Families are seeing potential extra costs due to delays of up to several months before probate is granted after a death – but there are some things you can do to keep the costs down.
A grant of probate is a legal requirement for anyone handling the estate of a deceased person, before any inheritance can be distributed.
It is currently taking around two months for probate to be granted, with Which? warning that paper applications can take as long as five months.
Without probate people are unlikely to be able to access bank accounts, sell assets or settle the debts of someone who has passed away.
What is more, the delays – in some cases it has been reported families are waiting for up to a year – are racking up eye-watering Inheritance Tax (IHT) bills.
Executors of an estate must begin paying IHT within six months, otherwise the bill will incur a painful 7.5% interest rate. If the estate assets are needed to pay the bill, this makes it very difficult, plus very expensive.
The probate delays are being blamed on staffing cuts but also a backlog of ‘stopped’ applications, which can take much longer to resolve. Common causes for stopped applications include missing documents, submitted too soon after sending information to HMRC and a query about the condition of a will.
If you are making an application, please try to ensure everything is correct and hopefully avoid it ending up in the stopped queue.
So what can you do if you need to apply for probate? If at all possible, apply online because this is likely to be twice as quick as sending in paperwork. If you are unsure about the process, perhaps enlist a trusted family member to help you.
How to apply online and more information about the probate process can be found at www.gov.uk/applying-for-probate/apply-for-probate. If you are struggling you can also call the HMCTS digital support helpline on 0330 016 0051. We too shall be happy to assist you.
Other simple measures to keep the probate bill down include: Make sure you have a will – without one, the process can take far longer.
If you are in a couple, hold joint bank accounts – the money will all be accessible to the surviving partner without a need for probate.
Pensions are not generally part of an estate, but check that ‘expression of wish’ and/or death benefit nomination forms have been completed so there is no delay when the time comes.
You can also set up a life insurance policy in trust, which means it isn’t part of the estate and can be paid out before probate.
There are various options to deal with Inheritance Tax. Paying from the estate’s liquid assets ie bank accounts, is the easiest and banks can release funds for that purpose. You will need form IHT423 and the IHT reference number.
Executors can pay the initial IHT payment themselves and claim it back from the estate.
IHT loans are another option, as is paying by instalments. It is all quite complex and you can view more information on IHT at www.gov.uk/inheritance-tax.
It is strongly suggested you seek professional advice, which can help save a lot of time, stress and potentially money.
