How Long Can An Executor Hold Money After Probate?
The application of probate is the easy part. The wait for money, on the other hand, can be painfully long. The duration depends on the size and complexity of the estate to be shared. Typically it can take between 6 to 12 months. The costs for probate can be met from the estate. If it is a contentious probate, it can take even longer. For instance, some assets might be tied overseas. In some cases, there might be a property that has to be sold. In addition, the estate itself might also be entangled in legal issues that need solving before distribution. All these factors make it difficult to have a fixed waiting period. The estate administration process can take a long time, which is naturally frustrating for everyone involved. If you’re the executor of a large estate, you might hear this question a lot, phrased in different ways. However, timings do depend on how complex the estate is, and whether anything unexpected happens during the estate administration process. There are a lot of things that can have an impact on what happens after probate has been granted.
Here are some reasons the estate might take longer than usual to settle:
• Some assets are held abroad
• The executor is unable to contact all of the beneficiaries of the will
• There is property to be sold
• Important legal paperwork, such as share certificates or deeds, has gone missing
• The Department for Work and Pensions needs to investigate the estate
• The estate is bankrupt
• The will is challenged
The Probate Process
There are two main steps to the Probate process in Utah
1. Obtaining a Grant of Probate or Letters of Administration
2. Administering the Estate.
Only once both of these things have been done can the Executors or Administrators distribute the deceased person’s Estate to their beneficiaries.
Generally obtaining a Grant of Probate will take around 3 months. It involves submitting an application to the Probate Registry. This application must include:
• A PA1 form
• The Will and three copies (if applicable)
• An Inheritance Tax form
• An official copy of the death certificate
• The Probate Registry fee.
If the Probate Registry is satisfied that everything has been completed properly, it will issue a Grant of Probate or a Grant of Letters of Administration if there is no Will. Once this has been issued, the Executor or Administrator can move on to the next step of the process: administering the Estate.
Administering the Estate
The ‘Estate’ is the collective term for everything the deceased person owned, such as property, money in the bank, personal possessions, vehicles and investments. All of these things will need to be officially administered according to the law in Utah. This will involve:
• Advertising for creditors (not mandatory)
• Gathering in the assets e.g. closing down bank accounts
• Transferring assets e.g. share holdings
• Selling or transferring property
• Preparing Estate accounts.
It’s difficult to say exactly how long all of this will take, as it will depend entirely on what type of assets the deceased person owned. For example, if the deceased person owned a property in their sole name, it will either need to be sold or transferred into the name of someone else. It’s impossible to know how quickly this will happen, especially if the property is to be sold.
But for more complex Estates, it may be a year or more before the funds are distributed. Issues that can delay payments to beneficiaries include:
• Foreign assets
• Missing beneficiaries
• Lost share certificates or property deeds
• Investigations by the Department of Work & Pensions
• The Will being challenged.
Both grant of probate lasting power of attorney are important documents that allow a representative to act on behalf of the deceased. A grant of probate is also referred to as a grant of representation and has to be obtained before any assets of the deceased’s estate can be collected by the executor. A lasting power of attorney is a document that is issued and in force during the deceased’s lifetime granting a relative the power to administer his or her financial affairs in the event of mental incapacity. If the deceased arranged estate planning during his or her lifetime there will in all likelihood be a will. This is a legal document that categorically states what the deceased wanted to happen to any assets after death and is the only reliable way to determine who receives them. The wording of a will must be indisputable and the document must have been correctly signed before witnesses. In addition, estate planning allows you to think about the consequences of inheritance tax being paid on your estate. Therefore, advance planning allows you to mitigate the amount of tax that is paid after you have gone.
When someone passes on, their next of kin are obligated to apply for a grant of probate. Once they have sworn the oath, it gives them a legal responsibility to handle or manage any property, assets, and cash possessions left behind. This is commonly referred to as estate administration. The person who receives this mandate is called the executor. Besides managing the estate, the executor is tasked with tying all loose ends on behalf of the deceased. This means paying debts, paying taxes, collecting owed funds, keeping tabs on estate accounts, and distributing assets according to the will.
Processes involved in Executing Probate
• Collecting the Assets: Your first action as the executor is to collect all the assets of the deceased. This might include liquidating some assets for easier sharing.
• Paying Debts: The executor is also in charge of paying debts starting from the funeral costs to impending taxes. If this duty befalls you, make sure to consult with an accountant if there are any pending tax returns to be paid. The inheritance tax, which should be paid six months before probate, is often forgone by most people.
• Dealing with Capital Gains Tax: Capital gains tax accrue from the sale of an inherited estate. Usually, beneficiaries receive the property at probate value. If they choose to sell it, they’ll pay capital gains on any increase in value from the time of death to the time of sale.
