You may have heard the term ‘probate’ to describe dealing with the financial matters of a loved-one, but you may not have heard of the term estate administration. They’re both terms related to dealing with a deceased person’s estate but they have different definitions and there are important distinctions between them.
What is probate?
Probate may be required when someone passes away. Probate is a short way to refer to a ‘Grant of Probate’, officially known as the ‘Grant of Representation’ in England and Wales and ‘Confirmation’ in Scotland. Probate is required by law if the estate is worth more than £5,000 in value, if the deceased owned any property in their sole name or if a financial institution (e.g. a bank or building society) needs to see the ‘Grant of Probate’ in order to release the funds. Probate will not be needed if the assets were held jointly as they will automatically pass to the surviving spouse or civil partner.
Applying for probate involves:
Completing the application via a PA1P (if there is a Will) or a PA1A (if there is no Will). You’ll also need to submit an Inheritance Tax form to HMRC. This is the process in England and Wales. There are different rules and procedures in Scotland.
The term ‘Probate’ is often mistaken to mean all of the tasks to be completed following a bereavement but it actually just refers to obtaining the Grant to enable you to carry out these tasks.
Probate is just one part of the wider estate administration process. Probate provides you with the legal right to carry out the estate administration, including dealing with property, money and personal possessions.
What is estate administration?
Estate administration is the process of handling a person’s legal and tax affairs after they’ve died. This means dealing with all of their assets (e.g. property, personal possessions, shares and bank accounts), paying any Inheritance Tax and Income Tax and distributing inheritances to the estate’s beneficiaries. Estate administration can often be extremely complex, time-consuming and an added stress at an already difficult time for the Executor or Administrator.
Obtaining the grant of probate is usually a part of estate administration but it could involve: