What is it Probate ? How does it relate to Life Insurance ?
Probate is the process of sorting out somebody's estate - their property, money & their possessions - after they have died. In Scotland, it is called "Confirmation".
Proposed Govt rules - Post 2018 Budget prices for Probate
The cost to issue a Grant of Probate is currently £215 if the value of the estate is £5,000 or over. There is talk of the costs system being over hauled & maybe to help cover Covid 19 tax rises.
Note; There's no cost if the estate is under £5,000. Extra copies cost £1.50 each. This means you can send them to different organisations at the same time.
The actual Probate document has a holgram in it ( ie; like £10 or £20 note ) so cannot just be photocopied.
Who can carry out Probate ?
If the deceased left a valid Will, they usually will also have specified their designated Executors – these people are expected to “execute” their final Will & Testament. This could be an individual or individuals, solicitors, a bank or legal professionals. Their role as executor means they will share out their estate as specified & also deal with any related complications, as well as carry out any other final wishes specified in their Will.
Note, you are not legally required to act as executor, even if you are the only executor named in the Will - you can pass this over to someone else eg; a legal professional.
If there is no executor named, or there is no Will, someone must become the administrator of the estate – this will be someone who would benefit from the Will, or a blood relative if no Will exists. This administrator largely performs a similar role that an executor would.
How long does Probate take ? Do they have Life Insurance ?
This will usually depend on how complex the estate of the deceased is. If there are complicated assets, such as a business to sell, several properties, multiple investments or shares - then it is likely to take longer than if they had owned one bank account and very few other assets.
It will also depend on how much time you or other representatives have – will you be able to take extended leave from work to deal with probate ?
On average, according to the UK Probate Office this typically on average takes between 6/9 months to complete.
However, other complications can cause the process to take considerably longer, such as if a Will is contested, or the deceased did not keep clear records of all their assets & liabilities. It is not unheard of for the process to take several years to wrap up.
Covid 19 Probate delays re Life Insurance ...
Due to Covid 19, the Probate office staff may have to work from home. As such, if the deceased had a life insurance policies then this will need to be investigated.
Sometimes, people keep all their old life insurance plans even if cancelled, lapsed or ended & it makes it hard sometimes for the executors to work out what is or isn't operative when working on probate forms.
Probate & Life Insurance Trusts
If a life insurance policy is not into a life insurance trust from the outset, then it will fall into the persons estate & be subject to probate.
It may also be subject to Inheritance Tax (IHT) at 40% and as such, the relevant IHT forms may need to be completed before
If it is set into trust, then potentially it can be accessed far quicker & without probate delays. It maybe in the future once the proposed probate regime comes in - someone may specifically wish to access their life insurance plan sooner to help pay this potential increased bill eg; via terminal illness benefit.
Do they have a valid Will ?
It is estimated that only 30% of people have a valid legal Will, so it is quite possible that the deceased died without one, leaving them what is known as intestate. However, they may well have created one without your knowledge ( You should check their paperwork to see if they have a copy of this anywhere )
If there is no Will to be found among their personal belongings, they may have kept a copy with their personal solicitor, dedicated Will storage service or perhaps their bank.
Alternatively, they may have left a copy with the Principal Registry of the Family Division.
You can contact the Principal Registry at 0300 123 1072 (Probate Helpline) or write to them at:
The Principal Registry of the Family Division
1st Avenue House
42-49 High Holborn
London WC1V 6NP
In order to retrieve a persons Will from the Principal Registry, you will need to provide proof of death (ie; the death certificate), and you will most likely need proof that you are a named executor. You should also provide a certificate of deposit for the Will, but if you are unable to find this, you will need to write to the Record Keeper at the Principal Registry.
A non-executor can also request to withdraw the Will if no executor was named. You may need permission from a District Judge before they will let you have access to the Will.
Whether there is a Will or not will affect what kind of Grant of Representation you will need in order to continue the probate process.
What to do if there is no Will ( Intestacy)
As mentioned, a blood relative will need to become an administrator of the estate if there is no Will, as without one, the deceased’s estate will become intestate, meaning that it must be distributed according to the strict rules of intestacy. If you are not sure what to do, contact a solicitor for advice.
Obtaining the Grant of Representation or Letters of Administration
To execute a Will, you will also need to obtain the Grant of Probate or Letters of Administration. The Grant of Representation refers to the grant that you must obtain to carry out probate. The kind of grant that you need will depend on your circumstances, which is outlined as follows:
- If you are the named executor in the Will – Grant of Probate
- If you are the administrator with no Will – Letters of Administration
- If you are the administrator of a Will – Letters of Administration (with Will)
The Grant of Representation will make it possible for you to access all of the deceased’s assets, such as their bank and building society accounts. Doing so without the Grant of Representation would be very difficult, if not impossible. However, the Grant of Representation may not be needed if:
- Their properties, bank or building society accounts, life insurance policies were joint-owned by a surviving spouse or civil partner.
- The deceased did not have much money in their accounts – a bank or building society may be willing to release the funds without a grant, or;
In the event of jointly-owned accounts, the bank or building society could be willing to transfer sole ownership to the surviving spouse or partner, if you present them with the death certificate. However, if they had any sole accounts, you will most likely need the Grant of Representation.
You can obtain the Grant of Probate or Letters of Administration by contacting your local Probate Registry. - by filling out & returning Probate Application form PA1.
Ideally, this process may take 3-5 weeks. However, if there are other complications – if there is inheritance tax IHT to pay, or you make a mistake in filling out a form, for instance – obtaining the Grant could take a lot longer. You will also need to contact HMRC to pay any IHT due on the estate.
Note: this information article is generic & not to be relied upon as legal advice