What does it mean to have a house in probate?

Start talking about Wills and you’re into the stuff of murder mysteries and legal thrillers. However, the truth is not nearly as glamorous and has far more paperwork.

When someone dies then their estate needs to be deal with. This means that their possessions from larger things like houses to smaller, more personal items will go to others. The legal process that allows this to happen is called probate.

Can probate be granted without a will?

Probate has to be applied for in the vast majority of cases, even if there is no will. Where the will does make a difference is around who will be responsible for valuing the estate and then carrying out the work of probate including selling property and dispersing the estate.

If there is a Will in place then the executors, the person or persons named to carry out the wishes of the deceased, will apply for probate or ask a solicitor to do so on their behalf.

However if the deceased had not made a will then probate regulations still apply. In this situation, their spouse, civil partner or children can become administrators of their estate and apply for probate.

There may be some incidences where probate is not required. For example, if the estate consists entirely of assets the deceased owned jointly with a spouse or civil partner, such as a house. Or if the estate is extremely small, less then £10,000, then probate may not be necessary. But bear in mind that banks and financial institutions will not release assets without proof that probate has been granted, and an estate of this size is unlikely to include property.

Do you have to pay taxes if you inherit a house?

No one is going to think that an inheritance sounds like a bad thing. You’re more likely to think kindly towards the deceased and make plans to enjoy what they have left you. But this might be less than you expect. Part of applying for probate includes assessing if the estate is at the threshold for inheritance tax. And if it is paying at least part of it to HMRC before probate is granted. As an executor or administrator, you can use any money the deceased held in a bank account to pay this or pay it yourself and claim it back at a later point.

Pay Inheritance Tax

The threshold Inheritance Tax is currently set at £325,000 with 40% paid on anything over this figure. This might sound like a huge amount until you take into account any property included in the estate. The average selling price for a detached house in Yorkshire is £272,754, according to Land Registry data, which is good way towards the threshold.

Recent reports also show that Yorkshire has the highest percentage rise in house asking prices in the country. At 8.1%, it even beats London who has seen more conservative rises. While a rise in price sounds good it’s worrying news for beneficiaries of Wills on two levels. There’s the Inheritance Tax issues raised above. But there’s also Capital Gains Tax to consider. A house that increases in price is subject to this upon sale. And if a house increases in value between the owner passing on and the property being sold then Capital Gains Tax will be applied. This will further reduce the amount of inheritance available.

And, of course, any income you acquire from the house after inheriting it, such as rental money, will have to be declared and Income Tax paid as appropriate.

And while it’s not a tax if you inherit a jointly owned property with a mortgage you’ll be liable for the mortgage payments.

What would happen if I died without a Will?

A popular idea is that the contents of a Will are top secret and will only be revealed at a reading thus causing maximum shock amongst those gathered. It’s actually a good idea to talk to your loved ones about your Will and the provisions you are making. This allows your executors to be clear about your wishes and how you want them to be carried out. It also allows them to understand the responsibility they are taking on and how the various processes work.

If you haven’t made a Will it might be because you think that you don’t need to. For example, you believe that your partner or children will automatically inherit your house. Or because you made one ages ago and didn’t see any need to update it. However, be aware that getting married or remarried invalidates a Will. And that partners do not stand to inherit unless the relationship has been formalised. It’s things like this that make it clear that getting advice from an expert like a solicitor does make a difference when it comes to legal matters. Estate planning is something everyone needs to consider whether you’re making a simple Will or looking at creating a trust. It will make life easier for your loved ones at a difficult time and is straight forward to do with our expert help.

Do you need to use a solicitor for probate?

Even if you decide to apply for probate on an estate by yourself you might want to get a solicitor involved once this has been granted. A solicitor will be able to help you navigate any tricky issues that might arise. Would you know how to deal with descendants who were left out of the Will and want to claim against the estate? Or what to do if the estate contained foreign assets? Or was insolvent?

A solicitor is well placed to help with these issues by applying their expertise in probate and particular issues in their geographic location. In rural areas, a business like a farm might still be generating taxable income while also being subject to Inheritance Tax. Similarly, rural properties may not be recorded at Land Registry requiring deeds to be located before the property can be sold. There’s no need to deal with a complicated or trying issue at a time of grief when you can rely on a professional.

In an ideal world, the solicitor who drew up the Will would be the one who also worked with the executors. But if this isn’t possible then choose another probate solicitor or accountant to support you.

Arrange a meeting to discuss your particular needs and talk about any concerns you have regarding the estate and how it is dealt with. It will also be an opportunity to consider how communication will take place and estimated time frames.

Pricing may also be a factor in who you choose to support you. Options are usually an hourly rate, fixed fee or percentage of the estate. Depending on how complex the estate is and what the value is may influence your choice. Foys offer fixed fee packages which you may want to investigate.

Inheriting property should be an exciting opportunity and the chance to remember the deceased with affection. It may not be a quick and easy process but the right support an awareness of the law there can be a satisfying outcome.

If you need legal advice regarding any aspects of probate, use our Online Form to contact our probate specialists.
Alternatively, contact your local Foys Solicitors office:

  • Doncaster – 01302 327 136
  • Retford – 01777 703 100
  • Worksop – 01909 500 511
  • Clowne – 01246 810 050
  • Rotherham – 01709 375 561
  • Sheffield (Waterthorpe) – 0114 251 1702
  • Sheffield (Chapeltown) – 0114 246 7609

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