It can take up to 12 months to obtain a Grant of Probate. This is both confirmation of the validity of the Will and the authority of the Court to the Executors to deal with all your property once you have gone, including bank/building society accounts. In a complicated case it might take even longer. That said, Probate is not required in every case. For example, if your only possessions are an interest in your home and/or bank accounts which you own as ‘joint tenants’ (see below) with your spouse/civil partner, Probate is unlikely to be required, as your interest will pass to the survivor by operation of law. Each bank or building society has its own upper limit which it will transfer without sight of a Grant of Probate. Your Executors should check with any relevant financial institution (or other regulator of ownership) whether they need to see a Grant of Probate before they will register the change of ownership.
But assume that Probate will be required. I am thinking of the situation where you are in a marriage or civil partnership and one of you at least is not in a position of ‘financial liquidity’. And, indeed where you might be living with someone to whom you are neither married nor in a civil partnership (so, without the protection of the exemption from Inheritance Tax on the first death). The question then arises: ‘How is the survivor to access
cash for daily living expenses until the grant of probate?’
There are two types of joint ownership:
– a ‘joint tenancy’ under which each joint tenant has an equal share. On the death of any joint tenant his/her share passes automatically ‘by operation of law’ to the surviving joint tenant(s) and if more than one in equal shares.
– a ‘tenancy in common’ under which the share of any so-called ‘tenant in common’ is an asset owned which can be specifically given by Will or indeed by lifetime gift. Shares under a tenancy in common can be unequal.
In either case, the value of the interest in the property is an asset, the value of which must be ascertained and included for probate purposes. Of course, if the survivor is a spouse or civil partner of the deceased, there will be an exemption from Inheritance Tax.
So, given that you never know who is going to go first, the simplest thing to do is for the ‘richer’ one to create a joint bank/building society account on which either of you can draw now (and the survivor after the first death), with enough money in it from time to time to last from death until probate is granted. Some couples will be doing this anyway, perhaps blissfully unaware of the advantages on the first death. But for all couples in appropriate circumstances it is something well worth thinking about. And then, following the first death, production to the bank/building society of the Death Certificate (for which see next week’s Posting) will make the previous joint account a sole account in the survivor’s name.
There’s another important, non-financial, point. If you have an ‘other half’, you could be thinking about how the survivor would manage if one of you goes. This might range from cooking or managing the home or garden to paying the household bills or handling the family finances. If you are accustomed to a division of responsibilities in any of these areas, it might be worth considering a degree of sharing and indeed some tuition (both of which could be quite fun) to help prepare the survivor.
