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In this blog, we’ll demystify probate – explaining what it is, what’s involved, and how a solicitor can be an invaluable partner in managing the process.
What is Probate?
Probate is the legal process of managing a deceased person’s estate, including property, money, and possessions. It ensures assets are distributed to rightful beneficiaries, either per the Will or the Rules of Intestacy if no Will exists.
A Grant of Representation may be required to collect assets, pay debts, and distribute the estate. This court-issued document confirms the authority of the executor (if there’s a Will) or administrator (if there isn’t). Simple estates with valid Wills may not need a Grant.
Who Needs to Apply for Probate?
Not all estates require probate. Small or straightforward estates, or those with jointly owned assets, may not need formal probate.
However, complex estates involving properties, investments, or inheritance tax typically require probate and legal advice to ensure proper administration.
What’s Involved in the Probate Process?
While probate can vary depending on the complexity of an estate, the general steps involved are:
These steps can become complex with larger estates, intricate assets, or multiple beneficiaries, making legal guidance invaluable.
How Can a Solicitor Help with Probate?
Many people wonder whether they really need to hire a solicitor for probate or whether they can handle the process themselves. While you can apply for probate yourself, it can be overwhelming with disputes, uncertainties, or complex assets. Sometimes executors and administrators miss dealing with important aspects of the estate administration, as they are simply unaware of the legal considerations in an estate. A solicitor can offer the following benefits:
1. Expert Guidance and Clarity
The probate process involves numerous legal terms, forms, and responsibilities. A solicitor will break this down into clear, manageable steps tailored to your situation. They’ll ensure that you understand every part of the process and can make informed decisions at every stage.
2. Saving Time and Reducing Stress
Handling a loved one’s estate is emotionally taxing at the best of times. Solicitors can handle much of the administrative work involved in the probate process, allowing you to focus on grieving and supporting your family.
They’ll take care of applying for the relevant Grant of Representation, dealing with all the aspects necessary in an estate administration. This means you can rest assured that the process is in capable hands.
3. Resolving Disputes
Unfortunately, probate disputes can arise. These might include disagreements between family members about the terms of the Will, concerns about a Will’s validity, or arguments about how assets should be distributed. A solicitor offers impartial advice to resolve disputes professionally and avoid costly conflicts.
4. Ensuring Tax Compliance
Inheritance tax can be a complex area, and failing to account for or pay it correctly can cause delays, penalties or legal issues. A solicitor with experience in probate will ensure that all tax considerations are dealt with and would advise if a tax specialist would need to be consulted with if required in a complex estate.
5. Managing Complex Estates
Some estates are simple, while others involve complex assets and legalities. These complexities can make probate significantly more challenging without expert guidance. Solicitors have the experience to navigate these situations, ensuring that assets in an estate are properly accounted for and managed suitably.
6. Providing Support Throughout the Process
Probate isn’t just about the legal and financial elements – it’s also a deeply personal journey. A skilled solicitor will offer empathetic support and guidance to executors and families throughout the process, helping you feel supported during an emotionally difficult time.
When Should You Contact a Solicitor?
If unsure about legal support, contact a solicitor promptly, particularly if:
At Smith & Co Solicitors, we can meet with you to determine the complexity of your case and advise on the best way forward. Even if you decide to handle parts of the process yourself, consulting a solicitor can give you peace of mind you’re on the right track, and we work with our clients offering a tailored experience to suit our clients’ needs.
Don’t hesitate to reach out – help is available when you need it most. Telephone 01473 226231 and speak to Rachel Brinkley, Deputy Head of Private Client (and Training) or email rachel.brinkley@smithandcosolicitors.co.uk
Joint vs. Individual Assets
The first step in a divorce is distinguishing between joint and individual assets. Joint assets are typically those acquired during the marriage, such as the family home, savings, and pensions. Individual assets, however, refer to property owned by one spouse before the marriage or assets received as gifts or inheritance. Despite this, assets acquired before the marriage or during the marriage as a gift or inheritance may still be shared if the court deems it fair. The court has broad discretion to treat certain assets as joint if it serves the interests of fairness, even if one partner solely owns the asset.
Liabilities
The division of liabilities is another difficult but important consideration. Just as assets acquired during marriage are often treated as joint, liabilities (debts) are generally shared as well, even if they are in one spouse’s name. Courts can treat debt incurred by one partner, such as credit card debt or loans, as a joint responsibility, especially if both parties benefited from the spending. This often leads to disagreements, particularly if one partner incurred the debt due to poor financial decisions, such as gambling or overspending. The courts may consider both parties at fault—one for accumulating the debt, and the other for failing to address it.
The Principle of Fairness
In the UK, the court aims for fairness in dividing assets, which may not always result in an equal split. While the starting point is typically a 50/50 division, the court will adjust the settlement based on factors such as the length of the marriage, the financial and non-financial contributions of each party, and the needs of any children. The primary consideration is the welfare of the children, which may lead to an unequal division if it best meets their needs. Courts prefer to achieve a “clean break” financial settlement, meaning that the couple’s finances are entirely separated, but this may not always be possible depending on the parties’ financial situation.
Assessing Assets
To determine a fair settlement, both parties must fully disclose their financial assets and liabilities. This involves providing evidence such as bank statements, valuations of property, and pension details. Property valuations can be a point of contention, with each party valuing the property according to their interests. To avoid disputes, it’s common to obtain three estate agent valuations, with the final value being the average of the three. If parties cannot agree, a chartered surveyor can be called in for a definitive valuation, but this can be expensive and still may not resolve disagreements.
