Probate is something that everyone assumes is necessary when someone dies. However, this is always the case for small estates in England and Wales. Here’s a look at when probate isn’t necessary to settle an estate.
What is Probate?
It’s simply the legal process that is normally used to deal with the estate of a deceased person. However, when an estate has a value of less than £5,000, probate isn’t necessary for the assets to be transferred.
Generally, Small Estates are classified as being an estate comprised of assets worth less than £5,000, though this isn’t a hard and fast rule. Small estates in England and Wales do not necessarily need to use probate to settle them.
Small Estates
A Small Estate normally has no property and a very small amount of money within it. Because the estate is so small, you are unlikely to need a Grant of Probate to deal with their assets. Different banks within the UK have different thresholds for probate. Some will release up to £50,000 without a Grant of Probate, whereas others will not release more than £5,000.
Joint Assets
Assets that are held jointly with another person may also not need a Grant of Probate to deal with the estate assets. This is because of the Right of Survivorship, which applies to joint bank accounts and property owned as joint tenants. The Right of Survivorship means that jointly owned assets automatically pass to the surviving owner. Though this applies to property owned as joint tenants, it doesn’t apply to property owned jointly as tenants in common. Joint tenants co-own the whole property. Tenants in common means each owner only owns a percentage of the property.
Any assets that are jointly owned for convenience but really belong solely to the deceased will need a Grant of Probate to distribute.
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Sole Assets
When an estate has a large number of assets that are solely in their name and not jointly owned, a Grant of Probate will be required; however, that is not always the case.
When a Grant of Probate is required is often a case of:
- The Estate Value as a whole
- The Value of an Asset
- Where the Asset is held
For example, the sale or transfers of shares and stocks normally requires it. However, some share registrars have Small Estate Procedures that allow for stocks and shares held in the name of the deceased to be sold or transferred without a Grant of Probate. The value the shares have to be beneath changes from one share registrar to another, but the threshold can be anywhere as high as £10,000.
Investment companies also have Small Estate Procedures, but they will normally take the whole value of the estate into consideration rather than the individual assets when releasing assets of a certain value or requiring a Grant of Probate to release them.
As you see, its not necessary in every case, but whether a Grant of Probate will be required will change on a case by cases basis. If you need help with sorting through a small estate and need advice about whether you need to apply for it, contact our experts today.
