When we try to work out how to distribute money to people during the probate process, it can get complicated.
There is a strict, specific order for dealing with the estate of a deceased person. In many cases, it can take months before a grant of probate is given, which is needed for money to be given to beneficiaries.
With this in mind let’s take a proper look at who gets paid first during probate.
Paying All Costs
Before we can distribute in a state, the executors of the estate have to pay off any of the debts that the deceased incurred first. This includes things like the funeral costs, utility bills, and any tax that is owed on the estate.
These debts always have to come first, because they are legally required. Inheritance tax, for example, must be paid to HMRC before any money is given to people listed in the will.
From there, the next thing that has to be paid is the pecuniary legacies. These are specific amounts of money that are given as gifts. In some cases, you may also find that jewellery has been given as a gift, or another specific item.
What is left over is called the residuary estate. This is paid out last in the process, and is usually given to whoever it has been stipulated in the will.
Hiring the Right People
The good thing about situations like this is that these things are often done in close proximity. Hiring the right kind of professional will help a lot with this, because they can deal with all the problems at the same time.
It is possible to run into delays, because there are many situations where a beneficiary needs to be tracked down, or the property needs to be sold. You may also encounter a situation where somebody has indicated that they will raise a claim against the estate, which means that the executors may have to deal with this with the help of professionals. Hiring an expert Kent tax advisors is recommended here.
In many cases, it’s possible to make a payment to beneficiaries in the interim. This is where you will give them a small amount of what they are owed, and this is given until such a time as the grant of probate can be obtained.
Once it is clear what is going to be paid out in full, you can deliver the rest to them.
Understanding the order that people get paid when it comes to probate is important for making sure that you successfully handle the process.
There is a strict order involved, and it is important to work out how to do it. There are legal requirements to consider, which is why making sure that you pay the right people in the right order is vital. To get the best results, consider hiring Kent accountant for probate services to help you is recommended.