Lack of transparency in asset disclosure can cause delays and tension in the proceedings. If one spouse withholds information about hidden assets, it can lead to a prolonged and contentious divorce process.
Pensions
Pensions are often one of the most complicated aspects of financial settlements. In many cases, pensions are divided through a ‘pension sharing order,’ which allows one spouse to receive a portion of the other’s pension benefits. The division of pensions can vary depending on the length of the marriage and the specific financial circumstances of the parties. For example, if the marriage lasted for a long period (usually 20 years or more), it is likely that the court will divide pensions equally, even if one spouse had acquired pension wealth before the marriage.
Short Marriages
The length of the marriage is an important factor when determining a financial settlement. For shorter marriages, particularly those lasting less than three years, the division of assets tends to focus on addressing each party’s immediate financial needs, rather than an equal sharing of assets. In these cases, younger individuals may not be entitled to a large settlement, as they have more time to build their own financial security. However, older individuals, especially those nearing retirement, may receive a larger share of the assets to meet their needs.
If children are involved, the financial needs of the children will always take priority, regardless of the marriage’s length. In cases where the primary caregiver will be responsible for the children, the court may delay the sale of the family home until the children turn 18 to provide stability, but this can lead to an unequal share of proceeds from the sale.
Seeking Professional Advice
Given the complexity of financial settlements, it’s highly advisable for individuals going through a divorce to seek professional advice. A solicitor or financial advisor can help protect your rights and provide clarity on your entitlements. While not all divorcing couples require full legal representation, it’s important to get independent legal advice early in the process to ensure you understand the legal implications of any financial agreements.
The Role of Negotiation
Once assets are assessed, many couples try to negotiate a settlement on their own or through solicitors. Mediation can also be an effective way to resolve disputes, where an impartial third party helps facilitate discussions. Although mediation can be less adversarial and costly than court proceedings, it may not always be suitable, particularly if the settlement is not based on equality. In some cases, one party may end up agreeing to a settlement that is far less than they deserve.
Court Involvement
If negotiations fail, the court will intervene and make decisions regarding asset division. The court will consider financial disclosures, the length of the marriage, the needs of the children, and other factors when making its ruling. Court decisions can be unpredictable, and litigation is usually seen as a last resort due to the costs, delays, and uncertainty involved.
Post-Divorce Finances
After the divorce is finalised, both parties will need to manage their finances independently. This includes setting up new bank accounts, reviewing budgets, and planning for future expenses. It’s also important to update any Wills or insurance policies to reflect the changes in your circumstances.
Conclusion
Dividing finances during a divorce can be a daunting and complex process. It is essential to understand the legal framework surrounding the division of assets and liabilities and to seek professional advice to ensure a fair and equitable outcome. With careful planning, transparent communication, and professional guidance, couples can navigate the financial aspects of divorce and move forward with their lives.
If you need assistance with your divorce or financial settlement, the team at Smith & Co Solicitors can provide expert legal advice and support to help you achieve a satisfactory resolution. For more information, contact Keith Holland at 01473 228016 or email keith@smithandcosolicitors.co.uk.
A Lasting Power of Attorney (LPA) is a legal tool that gives another adult the legal authority to make certain decisions for you, if you become unable to make them for yourself. The person you give this authority to is known as an ‘attorney’. They can manage your finances or make decisions relating to your health and welfare. Without an LPA, decisions are subject to the Court of Protection rather than your spouse or your family.
Are there different types of LPA’s?
There are two different types of LPA. One of covers decisions about your property and finances and the other covers decisions about your health and welfare. You can choose to make both types or just one. You can appoint the same person to be your attorney for both or you can have different attorneys.
An LPA must be registered with the Office of the Public Guardian (OPG) to become effective. At Smith & Co Solicitors, we can help you with this step.
Property and Affairs LPA
If there comes a time where you can’t manage your finances anymore, the person you appoint as your attorney will be able to do this for you. This can include paying your bills, collecting your income and benefits or selling your house. However if you want to, you can limit the decisions they are allowed to make or place conditions on what they can do.
How do you make an LPA?
There are separate forms for the two different types of LPA. To protect your interests, an LPA must be signed by a certificate provider – a solicitor, doctor, social worker – who certifies that you have mental capacity, understand the LPA and have not been pressurised into signing it.
You must remember that it is a powerful legal document. At Smith & Co solicitors, we have experience of preparing them to safeguard you from making errors that may make life difficult for your attorney in the future.
Registering the document can take up to 3 months and there is a cost for each LPA.
How do I choose an attorney?
You can choose anyone you want to be your attorney as long as they are over 18. For a Property and Financial Affairs LPA, however, the person you choose cannot be bankrupt. It’s important to think carefully about who to appoint. Think about who knows you well and who you trust to make these decisions for you, and also whether the person is reliable and has the skills to carry out the role.
You can choose to have more than one attorney. They can make decisions together (jointly) or act separately (severally) or a combination of both. When making decisions, your attorney must follow the rules within the Mental Capacity Act, acting in your best interest, taking into account your past and present wishes and not taking advantage of you to benefit themselves. An attorney must keep all of your money separate from their own.
I already have an EPA. Do I need an LPA as well?
Enduring Power of Attorney (EPA) was a system that was in place before LPAs. If you made your EPA before October 1 2007 and it is correctly filled in, it is still valid and can be registered and used. EPAs only cover decisions about finances and property so you might want to make a Health and Welfare LPA to cover decisions about your care or treatment.
For more information about Lasting Power of Attorney, please contact Vicky Hosking.