• Distributing the Assets: A huge step in estate administration is distributing the assets to the next of kin. It is often marred with conflict especially when the deceased never wrote a will. If that is the case, the state assumes the role of distribution of the estate on the rules of intestacy. If there is a Will, however, the executor can use it to share the property with the help of attorneys.
Legal Complexities and Timeframes
What has been noted so far is, essentially, a set of administrative challenges which affect the timeframes of each individual Estate. As would be expected though, there are also legal stages that need to be completed before distributions can be made. This is the case even if an Estate has obtained the Grant of Probate and holds sufficient cash.
These stages include (but are not exclusive to):
• Expiration of the statutory advertisements which are placed in newspapers informing creditors and other people of the death. These expire two months from the date of placing the advert.
• Inheritance act claims period, within which someone can make a claim against the Estate. This period expires six month after the date of Probate.
• Department for Work and Pension investigations and claims against the Estate. Once the Estate has been notified of such investigations, there is no timeframe for these concluding and these can take anything from a few months to a few years in extreme situations.
Planning Ahead and Minimizing Timeframes
As with anything in life, with some forward thinking, overall timeframes can often be reduced. Such steps can include:
• Preparing the paperwork for banks and other institutions while waiting for the Grant of Probate. This might include completing and signing bank closure forms or other documents.
• Clearing and marketing the property before the Grant of Probate has been received. In addition, offers can be accepted before the Grant has been received so conveyances can be instructed and the sale process can begin. However, contracts cannot be exchanged until the Grant has been received.
• If statutory advertisements are being placed in newspapers, then these should be placed as soon as possible so that you don’t have to wait for them to expire before making distributions.
• Complete and return all forms and provide all requested documents as soon as possible. Any delays in providing this information can cause delays in funds being distributed.
A Grant of Probate allows the executor to access the funds and bank accounts of the deceased. In simple estate cases, the deceased may only have a single account, but with every institution having its own process for allowing access, transferring money and closing the account, this can reasonably take around four weeks. It is not as simple, for example, as transferring money straight from the deceased’s account into your own. The people dealing with the estate might have to open a new account to collect the estate together before distributing it. This is the best case scenario. More often than not, the deceased has multiple accounts or other, more complex, financial assets. As such, the time it takes to access and collect the deceased’s money can take months, depending on the scale of the administration required, and we haven’t even mentioned property yet. If the estate owns one or more properties, they may need to be sold before any money can be distributed to beneficiaries and this can take a prolonged amount of time. Even if you’re only expecting a small inheritance that could be covered by the money collected from the deceased’s accounts, you may still have to wait, as the estate’s liabilities (such as debts) need to be paid before beneficiaries. For example, an estate may have collected $10,000 from the deceased’s account, and you may be entitled to $1000, while estate liabilities may require $15,000. In this instance, the house would need to be sold in order to pay off the liabilities before you can receive your inheritance. Alongside the general complexities of an estate, there are a number of legal considerations that can result in a solicitor holding the estate’s money for an extended time after probate.
Three of the most common considerations are:
• Advertisements for Creditors: It is important to understand that the personal representative administering the estate (whether as an executor or administrator) is legally responsible for the estate. This means if the estate owes creditors and fails to pay these debts, the personal representative is liable. For that reason, the solicitor administering the estate, whether as or on behalf of the personal representative, has to take steps to protect themselves or their client from liability. One of the ways they do this is by placing an advert in local media and The Gazette to give creditors a chance to make a claim. A minimum of two months needs to be provided for creditors to come forward. Debts don’t go away if not claimed within two months but the creditor would have to claim against the beneficiaries if that have received the assets before the creditor made their claim. Therefore, it can be safe for the beneficiaries if the executors keep hold of money to pay debts until reasonably sure they have identified everything.
• Investigations by the State of Utah or the Court or another government agency may wish to make an investigation into any benefits the deceased may have been in receipt of. An estate will be made aware of these investigations, but there is no exact timeframe on how long this should take to complete. As such, this type of investigation can take anything from a few months to, in extreme cases, a few years.
• Inheritance Tax: If Inheritance Tax needs to be paid it can take months or even years for HMRC to check the values submitted and calculate the tax due. The estate will need to make sure it has kept enough money back to pay the tax until HMRC has agreed with the values. Under the Inheritance (Provision for Family & Dependents), a will can be challenged if it does not provide reasonable financial provision. So, for example, if a man excluded his wife from his will entirely, she may be able to make a successful claim against the estate. As this type of inheritance act must be made within six months of probate being granted, solicitors often hold onto money owned by the estate until this time-period has elapsed. This ensures the estate has the assets required should an inheritance act arise. For beneficiaries waiting for their inheritance, this can be a frustrating time but it is a necessary one to ensure the estate can be distributed properly.
Utah Probate Lawyer
When you need legal help with a Utah Probate, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506