‘Unless an estate is very small or simple, the grant of probate is essential for families after the death of a loved one. Without it, the executors of a will (or personal representatives if there is no will) have no legal authority to deal with the deceased person’s assets,’ says Laura Tustin, Probate Advisor with QualitySolicitors Parkinson Wright. ‘Bereaved families may be stuck in limbo, unable to receive their rightful inheritance and move on with their lives.’
Very often solicitors are blamed for the delays in the probate process, leading to client complaints, however many factors are outside of their control. Laura highlights some of the many issues which can cause delay in the administration of an estate.
Delays in obtaining grant of probate
Staff shortages and a backlog of cases within the probate service (part of HM Courts & Tribunals Service) have worsened since the Covid-19 pandemic. This has been exacerbated by the move away from applications being submitted to experienced local probate registry teams to a centralised system.
Delays with HMRC
Stringent HM Revenues & Customs (HMRC) reporting requirements and ongoing problems for tax payers trying to get through to the HMRC helpline have also added to delays. Tax may be payable at the following points:
- inheritance tax should be paid within six months of a death;
- income tax may be payable on assets which continue to generate income after the death until they have been transferred or sold; and
- capital gains tax may also be payable on assets which have gone up in value since the person died or since being valued for inheritance tax.
If inheritance tax is not paid within six months of a death, HMRC charges interest at an annual rate of 7.5%. A grant of probate cannot be obtained without inheritance tax being paid, so in the past – unless there was enough money available in the deceased’s bank account to transfer under the Direct Payment Scheme or by liquidising some investments – many were forced to take out a loan to cover the inheritance tax bill, counting on the fact that they can recoup this cash through selling estate assets once probate is granted.
It is possible for personal representatives to obtain a ‘grant on credit’ - meaning they can administer the estate and access funds before inheritance tax is paid – if they find it impossible to raise the funds required to pay the inheritance tax bill. This will only be granted, however, if they can show HMRC that they have made a very practical effort to raise the money; HMRC’s guidance also makes it clear that they will only issue such a grant in ‘exceptional circumstances’. The spring budget removed the requirement to have sought a loan to pay the tax, but it is unclear as yet if HMRC will be willing to allow more of these grants on credit.
Once final tax calculations for income and capital gains tax have been submitted to HMRC, along with a final payment, the executors will have to wait for confirmation from HMRC that everything is in order before the final accounts can be agreed. This final confirmation is reportedly taking between 6 and 12 months, while HMRC delays in finalising income tax and capital gains tax requirements can also result in late payment penalties or interest charges, as well as executors missing deadlines for tax advantages.
Impact on property sales
One of the most profound impacts of the probate delays is linked to inheritance tax and property sales.
Although estate assets, such as a property, can be marketed during the probate application process, none can be sold until probate is actually granted. Delays in the probate process therefore, mean that people are faced with mounting interest charges from HMRC or a loan company while they wait for probate to be granted.
Mistakes by inexperienced executors
Delays can also arise when inexperienced executors do not seek expert legal advice and fail to follow the correct process for applying for probate.
Problems and delays can also arise where disputes break out between the executors, creditors, beneficiaries or HMRC. For example, if incorrect inheritance tax figures were stated.
Sometimes the probate service requires more information before probate can be granted. This may be because key documents are missing, further confirmation may be required that the correct documents have been sent in, or more information is needed about the signing of the will. Alternatively, there may be defects in the application itself, such as the beneficiary names on the application not exactly matching those listed in the will.
Challenges for executors
Sometimes delays arise which are outside of everyone’s control. A solicitor frequently has to grapple with problems such as:
- issues with the will;
- a reluctant or deceased executor;
- difficulties tracing a beneficiary;
- third-party agency delays – such as with financial institutions or valuers;
- inheritance tax complications; and
- disputes among beneficiaries or other family members.
All of these take time to sort out and can add to the costs of the probate process through no fault of the solicitor.
How we can help
Our team of specialist solicitors can help ease the enormous and time-consuming pressure that is placed on an executor. They will manage the entire probate process in the correct order, ensuring that all the forms are filled out correctly and gather all the documents needed to submit with the probate application.
They can intervene if disputes are holding up the process, regularly check the progress of the application with the probate service, negotiate with HMRC where needed, and help you avoid any of the many pitfalls which can hold up a grant of probate process.
For further information, please contact Laura Tustin or a member of the Probate Team on 01905 721600 or via email worcester@parkinsonwright.co.uk
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.