What happens after the grant of probate is issued?

If you’ve made an application for probate and you’re going to be named on the grant document, you might have some questions about what should happen once probate is granted. We’ll guide you through some of the common steps that you might need to consider post-grant.

If you’ve made an application for probate and you’re going to be named on the grant document, you might have some questions about what should happen once probate is granted.

After probate is granted

Once probate is granted, the people named on the grant document (sometimes called the ‘personal representatives’) can use it to deal with the estate of the person who’s died. The process of dealing with an estate can include: closing down bank accounts, cashing in pension and insurance lump sums and selling or transferring property. 

Those named on the grant will also be able to give funds to beneficiaries (these are the people who’ve been left something in a will like land or money).

The personal representatives will either be the executors of the will or the administrators of the estate (such as next of kin if there wasn’t a will).

Understanding probate

Probate is the legal process of dealing with someone’s money, property and possessions (their ‘estate’) after they die. A probate grant (also referred to as a ‘grant of probate’) is a document issued by the Court that gives someone legal authority to deal with the estate of a person who’s died. 

It can also be known as ‘a grant of letters of administration’ when someone dies without a will.

If someone you know has died without a will

And you haven’t yet applied for probate, Farewill’s Essential Probate service can help you get a probate grant for as little as £595. Or if you’d like us to take care of all of the estate admin for you, we also offer a Complete Probate service. Find the right probate service for you.

Closing bank accounts

Every bank has their own rules on how much money they can release before seeing a probate grant. We’ve provided a helpful list of probate thresholds from the most popular banks in our article ‘When is probate required?’.

If you’ve been told by a bank that they need to see a probate grant, you can send a hologram court copy of the grant to them with the death certificate of the person who’s died. They should make copies of these documents and then return the originals to you for your safekeeping.

What happens when you apply for probate

When you apply for probate, you have the option to request additional copies of the grant. These copies will have a hologram on them and can be used to send to the banks and other asset holders. We advise you to always safely keep hold of one copy. 

Each bank will have their own account closure forms, which every named personal representative on the grant will need to complete and sign before they will release any funds to you.

It’s a good idea to set up a dedicated bank account for funds from the estate

This will help you to keep the estate money separate from personal savings and can make it easier to keep track of things. 

You might also be asked to provide ID and proof of address to the banks. 

Cashing in lump sums

Some pension and insurance policies will ask for a probate grant before they can pay a lump sum to the estate of the person who’s  died. 

This is so they can see who the named personal representatives are and know that they’re paying out to the correct people authorised to deal with the estate.

As with the banks, the pension providers and insurance companies will provide you with their own paperwork to complete and sign.  They may ask for ID and proof of address as well as a copy of the will, if there was one.

Selling or transferring property

As personal representative, you will be responsible for dealing with any property in the estate. 

The property may have been owned solely by the person who has died, or it may have been owned jointly with others. There are two ways of jointly owning a property:

  1. As joint tenants - where the owners jointly own the whole property

  2. As tenants in common - where the owners each individually own a specified share of the property

With a joint tenancy, probate isn’t required and the other owner will automatically get the share owned by the person who’s died. If the property is registered, all you will need to do is complete a Form DJP (you can find this at www.gov.uk) and send this to the Land Registry with the death certificate. They’ll then update the title deeds (the official record showing who legally owns the property). 

If the property is unregistered, the death certificate should be kept with the bundle of title deeds.  

If the property was jointly owned with others as tenants in common, the share owned by the person who has died will pass in accordance with the terms of their will or under the intestacy rules. The rules of intestacy decide what happens to someone’s estate when they die without a will. You can find some further guidance on these rules here.

It’s best to consult with the beneficiaries of the estate before deciding whether to put the property up for sale

They might prefer to transfer the property, or a share of the property, into their names instead. Although this might not always be possible. 

We’d recommend that you seek the advice of a conveyancer (a property legal specialist) who can help sell or transfer a property. A conveyancer will likely need to see the probate grant, death certificate, your ID (if you’re the named personal representative) and proof of address. They’ll prepare the necessary forms on your behalf and you’ll just need to check them over before signing. 

Every named person on the grant will need to sign the property sale or transfer forms. 

Most professionals now charge fixed fees for this sort of work. You can search for solicitor conveyancers in your area at https://solicitors.lawsociety.org.uk.

You can also find some further guidance on dealing with a property after death at https://www.gov.uk/update-property-records-someone-dies.

Shareholdings

A shareholding is an allocation of shares held in a company. When a shareholder dies, the right to the shares will be decided based on what the person who’s died said in their will. Or under the intestacy rules if there wasn’t a will. 

You’ll need to register the death by sending the death certificate of the person who’s died to the share registrars. Share registrars are responsible for keeping track of a company’s shareholdings. They’ll set out their own requirements for the shares to be sold or transferred. They’ll likely need to see the probate grant as well as your ID and proof of address. They’ll also have their own share dealing forms, which they’ll send to you for completion. 

Where possible, you should discuss the shareholdings with the beneficiaries and see whether they’d prefer to sell or transfer the shares. 

