Probate is the legal process of proving that a last will and testament is valid, and the outcome, obtaining a ‘grant of probate’, a legal document, gives legal rights to the nominated executors to administer the deceased’s estate.
Probate might not always be required to manage the estate of someone who has died.
This article explains when probate isn’t necessary, which assets don’t pass through a Will, and what legal obligations continue even when probate isn’t needed.
Circumstances where probate isn't required for the deceased's estate
You can avoid the probate process in certain circumstances: if the deceased's assets have a low value; if assets are owned with someone else; and if what seems to be owned by the deceased person is actually not owned by them.
Small estates
Historically, obtaining probate was a necessary step for the distribution of the deceased's estate of every person who died leaving a Will. (If you don’t leave a Will the process is slightly different: personal representatives have to obtain ‘letters of administration’).
The reason is that when you die, your estate passes into trust automatically (even if your Will doesn’t mention trusts). Probate establishes those people you nominate as executors as the trustees of your estate.
Trustees have a legal obligation to ensure that each beneficiary receives the inheritance they are due, and they can be sued by beneficiaries if they make mistakes. Additionally, custodians of assets (such as banks) can be sued by beneficiaries if they transfer those assets to people other than the executors.
But because the Probate Registry was finding it difficult to process an increased number of applications for probate, the Administration of Estates (Small Payments) Act 1965 and Schedule 7 of the Building Societies Act 1986 were enacted to allow certain types of assets to be paid out to executors without a grant of probate provided the value of the assets was less than £5,000.
This £5,000 limit is known as the ‘small estates threshold’.
The executor or next of kin dealing with the administration simply has to sign a ‘small estate affidavit’.
Assets that can be distributed include:
cash in bank and building society accounts;
premium bonds and other National Savings products;
member deposits of trade unions;
cash in Friendly Society and Industrial or Provident Society accounts;
salary arrears or superannuation benefits owed by the government; and
pensions for employees of the police, fire service, Royal Air Force or Army.
Some financial organisations choose to set small estates thresholds at a higher level. Most high street banks and building societies will release cash assets below the value of £50,000. But these thresholds vary between financial institutions and UK regions.
In place of an affidavit, Scotland allows executors to sign a ‘small estate confirmation’ for estates up to £36,000.
Jointly owned assets
The principle of survivorship allows the deceased’s share of jointly owned assets to remain owned by the other surviving owners (often a spouse or a civil partner). They 'bypass' probate because they never form part of the estate.
Types of assets held jointly include joint bank accounts, property held under joint tenancy (for example, the family home), and shared vehicles.
You should check whether property ownership is as joint tenants or tenants in common. Depending on your wishes, one or the other may be necessary.
Assets with beneficiary designations
Assets with named beneficiaries, such as most pension plans, life insurance policies and payable-on-death bank accounts transfer directly to a designated person on the owner's death. Again, they don't form part of the estate because the policy holder does not own the assets, but rather has a right to income and capital resulting from them.
The most common of these are pension funds.
Pension scheme trustees should manage the transfer of funds to the named beneficiaries once the executors contact them. So when making a Will, it is important at the same time to check and update pension fund providers with who should benefit from these assets.
For example, if you designated your spouse as the beneficiary of your pension scheme when you set it up, but later divorce without updating the pension company, your ex-spouse would still automatically inherit the payout upon your death.
Assets held on trust
Assets held in a trust of which the deceased is a beneficiary bypass probate as the trust owns the assets, not the estate.
Trusts provide benefits: privacy, potential tax savings, and quicker distribution to beneficiaries. Asset preservation through trusts can safeguard wealth from creditors and provide for future generations.
While trusts offer significant benefits for asset protection and probate avoidance, they can be complex to establish and manage. You may need to weigh the costs of establishing a trust against the potential savings in probate fees and taxes.
Special circumstances that affect probate
There are a number of special circumstances that can affect the probate process, including:
Insolvent estates
If the deceased person’s estate is insolvent, meaning that their debts exceed their assets, probate can be more complex. In this case, the executor may need to apply for a grant of probate to release cash assets and settle debts.
High value or controlled personal possessions
Probate may not be required to deal with personal possessions, such as sentimental items or low-value assets. However, if the personal possessions are of high value or require special handling, the executor may need to obtain a grant.
Personal liability of the executor
In some cases, the executor or personal representative may be liable for the deceased person’s debts or taxes. In this case, probate can provide a level of protection for the executor and ensure that they are not held personally responsible for the deceased person’s liabilities.
How gifting assets can help avoid probate?
Gifting assets before death, such as property to children, decreases your estate's size, potentially avoiding probate.
Gifting can be an effective strategy for estate planning, letting you distribute assets during your lifetime and potentially reducing the value of your estate below the probate threshold.
What legal obligations remain when probate isn't required?
When probate isn’t needed, surviving relatives still have legal responsibilities to carry out.
Personal representatives must pay outstanding debts, pay tax obligations, and notify relevant authorities of the death.
If you distribute the estate’s assets without paying outstanding debts or tax liabilities, you could be held personally responsible for these unpaid amounts.
Death certificate
A death certificate is official proof of death for estate settlement purposes.
Banks, pension companies, and government agencies all require this document to process accounts and benefits.
Pension companies often require specific documentation, which may vary between providers, to process claims on behalf of an estate.
So you should request several certified copies of the certificate of death when registering it. Maintaining multiple copies - perhaps one for each major financial institution or organisation - can considerably reduce delays and streamline the administrative tasks you manage. Additional copies do cost extra, but you'll save a lot of time.
What documentation is needed for non-probate transfers?
To transfer assets without probate, you need specific documents: death certificates, proof of identity for the person requesting the assets, and proof of relationship to the deceased.
For jointly owned property, you'll need marriage or civil partnership certificates.
Joint bank accounts require account statements. For money owned by the deceased, the joint owner needs to present these documents to the relevant banks or financial institutions.
A small estates declaration and indemnity form may be necessary for some assets. This legal document indicates the estate's value and the claimant's entitlement to the assets. You can obtain these forms from banks, building societies, or the probate registry. Complete the form accurately, providing details about the deceased's estate and your relationship to them.
How long does it take to settle estates without probate?
Non-probate settlements typically take 2-6 weeks, while probate can take 6-12 months. The duration depends on the estate's complexity, financial institutions' cooperation, and document procurement speed.
For example, if you're settling your late spouse's small estate without probate, you might notify banks within a week, receive account closure confirmations in 3-4 weeks, and distribute assets to beneficiaries by the 6th week.
Delays in obtaining death certificates or responses from banks might extend this timeline.
The probate process, in comparison, includes additional legal steps and court oversight - which explains why it takes longer.
What are the potential risks of avoiding probate?
Avoiding probate when it’s necessary carries substantial risks.
You may incur personal liability for unpaid debts or taxes, encounter disputes with other potential beneficiaries, and experience difficulties in proving ownership of assets. These risks are particularly relevant when managing an insolvent estate or when intestacy rules apply.
If you distribute assets from an estate with substantial debts without using probate, you could be held personally liable for those debts if the estate is insolvent.