Article provided by Lynne Rowland, Partner at Moore Kingston Smith, for Beacon Gainer, private wealth advisory services group.
Probate applications are taking longer than they were Pre-coronavirus, leaving heirs and other dependants facing potential financial challenges.
Probate delays mean dependants are having to deal with making payments such as mortgage repayments or energy bills for the deceased out of their own pockets. If dependants decide to delay these payments until an estate has been administered then they may have to pay interest or late payment penalties on them.
Probate applications are now often taking several months. Grants of probate are needed to allow the executor of an estate to distribute money or assets. Without a grant of probate, this cannot happen, leaving the estate in limbo.
Probate delays can put heirs in a financial predicament. Dependents are having to choose between funding the costs of another home now or delay any payments and pick up a bigger bill further down the line due to any interest.
Executors can be held personally liable for any payments made from an estate before the grant of probate is obtained, so are sometimes reluctant to transfer funds to a beneficiary without the grant being in place.
A surge in probate applications made before a planned rise in fees last year, coupled with a move to digitalise the application process, created a large backlog. Coronavirus has made it harder to clear this backlog because many probate registry offices have been not working at full capacity due to staff absences and remote working practices.
In recent months, the probate registry has also changed the way it corresponds with applicants which is making it harder to follow up on applications. Whereas previously an applicant could speak to the probate registry dealing with their application, the system has now been centralised so the person to whom the applicant speaks may not know the reason for a delay.
The move to digitalise the process has helped to some extent, in that the applicant is now responsible for inputting the information onto the system. However, not everyone has access to the online system.
In some cases, banks are allowing executors to access cash from the deceased’s bank account without a grant of probate in order to pay bills. While this shows flexibility on behalf of the banks, the executors are personally liable to the estate for these funds. In accepting the money, they could expose themselves to significant personal financial liabilities.
The impact of delays in processing probate applications at a time of economic hardship that is predicted to follow the Coronavirus pandemic should not be underestimated.