Sorting out the estate when there is a will
Sorting out the estate can mean a lot of paperwork. Consequently, many choose to use solicitors to take care of it. But this can cost thousands of pounds even if the estate is not complicated. For a few hundred pounds, you could sort out a simple estate yourself. We’ll give you advice on doing this yourself and when to seek a specialist if needed.
- What does sorting out the estate involve?
- Who should sort the will out?
- Preparing for probate
- Value the estate
- Applying for probate or confirmation
- Paying off debts, taxes and distributing the estate
What does sorting out the estate involve?
Simply put, sorting out the estate when there is a will means getting probate and distributing the estate as instructed in the will.
If the person didn’t leave a will, there’s a different process for sorting out their estate .
What is probate?
Probate is a legal document that allows the executor of the will to sort out a person’s estate as they instructed in their will.
In England and Wales, probate it’s also known as a ‘grant of representation’. In Northern Ireland it’s called ‘grant of probate’, while in Scotland it’s called ‘confirmation’.
Do I have to get probate?
You may not always need to get probate if:
- The estate was held jointly with the person’s surviving spouse or civil partner, for example a joint bank account.
- The estate doesn’t include land, property or shares.
- The amount held in the bank is small
In this situation, you just need to contact the bank or building society to let them know that the person has died. They may ask for a copy of the death certificate as proof. The surviving spouse can continue to access that joint account.
Who should sort the will out?
When a person leaves a will, they normally would have chosen at least one person to act as the executor of the will. The executor is normally a relative or a friend, or sometimes a solicitor or even a bank. It is also quite normal for the executor to be an heir of the estate.
If you’re the executor of the will, you’re responsible for getting probate.
To get probate, you can either:
- Use a probate specialist which can cost thousands of pounds, or
- Do this yourself which usually costs a few hundred pounds to do.
The costs are usually paid out of the estate, provided there is sufficient money to do so.
Use a probate specialist
If you don’t feel up to the task or if it’s a complicated estate, then it’s a good idea to use a probate specialist. It’s also sensible to use one if there are doubts over the validity of a will.
If you do decide to use a probate specialist, you should expect to pay several thousand pounds for their services. But costs can vary significantly.
Read more about using a probate specialist.
Get probate yourself
If you’re prepared to take on the task of getting probate, you can save quite a bit of money. You could then pay a solicitor for smaller things, such as checking through the probate forms.
If you decide to do this, you’re legally responsible for making sure that any claims on the estate, such as debts and taxes, are paid before the estate is distributed to the heirs.
Use our guide below to sort out the estate and get probate yourself.
Preparing for probate
The first step in applying for probate involves some ‘hunting’ and a little paperwork. Specifically, you need to find the will and make copies of certain documents.
These documents are needed as you go through the process of getting probate.
Find the will and make copies of some important documents
The deceased should have told you, a relative or a friend where they’ve stored their will. If you’re not sure where to search for a will, visit GOV.UK for help.
You should also check for:
- A codicil – this is a legally binding document that the deceased may have written to make additions or changes to their original will.
- A letter of wishes – this is a document that the deceased may have written to explain certain things in their will, or tell what kind of funeral they want. The letter of wishes is not legally binding.
You’ll need to get at least six certified copies of the following documents:
- The will
- The codicil(s), if there are any
- Death certificate
- Birth certificate
- Marriage or civil partnership certificate, if the person was married
You’ll need to attach copies of these various documents to probate forms, and to access the deceased’s bank accounts, investments or life insurance.
Value the estate
Before you can apply for probate, or confirmation if you live in Scotland, you’ll need to value the estate. When you fill in the probate forms, you need to put in how much the estate is worth.
To value the estate, you need to:
Find out the value of any assets, such as property, private pensions, savings, shares, jewellery, or valuable collectibles.
If you think the item is worth more than £500, you should get it professionally valued.
Find out the value of any gifts that the person gave away in the seven years before they died. You’ll need to include these in the value of the estate.
Certain types of gifts which were given away before the person died may incur Inheritance Tax.
Find out how much debt they have if any, such as a mortgage, credit cards or loans. You should include funeral costs as part of the debt if the estate is paying for the funeral.
If there is joint debt, you’ll need to work out how much is the deceased’s share of that debt.
- Work out how much the estate is worth once the debt(s) are paid.
You’ll also need to work out if they had any jointly owned assets, such as a bank account or a property. Depending on how it’s owned, you may have to include it in the value of the estate.
Value jointly owned assets
Before you can work out the value of the deceased’s share of a jointly, you’ll have to find out how it was owned. Examples of this type of assets are a car, a house or a piece of land.
They may have owned this asset either as:
Asset owned as ‘joint tenants’
- Both owners have equal rights to the whole asset
- The asset automatically goes to the other joint owner if one of them dies
- The deceased can’t pass on their ownership of the asset in their will
- You have to value the asset and include it when working out the Inheritance Tax.
But there may not be Inheritance Tax to pay on this asset if the value falls within their tax-free allowance.
