Small estates and Probate
There are lots of misconceptions around Probate, and one is that it’s not always necessary for a small estate. The fact is, Probate is required in most circumstances, and what constitutes a small estate differs depending on which financial institution you’re dealing with.
If an estate is valued at below £5,000, then the chances are you won’t need to obtain a Grant of Probate. But you may consider an estate of £25,000 to be small, while the bank holding the funds deems it large enough to require Probate. Other banks will release funds up to a threshold of £50,000 without Probate.
Ultimately, you’ll always need to contact the bank or building society to ascertain whether it’s something you need to apply for in order to administer the deceased’s estate.
When Probate is not required
A small estate is just one instance in which Probate may not be required. There are other situations where it’s not necessary too, including:
- If assets are held jointly and they pass automatically to the surviving owner. This is called the Right of Survivorship.
- If assets are left in Trust, in which case they will be owned by the Trustees and won’t form part of the estate.
How do I know if the estate requires Probate?
In order to determine whether an estate requires you to apply for Probate, it’s necessary to calculate its entire value. This will include any owned property, cash in bank accounts, belongings, and shares.
You’ll then need to ascertain whether these assets are held in Trust or jointly owned, and finally, check with the decedent’s bank to confirm their threshold. Even if the deceased had debts that must be paid off, you may still need a Grant of Probate in order to settle the debts from the money in the estate.
For help with accurately valuing an estate and calculating the debt owed and inheritance tax due, we strongly recommend you speak to a professional, such as a Kent accountant for Probate services. Alternatively, if you choose to administer the estate without help, you can seek advice from reputable Kent tax advisors when filling in the necessary inheritance tax forms.
Completing a Probate application
There are several steps you’ll need to take before applying for Probate. You’ll need to identify where the decedent’s assets are held, and how much they’re worth, totalling everything up to achieve an overall value of the estate. You will then need to work out what inheritance tax is due. This process can take up to three months, depending on the complexity of the estate.
Your Probate application can be submitted online, but you may need to send documents through the post as well, such as the death certificate and original Will. There is also a fee attached to your application: if the estate is valued at over £5,000, you’ll need to pay £215, plus an extra £1.50 per copy of the document. Ordering multiple documents can speed up the process of settling the Will.
For detailed advice on applying for Probate, speak to a licenced professional today.