When should I apply for probate after someone dies?
December 7, 2022
When a loved one dies, handling their estate can be a daunting prospect and it is understandably a task you may want to put off dealing with, particularly at what is already a difficult time. However, there are a number of reasons why you should take action quickly.
If Inheritance Tax is due on the estate you are dealing with, you need to pay this within six months of the deceased’s passing. If you exceed this deadline, you could be liable to pay interest or even a fine. Dealing with Inheritance Tax is one of the most complicated aspects of being an executor, find out more about what is involved here.
As well as fulfilling the legal obligations, you will also want to make sure you take advantage of any reliefs and exemptions available that can save money. Some of these can only be claimed for up to two years after the death, including the ability to make sensible variations to the will of the deceased.
We recently handled a matter for a client where the family had lost their father within a few months of their mother. We were able to mitigate the rules, which taper tax relief on the house in estates over £2 million, by preparing a variation of the mother’s will to reduce the total estate of the father. This was only possible because the mother and father died within two years of each other, and the executors instructed us quickly after the second death. In this case, timely legal advice substantially reduced the amount of Inheritance Tax owed.
The ability to pass on some pension pots tax-free also only lasts for two years. If this is not carried out within the timeframe, you may find yourself having to pay 40% Inheritance Tax on the funds. The average UK pension pot is around £60,000, but with some people holding the lifetime limit of just over £1 million, having to pay tax on this sum could result in huge losses.
Moving quickly to get a Grant of Probate is essential in allowing sufficient time for you to take any tax-saving measures. As an executor, it is your responsibility to achieve the best outcome for the beneficiaries, which means if you do not act quickly and they miss out, you could be personally liable and forced to reimburse them for any losses.
Get further useful advice in our free guide for executors.
The information contained in this article is intended for general guidance only. It provides useful information but it is not a substitute for obtaining legal advice as the articles do not take into account specific circumstances. So do please Contact US for legal advice on the issues raised.