Joint bank accounts are nearly always held as ‘joint tenants’. So, while ownership of the account usually automatically passes onto to the joint account holder, you do need to value it as part of the deceased’s estate.
To value the deceased’s share of a joint bank account, you need to find out the balance in the account and divide it by the number of account holders.
HMRC usually scrutinises joint accounts held by unmarried couples or other combinations (e.g. parent and child) more closely. This because the normal exemptions from Inheritance Tax may not apply, and that the surviving joint holder(s) could be liable for a certain amount of tax.
Asset owned as ‘tenants in common’
- Each owner can own a different share of the asset
- The asset doesn’t automatically go to the other owner if one of them dies
- The deceased can pass on their ownership of the asset in their will
- You have to value the deceased’s share of the asset and include it when working out the Inheritance Tax.
Not sure how an asset is jointly owned?
If the deceased owned other assets, such as shares, you’ll need to contact the company:
- To find out how it was owned
- Work out how much the deceased’s share of the asset was, and include that as part of the estate.
For property or land, if you can’t find this information in their papers and records, you can get it for a fee, from
- Land Registry for properties in England and Wales
- Department of Finance and Personnel for properties in Northern Ireland
- Registers of Scotland for properties in Scotland
Working out Inheritance Tax
Once you’ve got the value of the estate and how much debt the deceased had, you need to work out the Inheritance Tax due.
If the total value of the estate after debts are taken out is over £325,000, then there is Inheritance Tax to pay.
The GOV.UK website has guidance on working out which part of the estate pays Inheritance Tax.
This tax is due within six months from when the person died. And interest is charged if it’s not paid within six months.
So to help avoid paying this interest, consider paying some or all of the Inheritance Tax before you finish valuing the estate. If you’re paying this from your own account, you can claim it back from the estate.
Applying for probate or confirmation
Once you’ve valued the estate, you’ll need to fill in a few forms and send it to the nearest Probate Registry office. You’ll also need to pay an application fee, and some or all the Inheritance Tax (if any) to HMRC.
How much you need to pay and what forms you need to fill in depend on:
Once they’ve received your application, the probate office will contact you to arrange for you to swear an oath. You can do this either in the local probate office or in the office of a commissioner for oaths.
You don’t normally need to apply for probate if the estate was either:
- Jointly owned and so passes to the surviving spouse
- Doesn’t include land, property or shares.
If you live in England and Wales
The application fee is £215. There’s no fee to pay if the estate is worth less than £5,000.
You need to fill in:
- Probate Application Form PA1
- Inheritance Tax Form IHT400 if the estate is worth more than £325,000
- Inheritance Tax Form IHT205 if the estate is worth less than £325,000
These forms are available to download from the GOV.UK website.
If the person died abroad, there are different forms to fill in.
You can contact the Probate and Inheritance Tax Helpline for help in completing these forms.
If you live in Scotland
Depending on the size of the estate, there are different forms to fill in:
- For small estates (worth £36,000 or less), you need form C1 and C5(SE)
- For large estates (worth over £36,000), you need form C1 The confirmation fee varies depending on the size of the estate.
Contact your local sheriff clerk to find out how much you need to pay and for help completing the forms.
If you live in Northern Ireland
You’ll need to request an appointment with your local Probate Office. Once you’ve an appointment, the probate office will help you complete the necessary forms.
The Probate Office will also ask you to bring various documents such as the will and death certificate, when you go for your appointment.
The fee is £250 for estates worth more than £10,000. There’s no fee to pay if the estate is worth less than £10,000.
Pay Inheritance Tax
If the estate is worth more than £325,000, you’ll need to pay at least some if not all of the Inheritance Tax before probate is issued.
If you think you’ll struggle to pay the tax because you need to sell assets from the estate first, you could ask HMRC for a grant of credit.
A grant of credit means that you can get probate first so that you can sell off the assets to pay the tax.
Paying off debts, taxes and distributing the estate
The next steps when you’ve gotten probate are:
Pay off debts and taxes
Once you’ve probate, you’ve the authority to contact the organisations that are holding the deceased’s assets, such as the bank or private pension provider.
They’ll ask for a copy of the probate or confirmation letter before they’ll release the assets.
If the assets are in the form of property or shares, you may need to sell this in order to pay off the debts and taxes.
If you’re looking to sell a property:
- You can get advice on valuing a property and the costs involved as well as selling tips on the Which? website.
- Read our Quick house sales guide if you’re thinking of using a quick house sale company instead.
If you’re disposing shares:
- You may want to consider doing this yourself, if the amount of shares is small. Find out more about how to sell shares.
- For a complex portfolio or if the shares are worth a lot, it’s a good idea to seek professional advice.
You could also speak to an adviser if you’re unsure about whether to sell these shares. Read Choosing a financial adviser for more advice.
Distribute the estate
After you’ve paid the debts and taxes, you can distribute the estate as the deceased wanted in their will.