Winterborne Legal Services
Lasting Power of Attorney in Bridport.
What is the administration of the estate?
When the Grant of Probate has been issued, you can start dealing with the administration of the estate.
What you will need to do depends on what type of assets are in the estate.
Quick links to the chapters below:
Administration of the estate
- If your money is in a joint account, it belongs to both owners. Either of you can withdraw the money or use as much of the money as you want. If one of you dies, in most cases the survivor becomes the sole owner of the money in the bank account.
- In the event that a Grant of Probate is needed to allow the executor to deal with other assets of the estate, half of the balance in the joint account will be included in the Probate papers as an asset of the deceased. This does not mean that the money will be taken away from the survivor, just that it needs to be accounted for.
- Where a bank account is in the sole name of the person who has died, the bank may not ask you to provide a Grant of Probate in order to access the account. Instead, they will most likely want to see a copy of the death certificate and proof of identity of the person closing the account.
- Each bank has their own limit that determines whether or not they will ask for probate. If the person who has died had several accounts with a bank, the total amount in all the accounts which will used to decide whether the threshold has been met.
- As a guide, the threshold for probate ranges from £5,000 to £50,000, although this increased significantly during the Covid lockdown period.
WHAT PAYMENTS CAN BE MADE BEFORE PROBATE?
- If the bank decide they want you to provide a Grant of Probate, the accounts will be frozen until the Grant is available.
- You can ask for the funeral account and any Inheritance Tax to be settled direct from the bank account and these will be paid directly to the funeral directors and HM Revenue & Customs.
HOW LONG DO BANKS TAKE TO RELEASE MONEY?
- When the Grant of Probate has been issued, you will need to provide the bank with a sealed copy and the account closure form.
- The money will then usually be released within 10 to 15 working days.
SELLING PROPERTY OWNED BY THE PERSON WHO HAS DIED
DO YOU HAVE TO WAIT FOR PROBATE BEFORE SELLING A HOUSE?
- If the house was owned in the sole name of the person who has died, Probate will generally be needed before the house can be sold or transferred.
- You can put the house on the market and accept an offer before the Grant of Probate has been issued. You will need to make sure the Estate Agent and prospective buyers are aware of this.
- The sale won’t be able to complete without the Grant of Probate, so you will still need to wait for the Grant to be issued.
WHAT HAPPENS IF THE HOUSE SELLS FOR MORE THAN PROBATE VALUE?
- If the estate paid Inheritance Tax, and the property sells very soon after the Grant was issued, HM Revenue & Customs may look at substituting the sale price for the probate value and recalculating the Inheritance Tax due.
- Alternatively, Capital Gains Tax may be payable on the gain made by executors between the date of death and the date of sale of the property.
IS THERE A MORTGAGE?
- If the house was jointly owned, the surviving co-owner would still be responsible for paying the mortgage.
- If the person who has died owned the house in their sole name, the executor must pay the mortgage from the assets in the estate.
- You should check that the house is not given as a gift under the Will. If it is, the beneficiary may be required to accept the house subject to the mortgage.
CARS AND MOTOR VEHICLES
SELLING A CAR
- Cars and motor vehicles are chattels (personal possessions). As such, they can be sold or transferred to a new keeper before a Grant of Probate has been issued.
- Before selling the car, check that it is not given as a gift under the terms of the Will.
- Road Tax cannot be transferred to the new keeper of the vehicle. You will need to cancel the road tax in the name of the person who has died and re-tax the car in your own name if you will be driving it.
- If you were the named driver on the policy of the person who has died, you will need to inform the insurance company of the death. It is unlikely that you will still be insured to drive the car.
- If there is an outstanding balance on any car loan, this will need to be paid.
- The loan may be a joint agreement, in which case the surviving owner will be responsible for paying off the debt.
- In other cases, the executor will be responsible for paying the loan from the assets of the estate.
- It may be that the car was purchased with a secured loan. If there is insufficient money in the estate to pay the loan, the finance company can sell the car at a trade auction. The money raised at auction will be used to reduce the debt.
- Alternatively, it may be possible for the executor to complete a voluntary termination of the finance agreement. The car would be returned to the finance company and there could also be a penalty fee for early cancellation of the contract.
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