Probate Applications during Covid-19
Covid-19 has had a significant impact on the process of obtaining a Grant of Probate in the estate of a person who has died in order to administer their estate.
A Grant of Probate is a document issued by the Probate Registry giving the executors named in the Will of a person who has died, the legal authority to administer their estate. If a person left no Will, then the people entitled to the estate are the next in line to apply for what is called a Grant of Letters of Administration.
Regardless of which type of Grant is needed, the process is largely similar requiring completion of an Inland Revenue account – an inventory of the estate assets and liabilities in effect. This will enable the executors and HMRC to calculate whether any inheritance tax is due as a result of the death and if so, part of that tax must be paid ‘up front’ when the application for the Grant is made. Once that tax bill has been, HMRC issue a receipt, which in turn allows the executors to apply to the Probate Registry for whichever Grant they require. Incidentally, the remainder of the tax is usually payable around 6 months later and can be postponed to be paid by ten annual instalments if the executors and beneficiaries prefer this. This means that it isn’t always necessary to have to sell property in order to pay the tax bill, which is helpful to families wanting to keep the family home, for example.
Once the Grant has been issued, the executors can then sell property, close accounts, and pay debts before making distributions to the people entitled to receive the estate.
As a probate practitioner, I can report it has been a painful journey, navigating through a new and improved online probate application process at a time when tragically, deaths as a result of the pandemic have increased significantly. This has put a lot of pressure on the Probate Registry.
The days of advising clients of a wait of 7-10 working days to receive the Grant seem like a distant memory and we are now waiting anything from 1-3 months, more so in an estate where inheritance tax is payable.
The good news is that the Probate Registry and HMRC have taken steps to make the process a little easier in the light of the practical difficulties arising from the pandemic restrictions.
- Both will now accept electronic signatures on the probate application forms and the Inland Revenue accounts, which makes a lot of sense given electronic capabilities and avoids the need to circulate a document between several executors at different addresses, which could take weeks.
- Applications for Grants are now made online through the Probate Registry’s portal and updates can be found by checking the portal after submission. Enquiries are sent by email so can be responded to the same day meaning much quicker turnaround times where additional information might be needed to process an application. It is still necessary to send paperwork after the online submission has been made – including the original Will, if there is one – but it is reassuring to know that the account has been opened already, so to speak.
The Stamp Duty Land Tax (SDLT) incentives offered by the Government through the pandemic has boosted the property market without question, but the knock-on effect is that there are horrendous delays in processing by the Land Registry. The reason is that social distancing measures has meant a reduced workforce and so there simply aren’t enough people to keep up with the demand at the moment. Hopefully, this will improve, and the backlog can be reduced but beneficiaries waiting for properties to be transferred to them are looking at 4-6 months, possibly more. If property is to be sold, the pressure on conveyancers trying to cope with the demands of buyers frantically trying to complete before the SDLT incentive deadlines, has also created a log jam.
Introducing the above changes is a positive step, but at a time when many are struggling to cope with the impact of social distancing restrictions in the workplace caused by Covid-19, the pressures on the court system and other Government agencies is very apparent.
If you have any questions about matters covered in this article, please contact Clare Young on 07802 618 132 or at clare.young@legalstudio.co.uk