Probate is not required if the deceased died intestate, that is, without a will. In that case, the applicable document is a letter of administration. When dealing with a simple or very small estate, it is very unlikely that a probate will be required. Other circumstances that do not require probate include:
1. Joint Properties
Suppose the deceased, during their lifetime, owned properties with another. In that case, the properties pass on to the other owner by operation of law, through the principle of survivorship. Areas of property ownership are sensitive, and it is essential to exercise caution when dealing with them.
For example, if the property owners were joint owners, the surviving co-owner inherits the other person’s share of the property without needing probate. However, if they were tenants in common, the surviving co-owner does not automatically inherit the deceased’s share of the property without probate or a letter of administration.
2. Joint Bank Accounts
Sometimes, couples share joint bank accounts or joint accounts with building societies. If one person dies, the money goes to the surviving partner without needing probate or a letter of administration. However, the bank may request to see the death certificate before transferring the money to the other joint owner.
3. Assets Held in Trust
Another situation that may not require probate is where the deceased’s assets are held in trust, not their personal capacity. The deceased may have placed their assets in trust by themselves as part of their asset preservation or tax planning strategy.
They may also be the beneficiary of a trust, entitling them to benefit from certain assets during their lifetime. In these circumstances, the trustees assume legal ownership of the assets held in trust and can sell, transfer or deal with the assets as they please.
4. Personal Possessions
Where the deceased left a will, the executor has the authority to deal with their personal possessions. But, if the deceased died intestate, their personal representative needs a grant of probate to deal with the deceased’s personal possessions.
In practice, however, the situation is determined by the perceived worth of the possessions in question. For example, the families of the deceased person do not need a grant of probate to deal with the sentimental items belonging to the deceased, like clothes, shoes, a watch, etc.
Suppose the personal possessions are of high value, like a house or car. In that case, the car dealership or auction house may demand authorisation that the personal relatives have the power to dispose of the property.
5. Insolvent Estates
A solvent estate is one where the value of the estate assets exceeds the liabilities, but an insolvent estate arises where the debts exceed the estate assets. Where the deceased left behind an insolvent estate, the relatives may wish to consider whether it is necessary to apply for a grant of probate in the first place.
The reason is that dealing with an insolvent estate is tricky. The surviving relatives may become personally liable to creditors if they do not adequately settle payments or do so in the proper order. It is often preferable for the creditors of the insolvent estate to apply for a grant of probate, asking the court to release cash assets and settle debts due to them and other creditors.
This way, the deceased’s relatives do not get involved and are exposed to risks. Above all, it is best to seek urgent legal advice when dealing with an insolvent estate.
6. Pension Payments
Pension payments typically fall outside the deceased’s estate for inheritance tax and distribution purposes. This implies that the executor or family members do not need a grant of probate to get the deceased’s pension benefit.
The release of these benefits is usually at the discretion of the pension scheme trustees. Suppose the deceased, before their death, did not leave instructions regarding who should benefit from the fund, or there is no clear information on who the next of kin is.
In that case, the pension company may decide to release the funds to personal representatives of the deceased’s estate. It is only in the circumstances like these that a grant of probate will be required.
So, it is important for pensioners, during their lifetime, to leave detailed instructions to the pension companies to avoid problems down the line.
To recap, you don t need probate in the following circumstances: Joint properties, Joint bank accounts, assets held in trust, personal possessions, insolvent estates, and pension payments. Feel free to leave a message for us or book a consultation if you need further legal guidance or advice.