Wills and Probate

When someone dies, all their property and assets such as money, investments, and their home come together to form what is known as their “estate”. All these assets must be disposed of according to the terms of their Will if one exists and under the Rules of Intestacy if one doesn’t. People who have been appointed as “executors” apply for the right to deal with the deceased’s will, which is known as “applying for a grant of probate.” This is an official document, sealed by the Probate Registry confirming the will is valid and the person appointed as executor is legally entitled to settle, and distribute, the estate. This is the first step of a probate sale. If the deceased did not leave a will, the process follows a similar route to that of probate but is called “obtaining a grant of letters of administration”. Anyone over the age of 18 can become the “administrator” but it is usually the deceased’s next of kin. How does the probate process work? For any jointly owned property, it will pass automatically to the joint owner so probate will not be needed for those assets, but for other assets or properties not owned jointly, probate or letters of administration will need to be obtained. You do not need to appoint a solicitor to obtain probate, administrators and executors can do this for themselves, although for more complex estates it may be worth getting legal advice. Probate can be applied for online or by making a postal application to a Probate Registry. You will need the original death certificate and original will to apply. In what is likely to be the most complicated part of the process, before probate can be granted, the executor must estimate and report the value of the deceased’s estate to the HM Revenue and Customs (HMRC). This includes estimating the market value of their property and detailing any debts they may have had. If Inheritance Tax (IHT) is payable on the estate, you will have to pay some, or all of this, before probate can be granted. Currently, there is no IHT to pay if the value of the estate falls below £325,000, or if everything above the £325,000 threshold is left to a spouse, civil partner, charity or a community sports club. Even where the value of the estate falls below the threshold, you must still report it to HMRC. If the home is given to children (including adopted, fostered or stepchildren) and/or grandchildren, the threshold is raised to £500,000. Once all the necessary information and supporting documentation is collated, you will then be able to apply for a grant of probate. Is it possible to sell a house still awaiting probate? You cannot legally sell a property without first obtaining the grant of probate, however you can put the house on the market for sale. This means you can instruct an estate agent, market the property, conduct viewings, and even agree a sale price with a prospective buyer - going as far as the drafting other preparatory conveyancing work before probate is granted. The buyer can apply for a mortgage in principle and arrange a survey, but contracts cannot be exchanged, and the sale completed until probate has been granted. It is important to remember selling a property whilst waiting for probate is not always straightforward and can cause several problems: • It involves a higher level of bureaucracy than with a normal sale • It can cause financial problems for the executor - they may need to pay probate fees, IHT, maintenance costs, and other out-of-pocket expenses before obtaining probate and, although these can be reclaimed from the sale of the estate. • Maintaining the property before and after probate can be problematic, as can empty properties which will need to be insured. Obtaining probate takes roughly between 12-14 weeks according to the latest reported figures. Added to that, the fact that a sale and conveyancing work can take several months, even if the property gets snapped up. The UK Care Guide suggests allowing between 6 and 12 months, with a reported average of 9 months for probate to complete. Some complex cases can take several years. If you decide to put a property on the market before probate is granted, you should inform the estate agent, prospective buyers, or anyone else involved in the sale and purchase because it may delay completion. Some buyers may be willing to wait, but others may not be able to do so if they are involved in a chain or need to move swiftly. Things to check • Is the probate property appropriately insured? And if so, is the insurance company able to continue with the insurance if the property is empty? If the property is not insured, it is a good idea to put suitable insurance in place. You should let the insurance company know if the property is empty and/or awaiting probate because additional costs may be involved. • Make sure the property is secure. Visit the property regularly to ensure it is OK. Most insurance companies stipulate that the property should be checked at least once a week as a condition of insuring it. • Utilities and bills - Whether you decide to keep the utilities on for viewings or have them disconnected, it is wise to keep the property heated in winter. • Ensure you let the local authority know for council tax purposes. If you sell the house on behalf of someone who has died, you will not need to pay council tax after probate is granted provided the property remains empty, although this is limited to just 6 months. If a probate property remains empty in the longer term, some local authorities will charge double the ususal amount of council tax. It is wise to appraise yourself of the local authority’s rules where the property is situated so as not to fall foul of its council tax regulations. • Carrying out any repairs or redecoration before putting it up for sale may make the property easier to sell and add to its value. Any expenses should be documented so that they can be claimed from the estate at a later date, assuming there is sufficient money. Selling a property subject to probate There are several ways to sell a probate property: • You can instruct an estate agent to market and sell the property in the usual way. Don’t forget to inform them that the property is subject to probate so they can pass this on to any prospective buyers. • The property can be sold at auction. Although you should bear in mind, it is standard practice with property auctions to complete the sale within 28 days. This will not be possible until probate has been granted. If you decide on this route, it is advisable to check what the auctioneers fees and expenses will be. • You could sell the property without using an estate agent or putting it up for auction. There are many online property sites that allow you to market the property yourself. • Selling the property directly to a cash buyer. If you sell to a cash buyer, there are likely to be fewer matters that could complicate or delay the sale, because they can offer you a fixed cash price and completion can happen as soon as probate is granted. Important points to remember • When someone dies, there is usually no rush to sort things out regarding their property. Taking your time to understand the probate process will pay dividends in the future. • If the property is in joint names, and the other person wishes to remain living there, you will only need to notify the relevant authority of the person’s death. • If the property is registered in the sole name of the deceased, the executor will need to get probate before the property can be sold. Although as stated, it can be marketed and preparatory conveyancing work can be undertaken but the sale cannot be completed. • If the property is not registered, a transfer of ownership to the executor will trigger the need to register it for the first time. • If, as an executor, you have never lived in the property, your knowledge of it may be limited. This should be reflected in any answers to enquires a purchaser’s solicitor may require. Whilst you are duty bound to find out as much information as you can about the property, you are not expected to know specific details if you have not lived there. • An executor has a duty to sell the property for the best possible price for the benefit of the estate they are representing. They must not sell the property at an undervalue to a family member, to one of the beneficiaries, or themselves. That is not to say it cannot happen, just that the market value of the property should be obtained (or a calculation of it) at the very least. • If you are unsure of the stages of the probate process, you should get legal advice. Sometimes the sorting out of someone’s estate can be tricky.

Wills and Probate

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