Probate and letters of administration may be looked upon as title documents to the assets of the deceased person’s estate and they are therefore usually required whenever it is necessary to show ownership of the assets. However, there are a few assets and situations where, for one reason or another, they are not required and are dispensed with. These include nominated assets, jointly owned assets owned beneficially as joint tenants, estates of small value and estates which consist entirely of personal effects and/or personal currency. Even in these cases there is sometimes a requirement to submit an account to HMRC to show that no inheritance tax is payable on the death, such as a tax liability resulting from gifts made in the seven years which preceded the death.
Nominated assets
Several Acts of Parliament authorised those who deposited money with various organisations, such as National Savings and Friendly Societies, to ‘nominate’ people to receive the deposits on the depositor’s death. Since 1981 it has not been possible to make new nominations but any nominations which were then in existence and have not been revoked by the death of the beneficiary, the marriage of the nominator or the signing of a special form of revocation are still effective.
Such nominations are not affected by or overridden by provisions of a will and are payable directly to the beneficiary upon production of a death certificate. They are not payable to the personal representative of a deceased person’s estate and consequently no grant of representation is necessary to collect them but their value must be included in the Revenue Account for inheritance tax purposes.
Jointly owned property
Jointly owned property are assets not in the sole name of the deceased.
There are two ways of owning property jointly in English law – as joint tenants or as tenants in common. The use of the word ‘tenants’ has nothing to do with tenants in the sense if landlord and tenant; it is merely the same word used as a technical term to signify a different concept.
If people own property as joint tenants the law states that one the death of one joint owner, the person’s share of the jointly owned property does not become part of his estate (except for IHT purposes), does not fall to be dealt with by his personal representatives and is inherited by the surviving joint owners regardless of the terms of his will or the circumstances of his intestacy. On the other hand if people own property as tenants in common, the law states that on the death of one joint owner that person’s share of the jointly owned property does become part of his estate, falls to be dealt with by his personal representatives and is inherited as provided for in his will, if there is one, or if none, then by his next of kin in accordance to intestacy rules.
It follows that if property is owned as joint tenants, all that is necessary for the survivor to prove a right deal with the property and to inherit it, is to produce satisfactory evidence of death, such as a death certificate or an order of the court giving leave to presume death. However, if property is owned as tenants in common, the person claiming the right to deal with the deceased’s share as executor of a will must prove that he is the executor appointed by a valid will or codicil by producing the grant of probate and if there is no will, or a will but no surviving executor appointed or willing to prove it, letters of administration must be produced to prove the admistrator’s right to deal with the estate.
How does one know whether jointly owned property is held as joint tenants or tenants in common? Usually jointly owned bank and building society accounts and stocks and shares are held in joint tenancies, but if there is any evidence to show that the joint owners owned separate shares of property (such as unequal sharing of rents, interests or dividends) as opposed to each joint owner owning the entirety, the joint ownership is a case of tenancies in common. Joint tenants always own the asset equally and words indicating that the joint owners own unequally always means tenants in common. Partnerships almost invariably own property as tenants in common. When husbands and wives own property jointly they usually, but not necessarily, do so as joint tenants and not tenants in common.
Estates valued under £15,000 gross
If the value of the estate before deducting the cost of the funeral and any debts left by the deceased is under £15,000, it is frequently worth writing to the organisation, for example, the bank or building society which holds the assets, to ask that it makes payment to the personal representative without the expense of obtaining a grant of representation and what its requirements are to enable this to be done.
Usually, provided there is not more than £5,000 (and sometimes £15,000) with a particular organisation, it will make payment to those entitled in return for the sight of the original will, if any, or if there is no will, in return for a short statement as to the identity and relationship of the next of kin and the signing before a solicitor, of a short form of indemnity which the organisation will prepare.