Settling debts

Once some of the assets are cashed in and funds become available, it’s best to settle any outstanding debts, taxes and fees. You should pay off funeral expenses first.

Other debts may include:

  • Loans

  • Credit cards

  • Store cards

  • Utility bills

  • Rent arrears (money owed to landlords)

  • Mortgages

  • Care home fees

  • Car finance

With joint debts, in most cases, these will pass on directly to the people who jointly took out the loan with the person who’s died or the guarantor. The guarantor is the person who makes a signed promise that they will be personally liable for someone’s loan repayments if they can no longer make them. 

Notices to creditors

You might be worried about there being debts in the estate that you don’t know about. One of the ways you can protect yourself against unknown creditors (like credit card companies, utility companies, car finance companies, lenders of personal loans and landlords) is to place notices in The Gazette

The Gazette is an official journal of record in the UK. These notices are called ‘statutory advertisements’ and although you’re not legally required to place them, they protect personal representatives against future claims against the estate. Once placed, creditors will have a two month deadline to come forward with any claims. 

If you don’t place a notice and a creditor comes forward after you have distributed the estate, you may have to pay the creditor yourself.

DWP (Department for Work and Pensions) investigations

If the person who’s died was in receipt of means tested state benefits, the DWP has the right to investigate whether these benefits were correctly claimed. Means tested benefits are awarded to people based on their income and how much capital savings they have. Such benefits in the UK include:

  • Pension Credit

  • Housing Benefit

  • Council Tax Support

  • Cold Weather Payments

The DWP will ask for a breakdown of the assets in the estate, as well as regular income received and will compare this to what the person who’s died declared in their lifetime. If the details are the same then there will be no further action taken. 

However, if the details are different they may also ask for more detailed financial information, such as bank account statements dating back 12 years. They will then recalculate whether the person was entitled to receive the amount of benefits they had. 

If it turns out too much of a means tested benefit has been claimed, the DWP will look to recover the overpayments from the estate.

If you receive a request for information from the DWP, it’s best to provide them with as much information as soon as possible. This is because it can take several months for the investigations to be completed and you won’t be able to fully distribute the estate until the DWP has issued you with clearance. 

Some tax considerations

Capital Gains

If a property or other asset in the estate has sold for a significantly higher amount than the date of death value, you may need to pay capital gains tax. 

Capital gains tax calculations can be tricky. So we’d recommend that you seek further advice from an accountant or HMRC, especially before selling the asset if there is a real prospect of a gain being made. You can also find out further information here.

Income Tax

Any income received after a person’s death and during the period of the estate administration (such as interest, rent and dividends) will need to be accounted for and you may need to pay income tax. 

If you haven’t already, we’d recommend that you contact HMRC through the ‘tell us once service’ and they’ll be able to tell you if you need to complete a self-assessment tax return for the estate. You can find out further information here.

Some beneficiaries (like charities or higher rate taxpayers) might need a more detailed breakdown of the income received and tax paid during the estate administration. 

A brief note on trusts

If you’re an executor and you notice that there’s a trust in the will, we’d always recommend that you seek the advice of a professional like a solicitor or accountant. This is because with certain trusts, there are set formalities that must be complied with. If a trust isn’t dealt with correctly, costly problems may occur in the future.

What is a trust?

A trust is a legal arrangement where assets (property, money, investments) are transferred by one person (the ‘settlor’) to another person (the ‘trustee’) to hold for the benefit of others (the ‘beneficiaries’). Some common types of trust that can be found in wills include: 

  • life interest trusts - when the income of an asset in a person’s estate is left to someone for their lifetime

  • discretionary trusts - when the trustees named in the will have the power to decide who out of a list or class of beneficiaries will receive the assets in the trust fund and, how much they can receive

Distributions to beneficiaries

Once enough funds are received in the estate and the debts have all been paid, you can start to think about distributing to the beneficiaries. You can decide to do this in stages, or all in one go at the end of the administration. 

If there’s a will, you’ll need to distribute the estate based on the terms of that will. If some beneficiaries are receiving a set amount of money under the will or a particular item from the estate, it’s a good idea to deal with those distributions first. Once that’s done, you can start paying the residuary beneficiaries their share.

A residuary beneficiary will have been left a percentage of the estate in the will and their share is calculated once all the debts and estate administration expenses have been settled.

If there wasn’t a will, the estate will need to be distributed in accordance with the rules of intestacy

If you’ve decided to place statutory advertisements (see above), we’d recommend that you wait until the 2 months have elapsed before fully distributing the estate. 

If you know there’s a chance that someone will look to make a claim against the estate (for example because they were disappointed they weren’t included in the will), it’s best to wait 6 months from the date the probate grant was issued before distributing the estate.

Keeping accounts

Personal representatives must keep an accurate record of all assets and liabilities and they have a duty to keep track of all funds coming in and out of the estate. 

We’d recommend that you keep a detailed set of accounts, which you can keep updated throughout the estate administration process. It’s good practice to provide a copy of the accounts to the beneficiaries once everything is finalised. 

Article reviewed

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