Tens of thousands of bereaved families who have lost loved ones to coronavirus are dealing with the financial procedures that follow a death – called probate – but are encountering a system hit by delays and bureaucracy.
It usually takes about three to four months to sort out probate, which is essentially identifying the dead person’s assets, paying off any debts and sharing out the remaining estate according to the will.
Solicitors are warning, however, that even simple estates are taking months longer than normal to sort out. At the height of lockdown some solicitors were unable to access their offices to get physical wills, while obtaining details of bank accounts and investments has been fraught with delays.
Homes and other properties that belonged to the deceased have to be valued. A professional surveyor, not just an estate agent’s estimate, is usually required if there’s a chance the estate may fall into the inheritance tax (IHT) bracket. During lockdown, physical valuations were almost completely suspended.
The result is that the number of applications for grants of probate to HM Courts & Tribunals Service (HMCTS), rather than rising as might be expected because of coronavirus deaths, has plummeted by 50% since the lockdown began, according to reports in the UK Law Gazette.
Chris Burrows, a partner at the Manchester law firm Glaisyers, says: “There are delays across almost all aspects of probate.”
When coronavirus struck, the government moved to address the problems with registering a death, such as letting a GP certify a death without physically attending.
Tax and legal authorities have streamlined matters. According to the Society of Trust and Estate Practitioners (Step), HMCTS is accepting electronic signatures on the IHT forms and has replaced affidavits with statements of truth that can be signed electronically.
HMRC is accepting electronic signatures on the IHT forms and payment is being accepted by bank transfer rather than cheque. But HMRC’s inheritance tax deadlines have remained in place: IHT is due six months after the end of the month in which the death occurs. There is an option to pay by instalments (at a 10th of the liability), with the first due by the six-month date.
But a property cannot be sold, and the money distributed, until a formal grant is issued. Phoebe Tranter, who handles probate at solicitors Lawson-West in Leicester, says last year there were long delays at the the probate registry, the part of the HMCTS that issues these grants. This improved by the end of 2019 – but went into another tailspin when coronavirus struck.
She says some banks have been brilliant during the crisis, while others have taken longer to deal with paperwork.
Guardian Money approached HMCTS for figures on probate times but it said these are issued only quarterly and the next data release will not be until later in June.
How to deal with a will and estate
1. Find the will
Once somebody’s death has been registered and their funeral arranged, the first thing to do is locate the person’s will (or confirm they did not make one).
If you cannot find one in their home, contact the person’s solicitor, accountant or bank to see if any of them holds it. You can check whether a will is stored with the Principal Registry of the Family Division. Ask for a search to be made of the safe custody wills register.
2. Contact banks and other financial providers
The executors named in the will, or the people who will inherit if there is no will (called intestacy), should start assembling the financial information.
You should notify banks, building societies, mortgage lenders, credit card providers and insurance companies. Your first step should be the deathnotificationservice.co.uk, which allows you to notify several banks and building societies of a person’s death at the same time.
Then go to the Tell Us Once service, which lets you report a death to most government organisations in one go. You will be able to notify HMRC, DWP, DVLA, the Passport Office and so on in a few clicks.
Co-op Legal Services this week also launched a bereavement notification service, which apart from help in notifying banks also gives guidance on closing social media accounts and informing utility and insurance providers.
3. Estimate and report the estate’s value
The executor needs to assess the amount in savings accounts, pensions, shares and Isas, and whether the dead person’s employer owed them wages. Debts such as credit cards must be paid off. If the mortgage lender requires interest payments to continue while you are applying for probate, the executor can pay these bills and reclaim the money from the estate once they have obtained probate. The executor should check if there are any payouts from life insurance policies.
4. Begin the formal probate process
The executor should apply for a grant of probate, which is the legal document that enables you to access funds, sort finances and share out assets the deceased accumulated.
The government website gov.uk/applying-for-probate sets out the process and whether you actually have to go through it. According to Step, in England and Wales, there is usually no need to apply for probate if the estate is worth less than £5,000. There is an application fee of £155 for estates over the £5,000 threshold, with a £60 fee added if you apply yourself rather than via a solicitor.
Assuming you have obtained an estimate of the estate’s value, and you have the original will and death certificate, you can begin the probate process online.
5. Decide whether to use a solicitor, probate brokerage or do it yourself
You are under no obligation to use a solicitor but if you do, don’t automatically sign up with the family firm, or the bank, as the charges can be high. Most firms operate hourly rates or percentage charging systems.
Law firms are required to disclose their fees online.
Probate brokerages, such as Final Duties, will find you a solicitor from its approved panel that will undertake probate for a fixed fee.
Or you can do it yourself. If you want legal help without paying too much, Which? Legal provides a probate service that promises unlimited advice and support from its experts at £9 a month, plus a £28 joining fee.