Figuring out whether you need probate after a loved one’s death can be complicated during an already stressful time. This is why it is important to understand the probate threshold and how to properly value an estate. Our expert probate solicitors explain everything you need to know in this short guide.

Dealing with the death of a loved one can be difficult. Not only do we have to deal with the loss of a family member or close friend, but we have to arrange funerals, contact all relevant family members and authorities and, crucially, begin to think about estate administration.

There are a number of procedures you might have to follow before you can properly start managing a loved one’s estate after their death. If the estate is small enough, probate may not be needed for estate administration. However, if the value of the assets in the estate is over a certain threshold, you may have to apply for probate to legally manage the estate.

Below, we explain what this threshold is and offer some best practices for valuing the estate of a person who has died. We also explain how Percy Hughes & Roberts can support you throughout the probate process. If you have any questions we have not answered, our expert probate solicitors are happy to speak to you regarding your probate query and provide the legal services you need. You can contact us by completing the enquiry form below or by calling 0151 666 9090.

What is probate?

Probate is the legal process of managing someone's estate after they have passed away. The deceased's estate includes everything they owned, including money, property, investments and other assets. Estate administration involves valuing the deceased’s possessions, working out whether or not you need to pay Inheritance Tax, paying any debts the estate owes, and finally, distributing the remaining assets to the beneficiaries that are named in the will as inheritance.

The person responsible for estate administration is the executor, who should also be named in the will. This may be a person who was close to the deceased, or a professional executor like a solicitor, and it is possible to name more than one executor.

In order to gain access to certain assets (such as bank accounts) for the purposes of distributing them, the nominated executor must apply for a Grant of Probate. This is a legal document that gives them the authority to access the deceased’s property and accounts. This is often needed by banks to access accounts, sell assets, and settle debts.

If an executor has not been named in the will, or there is no will, an administrator must be appointed by obtaining a Grant of Letters of Administration.

What is the probate threshold?

You do not always need a Grant of Probate to deal with the estate of someone who has died, particularly if the assets in an estate do not meet the probate threshold.

This threshold refers to the amount of money in a bank account that a bank can release before being presented with a Grant of Probate. The threshold for probate in England and Wales can be anywhere between £5,000 and £50,000, because it has no legal basis. Instead, different banks and financial institutions have different probate thresholds according to their own rules and policies.

Unfortunately, this means there is no concrete figure to determine whether or not you need a grant of probate after valuing an estate. As a general rule of thumb, if the money within the estate is valued over £10,000, you will usually need a Grant of Probate to access bank accounts.

Figures show that around half of all estates in the UK require probate; however, probate thresholds are not the only reason why you may not need a Grant of Probate for estate administration. Other reasons you may not need to complete this step include:

• There are no solely owned assets in the estate. This means that all of the assets, such as property and bank accounts, were held jointly with someone who is still alive - whether a spouse, civil partner or someone else. All these assets will automatically pass to the surviving person.
• The estate consists only of cash and personal belongings that can be distributed without the need to access bank, building society or other accounts.

If you are concerned about probate and estate administration as an executor, seek advice from a solicitor on whether or not you need to apply for probate in order to fulfil your obligations.

What counts as a small estate?

Generally speaking, a small estate that does not require probate usually has no property and less than £5,000 in assets. In these cases, a Grant of Probate is unlikely to be needed.

Banks may still ask executors to complete a statutory declaration before they transfer any money, in order to confirm they are releasing the money to the correct person.

An expert probate solicitor will be able to inform you as to whether you need a Grant of Probate or not, and it is always worth getting legal advice if you are unsure. A solicitor can support you throughout the probate process to fulfil your obligations successfully and avoid the challenges that can emerge when disputes arise about the execution of a will.

How do you value an estate for probate?

Before applying for a Grant of Probate, executors will need to properly value the estate. This is important, because the executor must confirm whether or not they need to pay Inheritance Tax on the estate before probate can begin properly. Once the figure has been reported, the probate registry will be able to specify the value of the estate on the Grant of Probate. 

Executors need to compile a list of everything the deceased owned at the date of their death. The value of the estate will include:

• Property
• Land
• Cash
• Bank accounts
• Car(s)
• Stocks and shares
• Valuables (such as jewellery, art)
• Debt (including credit cards, mortgages, equity release)

The total value of the estate consists of all the assets owned by the deceased (as listed above), minus any tax liabilities or debts that must still be paid. Once executors have estimated how much the estate is worth, they need to include this calculation in their application for probate. If an estate does not require probate, its value will be such that no Inheritance Tax will be owed on the estate.