Is Probate always needed?

Is a Grant of Representation always needed to deal with the assets in an estate?

-          If the estate is small, a Grant may not be needed.

If you are the executor of a Will, or the next-of-kin of a person who died without leaving a Will, you may be wondering whether you need to apply to the Probate Office for a Grant (called “extracting a Grant”). If the deceased died leaving relatively small amounts in bank accounts, and with no “real property” (ie land or buildings) and no shares or other investments, then you may not need to take out a Grant at all. In that case, the bank or credit union may be willing to release the funds to the next-of-kin for distribution without seeing a Grant. However, you will need to sign an Indemnity, which is a legal guarantee to the bank that you are entitled to receive the money. It would also mean that, if someone else claimed that they should have received the money, then you are the person who has agreed to be answerable to them, and you would be the person that they would sue.

TIP:  If you are administering a small estate without Probate, and signing an indemnity for a Bank or Credit Union, protect yourself by taking legal advice to ensure that you are acting properly and that you will not find yourself responsible for dealing with any disputes in the future – ensure you have a consultation with a solicitor before you sign anything.

-          You don’t need a Grant of Representation to deal with property that you owned jointly.

If you owned property jointly, for example if you jointly owned a house with your late spouse or partner, then a Grant will not be required to deal with that property. Property that is jointly owned passes to the survivor by “survivorship” and falls outside of the deceased’s estate. One can apply to the Property Registration Authority to have the property transferred to the survivor’s name using only the Death Certificate of the deceased. Likewise, the deceased can sell the property without a Grant.

 Help!  What is the difference between owning property jointly and as tenants in common?

Joint tenants own 100% of the property jointly. When one dies, the other becomes the sole owner of the property. Tenants-in-common each own a separate share in the property. For example, two business partners might own their premises as tenants-in-common, each having a 50% share. If one dies, then his 50% share becomes part of his estate.

What about a joint bank account? Does this pass by survivorship or does it form part of the estate?

This depends on the circumstances. For example, the survivor of a married couple who had a joint bank account would generally be entitled to the balance of funds in the account without any formalities. On the other hand, a joint account that was set up so that an elderly or infirm person could get help dealing with their affairs would be treated differently. In that case, the purpose of setting up the account may not have been to benefit the survivor, but rather solely to provide assistance to the deceased while they were alive. The kind of scenario would give rise to the presumption that the survivor has become a trustee on behalf of the estate, and that the funds in the account have become what is called a “resulting trust”. That presumption could be rebutted, for example, if the bank held documentation signed by the deceased indicating very clearly that the account was designed to benefit the survivor, and that it was not intended to become a resulting trust after his death.

TIP: If you are the survivor of a joint bank account, be careful. You could be required to repay any withdrawals that you make from the account after the person’s death, if the funds in the account are considered to have formed part of the estate. Unless the deceased was your spouse or civil partner, do not assume that you are entitled to treat the contents of the joint account as your own.

When is a Grant definitely needed?

In most cases, banks will need to see a Grant in order to release the funds in the deceased’s account. If the deceased owned any “real property”, that is to say land or buildings, in his sole name or as a tenant-in-common, then the Property Registration Authority will require the Grant in order to transfer the property into someone else’s name. So, if you have inherited land or a house or similar through a Will or on intestacy, you will not be able to have the property registered in your name without a Grant.

The Property Registration Authority will also require a document called an “Assent” to be filed with the application. This will be signed by the executor and it is a sort of Deed, transferring the property into the name of a purchaser or the beneficiary of the estate.

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Principal, Claire McCarthy Solicitor

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