Probate and Estates
What is Probate?
When a person dies everything that person owns is referred to as their “estate”. If they made a will appointing an executor, it is the responsibility of the executor to administer the estate. If they die without a will their estate must be administered according to law. “Probate” is the name given to this area of legal practice.
A “Grant of Probate” is a legal document which issues from the Probate Office of the High Court. It is the executor’s formal authority to collect in all the assets of the deceased and to distribute them to the persons named in the will.
What is a personal representative?
“Personal representative” is another term for the executor, who is appointed by the will. Where there is no will, or if no executor is named, the closest living relative of the deceased may apply to the Probate Office to be appointed as personal representative. That person is called the administrator.
What are the duties of the executor?
The following are some of the duties of the personal representative:
- Protecting the assets of the estate and making sure that the property is insured.
- Obtaining a death certificate.
- Making a list of the property, valuables, bank accounts, shares and other assets and arranging for these to be valued.
- Finding out what debts must be paid including the funeral expenses and discharging these debts. Obtaining all the information that is necessary to obtain the Grant of Probate or letters of administration. This includes making a return to the Revenue Commissioners and swearing affidavits for the High Court.
- Once the Grant of representation is obtained, gathering in the assets, making the final tax returns and distributing the estate.
What legal issues are involved?
The following are examples of legal issues which can arise:
- Ascertaining that the will was validly made and that there is no ambiguity, for example identifying the beneficiaries.
- Title matters – i.e. locating the title deeds to property, and examining the type of ownership.
- Marital issues. Whether the deceased was divorced or separated, and advising on the legal rights of the spouse, partner or former spouse.
- Identifying whether there are sufficient liquid assets to discharge unpaid bills, taxes and immediate expenses such as the funeral bill.
- Whether any beneficiary is under the age of 18 or suffering from a mental disability.
- Where a beneficiary has died, identifying what happens to their inheritance.
- Where a farm or business was owned by the deceased taking action to protect these assets.
- Ensuring that all tax reliefs and exemptions are obtained and to advise the beneficiaries in relation to the Capital Acquisitions Tax that may be due.
- Where the executor is unsure as to the location of assets, searches through financial institutions may have to be made.
- Some parties may be disappointed by the terms of the will. Potential claims or legal challenges to the will may have to be considered.
- Property held jointly by the deceased and another may have to be advised upon.
- Trusts or implied trusts may be an issue.
- If the deceased had a State or Private pension this will need to be addressed.
- If the deceased held foreign assets or shares registered outside Ireland it may be necessary to obtain a Grant of Probate in the foreign jurisdiction.
Will there be Tax due?
Capital Acquisitions Tax is the tax charged on gifts and inheritances. Each beneficiary is allowed to take a tax free amount from the deceased’s estate. This is called the threshold amount. Any sum exceeding the threshold amount is taxed at a rate of 33%. There is no limit on how much a spouse may inherit.
There are many tax reliefs available, such as farm and business relief, and reliefs on property left to dependent relatives who live in the property. We can advise you on these reliefs.
What other taxes are involved?
There may be outstanding income tax returns to be made. There is no Capital Gains Tax (CGT) on a person’s assets on their death, however CGT may arise during the administration of the estate – for example if assets rise in value between the time of death and when they are sold. There is no Stamp Duty when transferring property from the deceased’s estate to a beneficiary. A purchaser of property from the estate pays Stamp Duty in the normal way.
Should I consult a solicitor?
It is the executor’s responsibility to identify from the outset any legal issues which may need to be dealt with. These are not always obvious and mistakes can result in a personal representative being held personally liable. Your solicitor will advise you on all steps to be taken and will be in a position to deal with any complexities. Your solicitor will attend to the considerable administrative detail involved from assembling date of death valuations, completing the Revenue and probate office forms and affidavits, through to collecting the assets, making tax returns, obtaining tax clearance certificates and ultimately arranging for the distribution of the estate and any relevant accounting to the personal representatives and beneficiaries.
How long does it take?
The length of time it takes to obtain the Grant of Probate/Administration and to distribute the estate to the beneficiaries varies from case to case. Normally it takes between four to six months to obtain a Grant of Probate, and another four to six months to complete the administration of the estate. In a minority of complex cases it can take longer.
What costs are involved?
The personal representative will be advised at the outset of the legal costs involved. These costs vary from case to case depending on the complexity of the estate and the amount of legal work which will have to be undertaken.