Court Order enabling the Personal Representatives to deal with an Estate is called the "Grant of Representation". However, most people refer to the Grant as a Grant of Probate because it rolls off the tongue slightly easier.

Who are the Personal Representatives?

If there is a Will, the Personal Representative is the Executor. If there is no Will (an Intestacy) then the Personal Representative is generally the next of kin. There is a statutory order which stipulates exactly who is entitled to act in this capacity. In certain circumstances, a residuary beneficiary or a creditor can also apply for a Grant of Probate.

To make matters a whole lot more fun, sometimes there can be what is called a partial intestacy. This occurs when a Will does not dispose of all of the assets of the deceased because it has been badly worded. In cases like this, all property not referred to in the Will is distributed according to the law of intestacy, which very broadly speaking means that the next of kin gets it (depending on how much it is and whether the next of kin is the surviving spouse or not). This is where winding up an Estate can take many years and can cost an absolute fortune.

Imagine if your next of kin were your cousins (or their children, if the cousins had pre-deceased you). Do you know how to contact them? And if you have died, how are your Executors going to find them? This is one of the most common problems of the home-made Will. A person doesn't know exactly how to word the Will, makes a hash of it, and the end result is that the administration of his Estate takes several years and costs many thousands of pounds because he wanted to save himself £50. Doesn't make sense to me.

So why does it take so long to wind up someone's Estate?

What has to be understood is that when someone dies, a line has to be drawn under their affairs for good. Before the Estate can be wound up, it is essential that all assets are claimed and all liabilities are discharged. Now, with regard to liabilities, these may not be just what was owed at the time of death; there may also be claims against the Estate.

In law, a claim can be made in respect of a debt or inheritance claim (that's too involved to explain here) for up to 6 months after the date of the GRANT! Not the date of death, the date of the Grant. So it will typically take 2-3 months to collect the necessary information in order to apply for the Grant.

Once the relevant affidavits are sworn and the papers lodged with the Court, the Grant can take up to 4 weeks to be issued. Then the six month clock starts running. See? We're up to 9-10 months already! This is why an Executor has 1 year from the date of death before anyone can say that he is "dragging his feet", so to speak. So if you are a beneficiary under a Will, don't think it is taking a long time just because 3 months has passed. Have patience.

Will making a Will give my Executors immediate access to my money when I die?

No. Here we have a Catch-22 situation. First you have to ascertain the size of the Estate, so that the Probate papers can be prepared. Then a Grant can be applied for, but only after any Inheritance Tax has been paid. But you can't get access to the funds without obtaining a Grant.

So I can't get the Grant until I've paid the Tax?

Correct.

But I can't pay the Tax until I get the money, and I can't get the money until I get the Grant!

Correct again.

But I can't get the Grant until I've paid the Tax!

Going around in circles now, aren't we? There are ways around it, it is not all that difficult, but again it would be wise to employ professional assistance in complicated cases because the professionals know the correct procedures, and can save a lot of stress and heartache to the bereaved relatives.

The processes for obtaining a Grant, paying the tax and administering the Estate are pretty much the same whether there is a Will or not.

So, most people should be saying "I want to make a Will because I want my property to go where I want it to go and I want my administration conducted smoothly and easily."

As usual, whether making a Will or administering an estate, make sure that you or the person you appoint has the necessary expertise in that area. STEP members will have, for certain.