When a loved one dies, their wishes can sometimes seem obvious to family and friends. For example, it is common for parents to wish to leave their estate between their children.
It can be frustrating when you find the process of receiving an inheritance can take months or even years to complete, even when it’s being administered by a solicitor.
So just how long a solicitor can hold money after probate?
In this article, we’re going to explore this question, looking at some of the common reasons that delay inheritances being passed on.
What is Probate?
If you’re not familiar with the probate process, it can be difficult to understand why your inheritance isn’t passed on immediately following the death of a loved one.
However, it is important to understand that a will is not just a collection of wishes, it is a legal document that must be dealt with using a legal process. This is called probate and, simply, refers to the process for the people named as executors in the will or allowed by law to take legal control of the deceased’s assets and estate.
This process exists in order to protect the integrity of a will (or the rules of intestacy if no will exists) and ensure the estate is administered fairly to all beneficiaries.
Before the estate can be distributed, it can take several months for the people in charge of the estate to obtain a Grant of Probate allowing them to access the money and assets of the person who has died.
The result is that, even for a simple estate, it’s likely to take three to six months for funds to be distributed after probate has been granted.
For more complex estates, it can take even longer.
Why Does Probate Take so Long?
When looking at exactly why solicitors hold money for so long after probate, it’s best to look at two things: estate complexity and legal issues.
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.
This is just one way the complexities of estate management can result in a time-consuming process. There are many more. Shares in a business, assets held abroad and missing beneficiaries can all result in a solicitor having to hold money for longer.
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:
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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 Department of Work & Pensions
In some cases, the Department of Work & Pensions (DWP) 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.
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 & Dependants) Act 1975, 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 claim 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.
How Long Can a Solicitor Hold Money After Probate?
There is no general answer to this question. To answer it, we would need to know much more about your specific case.
What we can say is that there are a number of reasons a solicitor may need to hold money after probate has been granted, whether that be because the estate is particularly complex or because of the legal steps they must take.
As a rule of thumb, it is wise to expect to wait a minimum of six months from when probate is granted to receive money from the estate, though it is not uncommon to have to wait longer.Back
Chris is head of the firm's Private Client department. He is a qualified Trust and Estate Practitioner who helps clients to face a variety of challenges, including managing their assets and estates.
Chris Burrows - Head of Private Client
To discuss how Glaisyers can assist you contact Chris Burrows on Chris.Burrows@glaisyers.com or via 0161 832 4666.