Probate, what I learned along the way

Image courtesy of Simon Howden / FreeDigitalPhotos.net

Okay, I admit, not a very cheerful subject for a blog. My aunt died last Christmas and, whilst my brother was helping my parents with practicalities, I felt I should do something and offered to deal with the probate. I have to admit, I didn't even know what probate was, but wanted to do something. My parents accepted and so my work began.

I'm really doing this as the process has been a complete voyage of discovery, and if it helps even one person, then it's worth me writing it down. I'm not going to write a full-scale 'what to do when someone dies' post, but I'll share my experiences in case they're of any use, whilst depersonalising it as far as possible.

My father was my aunt's next of kin and he, my brother and myself were named as executors. My parents and brother did the initial steps, they collected the medical certificate, collected her belongings from the hospital, registered the death and liaised with the funeral director to arrange the funeral. With the Christmas break, everything seemed more drawn out than it needed to be, but we got through the initial steps.

The next thing was to work out who we needed to tell. There are certain government agencies and the like who you can choose to be notified automatically as a result of the death being registered (called 'Tell Us Once'). I then made a list of everyone who I thought should be informed by going through her bank statements and bills. I listed every banker, credit card company, insurer, supplier, direct debit or standing order payee, places she received pensions from and listed friends from her Christmas cards. It was quite a list, I then looked on each company's websites for their procedure for reporting a bereavement and luckily had a willing mother who worked diligently through the list notifying everyone. We found her address book to notify friends and family, but even that was out of date and so needed some detective work. I guess the test will be how many Christmas cards come through this year.

The house insurer was only able to continue the existing policy for thirty days after her death. As she lived alone we needed to find unoccupied house insurance before this deadline expired, which was a task in itself, particularly when some companies wouldn't deal with me as it wasn't my house. As none of us lived terribly close to her, we also wanted a policy which didn't require weekly visits. We eventually found one, I'd recommend OCASO if you're in the same situation.

Throughout this process we were also trying to clear her house, partly to get it neat and tidy and partly because we had a bit of an issue over the will. My father was of the understanding that she'd taken it away from her solicitor and was keeping it at home, indeed my father had even bought a safe for her to keep it in. He went to the safe after she died and it was bare, so whilst tidying the house, we were also checking every piece of paper for the missing will. We had a copy and knew what it said, but needed the original. It was only about four months later, when it still hadn't turned up and the house had been emptied that I went back to a letter from her solicitor about a draft will for review. We thought that the solicitor himself had died, but managed to find a phone number for the firm he worked for. We called the firm and amazingly soon had the will in our hands. I guess we'll never know how the misunderstanding arose.

With the house tidy we then looked at putting it on the market. We met three agents and got three valuations. We picked the agent who we felt could do the best job and instructed them to take the necessary measurements and photographs. That in itself hasn't gone smoothly, and shows how difficult it is to sell a house from a distance, particularly when you're trying to get the most you can for it, but that's a story for another day.

We also had a car in the garage which probably hadn't been driven for three years. I thought that would be a real issue, but amazingly, as it was very low mileage, my brother managed to find someone who'd give us a few hundred pounds and take it away on a low loader. I thought we'd be paying to have it taken away!

Anyway, onto the crux of the matter, probate. HM Revenue & Customs were notified by the 'Tell Us Once' service and so we automatically received a request for a tax return for the period from 6 April to the date of death. Now, luckily I'm an accountant, not a tax accountant, and I even get my husband to do my own tax return, but I felt I owed it to everyone to do this one myself. It actually wasn't that bad, you need certain standard information (date of birth, death, national insurance number etc.) and an idea of the likely value of the estate. I then totalled up the gross amount of pension she'd received and the amount of tax paid on it, the total interest and dividends received and that was about that. Admittedly, her tax affairs were relatively straight forward, but I was relieved. I heard back within three weeks or so, and was lucky to get a tax refund, but you may have to pay tax if you're not so lucky.

Once I'd heard back from HMRC I moved on to the probate forms. PA1 asks questions about the deceased, the will, the executors, relations of the deceased and beneficiaries. Not all executors have to apply for probate, in my case my brother and father were happy to leave me to it, so they were recorded as 'power reserved'. The fiddly bit is that this form has to submitted with the inheritance tax forms, so you have to pick figures up from those forms and insert them into this one. It means you have an awful lot of forms to do in one go. You also need to send them a cheque for about £100 for the probate fee. As part of the process I wanted to check if my aunt's late husband's estate had been awarded a grant of representation, in order to truthfully answer one of the questions. It hadn't, but I found that out by completing form PA1S and sending a cheque for £6. They got back to me within two or three weeks.

As for the inheritance tax forms, you need form IHT205 if you're dealing with an 'excepted estate' (less than £325,000 or less than £670,000 and you have nil band left to use up from a deceased spouse, or less than £1,000,000 and all or part of the estate is passing to a surviving spouse, charity or other UK national body) or IHT400 if these cases don't apply. IHT205 may look lengthy, but believe me, if you're filling in IHT205 you're lucky, you should see IHT400!

Anyway, I (thankfully) only had to do IHT205. This asks various questions about gifts made in the seven years before death (luckily wedding and birthday / Christmas presents and the like don't count), any trusts, any assets outside the UK, any life assurance policies and any pensions. After this it was on to the numbers. First you need to detail any gifts, any joint property (and mortgages thereon), any assets in trust or outside the UK. Then it was onto the meaty bits, amounts of any cash and bank accounts, household and personal goods (we had the house contents and jewellery valued, I couldn't believe how little they came to!), stocks and shares (we found the number of shares she owned, and the valuation at the date she died from the internet), insurance policies and the property value. I included this at the middle value of the amounts we'd been given by the three estate agents, I'm sure it won't sell for that much, but I'd rather put it in the tax form at too high a value than too low.

The other form that's worth mentioning is form IHT217. You fill this one in if the deceased was a surviving spouse and they original spouse didn't use all their inheritance tax allowance when they died. It took me a while to find out you could even do this, and even longer to find out how, so I thought it worth mentioning. If the first spouse has left all of their assets to the surviving spouse, it means you have effectively twice the inheritance tax nil band to use on the second death. No wonder HMRC don't publicise it too widely!

With all of that done, I packaged up all of the forms and sent them, with the will and death certificate to the Probate Registry which was most convenient for me. I heard back a couple of weeks later with details of how I could make an appointment at the probate office to swear the oath. I made the phone call to book the appointment, but had to wait about four weeks as I'd obviously picked a popular location. Luckily it was just around the corner from where I work, so I nipped over during the day for my appointment. I'd not appreciated I'd have to have my bag searched or go through a security scanner, if I had I'd have tidied out my work bag the night before! The appointment literally took five minutes, and that included walking to the meeting room and confusion over the fact that she was calling out my aunt's name, not mine. I had to confirm that I recognised the will, was happy with the form I'd completed and then had to swear and oath that it was all truthful.

I had a letter back within a fortnight with the grant of representation. This gives us authority to transfer her assets to the beneficiaries, so the next stage will be to visit the various banks and contact share companies to get everything transferred to my father. We'll also no doubt need to change the title on the property. Now, I just need to try and concentrate on getting the house sold. That may be a whole task in itself!