If you’re due to inherit valuable heirlooms, you’ll be tasked with deciding what to do with them while dealing with probate. But, how exactly does probate work and what does it mean for your family’s prized possessions?

When a loved one passes away, the emotional burden isn’t the only thing you’ll have to contend with. There are also plenty of practical arrangements which need to be sorted in the event of someone’s death, including the process of administering their estate and possessions – something which is referred to as probate.

Naturally, that will often include handling family heirlooms, including original artwork, and deciding on what to do with them in the future, avoiding instances of contentious probate wherever possible!

Here, we discuss everything you might need to know about probate, what the process might mean for your family, and how it could affect what happens to your family’s heirlooms in the future.



What is Probate?

As we’ve previously touched on, probate relates to the entire process of administrating the estate of someone who has passed away. This involves organising their money, property, assets and possessions (family heirlooms such as original artwork or sculptures included), distributing them as appropriate. This process occurs after taxes, including Inheritance Tax, and debts are paid off.

If the deceased leaves a Will before they pass away, this can make the process much simpler. Wills normally name a person who will administer their estate, known as the ‘executor’ of the Will.

What is ‘Grant of Probate’?

Before someone is able to start the probate process, they’ll need to apply for a ‘Grant of Probate’. This is a legal document that gives the executor the legal authority to deal with the deceased’s estate, including family heirlooms or prized possessions.

To be granted probate, various steps need to be taken first, including:

• Registering the death
• Valuing the estate
• Filing probate applications
• Filing inheritance tax forms
• Paying probate fees
• Paying Inheritance Tax

How is the Value of an Estate Calculated?

To provide an accurate valuation of an estate, the executor is required to go through the deceased papers and bank statements to get a full picture of what assets they own and their liabilities.

Of course, this process will be more straightforward for some estates than others. For people with complex investments across a variety of platforms, and very valuable personal belongings, it can take a long time to reach an accurate assessment.

Where an estate includes valuable heirlooms like art, sculptures or jewellery, the picture can become even more muddled and will require the input of an independent third party.

It may also be necessary to contact various institutions who can provide a clearer idea as to how much a person’s estate is worth. This may include:

• Banks
• Mortgage lenders
• Pension providers
• HMRC
• Fund managers

It will also be necessary to value any property left behind. This can be done independently, but if Inheritance Tax is due, it makes be sensible to work with an estate agent or surveyor who can carry out negotiations if the valuation is considered too low.



What Happens If There is No Will?

It isn’t possible to get a Grant of Probate if there is no Will, but it is still possible to administer the estate and distribute it through a slightly different process.

When someone dies without making a Will, the rules of intestacy set out who is able to administer the estate with a Grant of Administration. Under these rules, online spouses, civil partners, children and close relatives can inherit.

So, if there are any important family heirlooms or artwork which you would like to inherit, you can only do so if this is specified in a Will, or you are listed as a close relative under the rules of intestacy. This is especially important to know if you think that they could be worth a pretty penny!

Can You Use a Family Heirloom to Reduce Your Inheritance Tax Bill?

One of the biggest issues facing the executor of an estate is having to deal with Inheritance Tax. Simply put, Inheritance Tax is a tax on the estate (the property, money and possessions) of someone who has died.

Inheritance Tax isn’t usually paid if the value of the estate is below £325,000, or everything above this figure is left to a spouse, civil partner or charity.

The standard Inheritance Tax rate is 40 percent, which demonstrates just how costly it can be, especially for anyone who is otherwise unprepared to be hit with such a bill. But could your family heirlooms come in handy at this juncture? Potentially.

The Acceptance in Lieu scheme has been designed to preserve important assets of ‘national significance’ for the public benefit. It offers a significant tax discount on heirlooms that meet criteria set out by HMRC, and after specialist advice has been given by independent experts.

There have been a number of prominent examples of this scheme being used to reduce an Inheritance Tax bill. The family of politician Tony Benn donated an extensive collection of documents and recordings to the British Library to settle his Inheritance Tax bill, while Margaret Thatcher’s family gave her archive, reducing their tax bill by over £1 million.

Not just any family heirloom will be accepted to reduce a tax bill. For example, if it is a piece of original art, it needs to be considered of pre-eminent importance on the basis of their national, scientific, historic or, unsurprisingly, artistic interest.

The independent experts responsible for assessing an object will seek further advice from museum curators, scholars and members of the art trade before making a further recommendation to the Secretary of State for Culture Media and Sport.



Are You Set to Act as the Executor of an Estate?

In this post, we’ve discussed some of the most important things you need to know about the process involved in probate. We’ve also explored how it could relate to the family heirlooms you may end up handling as an executor of an estate.

Have you ever had to execute an estate in the past? Or are you set to act as an executor when a family member passes away? If you have any further thoughts, feel free to leave them in the comments below!

Please be advised that this article is for general informational purposes only, and should not be used as a substitute for advice from a trained legal professional. Be sure to consult a legal professional if you’re seeking advice around Wills, probate, or executing estate. We are not liable for risks or issues associated with using or acting upon the information on this site.

Photo credits:
Photo 1 – Carlos Esteves via Unsplash
Photo 2 – Cytonn Photography via Unsplash
Photo 3 – Gabrielle Henderson via Unsplash