Ten things you should know about probate

No doubt about it—the pandemic and lockdown has made sorting out the financial affairs of a friend or relative much more difficult.

Sadly, those named as executors on a friend or family member’s Will may have found themselves called upon to do their duty way before they’d anticipated.

The Financial Times asked its FT Money readers for their experiences of how they have found the process in England Wales. Here’s what people reported…

1.Keep your executors informed

If you are named as the executor on a friend or relative’s Will, it’s crucial to talk to the person while they are alive, so you know where the key documents can be found. It’s also wise to ask that person that they keep records of their assets up to date if possible.

Some FT readers warned that they had been hassled by charities in cases where the deceased had left money to that cause, demanding to know when they would get the money.

2. Record every detail

Readers told the Financial Times they’d been surprised at how much work was involved in obtaining probate even for smaller estates. And for estates worth substantial amounts of money, the work was even more extensive—especially if the deceased had gifted family members or friends money in their lifetime. Probate can be necessary even if the estate is worth less than £10,000 depending on circumstances.

3 Prepare for delays

As we’ve reported on this website extensively, delays in obtaining grants of probate have beleaguered the legal profession in recent years. The situation has been worsened thanks to the pandemic. And it has been difficult to obtain death certificates, insurance pay-outs, money from the banks and building societies etc. Make notes of every phone call and what you are told to try to keep track of everything.

4 Get lots of death certificates

One Financial Times reader told the newspaper that executors should get 20-25 copies of the death certificate (they cost £11 each) and the same number of copies of the Will notarised. This will help make the process easier.

The UK Government runs a Tell Us Once service where you can inform all government departments of someone’s death with one phone call or email. This service covers HMRC, the Department of Work and Pensions, the Passport Office, local council services and more.

UK Finance and the major banks run a Death Notification Service, which should do the same thing for all banks and building societies.

5 Lasting Power of Attorney

A Lasting Power of Attorney (LPA) only remains valid during someone’s lifetime. When a person dies, you also need to inform the Office of the Public Guardian of the death.

6 The seven-year rule

Financial gifts made in a person’s lifetime need to have been gifted seven years before their death in order not to quality for inheritance tax. If you know or suspect the person had made financial gifts, it is helpful to have at least seven years of bank statements, so you can check when gifts were made.

7 Deadlines for inheritance tax

Inheritance tax should be paid six months from the end of the month when the person died. After this, the estate will be charged interest. If inheritance tax is not paid 12 months from the end of the month of death, £100 is charged. To take account of lockdown, HMRC has said that delays caused by the pandemic are a “reasonable excuse” for late payment or late submission of returns.

HMRC hosts a webchat Mondays to Fridays 9am to 4pm where you ask inheritance tax questions.

8 Negotiate legal costs

Financial Times readers told the newspaper they had negotiated deals on legal fees and that others should not be afraid of trying. Typical costs for legal fees are 2.5 percent, so on a £450,000 estate, those fees might total £11,250.

9 Beware valuing asset costs

Readers also warned that valuations could prove expensive and that it was worth challenging them. Remember that any jewellery worth more than £1,500 needs a professional evaluation. The same applies to antiques, works of art and other collections.

Because shareholdings are likely to be less than their original valuation at the present time, a claim can be made to the HMRC to substitute the lower sales value.

Finders International offers cost-effective, quick properly sales and asset valuations. Click here to find out more.

10 Protecting the estate

You will need empty buildings insurance if the house belonging to the deceased is vacant for more than 30 days, which is more expensive than conventional home insurance. Again, Finders International can help with Aviva Property Insurance, see more details here.