Losing a loved one is a difficult time, and then you may find yourself responsible for the administration of their estate. This can seem complex and confusing, however sometimes things can be simplified with a smaller estate. In this article we will cover everything around if you need probate if you have a small estate and how Goughs can help.
Topics to be answered in this article
What is probate?
Probate is the legal authority to deal with the estate once someone dies. This provides an executor or administrator the right to sell and distribute assets held by the person who has passed away. This will include their property, money and other personal possessions such as a car, jewellery and household items.
Depending on the value of assets within the estate, and how they are held, the estate may be considered as a small estate and would not require Probate.
Learn more: What is probate?
What counts as a small estate?
There is no set definition of a small estate, however you may not need probate if the person who died only had minimal savings or owned assets jointly with another. The need for Probate will depend on individual assets holders.
Financial organisations
Whether an estate is considered small depends on the assets and particularly the financial organisations involved. Each bank sets their own limit on the money they are willing to pay out without Probate. Some organisations have a limit of £5,000, whereas others will close accounts if the total is under £50,000. The same applies to pension providers, life insurance companies and share registrars.
Some financial organisations will consider each account separately, whilst others will combine the total of all accounts together.
Joint assets
As well as the value of an asset, the way an asset is held can determine whether Probate is needed. All assets are held either in a person’s sole name, or held jointly with another person.
Any assets that are held jointly tend to pass to the surviving asset holder without the need for Probate. The financial organisation will usually only require a copy of the Death Certificate.
Property and land
The passing of property and land differs and depends on how it is owned. A property can be held in a number of ways, for example in someone’s sole name, as joint tenants, and tenants in common.
Depending on ownership, the property and land will either pass to the surviving co-owner or pass in accordance with the terms of the person’s Will and estate.
Where a property is owned as joint tenants by the deceased and another, then it will automatically pass via the Right of Survivorship to the co-owner without the need for probate to transfer ownership. In this case the Land Registry is notified of the co-owner’s death. If the property is owned in any other way, then probate is usually required.
Do you need to apply for probate?
The first step is to establish the assets owned by the deceased. You can then contact the asset providers who will confirm whether probate will be needed to access their assets. Every organisation has its own rules.
If just one financial institution requires a Grant of Representation before closing the account, then you will need to obtain a Grant for the whole estate. It is therefore important to establish whether a Grant is needed as early as possible and contact the asset holders immediately.
How do you wind up a small estate?
Once the full value of the estate and the requirements of each asset provider is determined and a Grant of Representation is not needed, the steps to wind up the small estate can be simple.
Most providers will ask to see a copy of the Death Certificate as confirmation the asset holder is deceased. If the asset can be transferred or closed without the need for Probate, the organisation will usually provide a document called a Small Estates Declaration to be signed by either the executor or administrator of the estate. This declaration will include an indemnity whereby the executor/administrator confirms that a Grant is not being applied for, the value of the asset is below the required threshold and that the person signing the document is entitled to do so.
Some providers will also request to see a copy of the Will, identification and marriage certificates. These documents provide confirmation to the provider that they are paying and dealing with the correct person(s).
How can Goughs help?
Dealing with someone’s estate once they have passed away can be daunting and the process can be complicated. We can support you in working out the process. At Goughs Solicitors, our team is experienced in dealing and advising on all types of estates.
If you have any questions about a small estate and whether probate is needed or would like to find out more about how Goughs can help you, please contact us today.
