Will my Estate require Probate if I have Lasting Powers of Attorney?
Posted on 25th February 2024
Understanding the complexities of estate planning and administration often leads to questions about the relationship between Probate and Lasting Powers of Attorney (LPAs). One common question our Probate Solicitors in Preston hear is whether Probate is required if you already have LPAs for someone who has passed away. Understanding the distinction between these legal processes and their respective roles in future proofing is crucial for effectively managing the affairs of your loved one after their death.
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Lasting Powers of Attorney Explained
Lasting Powers of Attorney (LPAs) are legal documents that grant the named person or people (the attorneys) the authority to make decisions on behalf of another person (the Donor). LPAs can be made for Financial matters or Health and Care decisions. LPAs are an essential tool for estate planning, allowing the Donor to ensure their affairs can be managed if they lose capacity. This helps provide security in the future, and prevent costly issues arising when people lose capacity without the correct legal documents in place to allow someone to manage their affairs.
It is important to note that LPAs are only valid during the Donor’s lifetime, ending immediately on their death. This is where the process of Probate and estate administration starts.
Probate Explained
Probate is the legal process of proving a person’s Will and administering their estate after they die, involving applying to the Probate Registry for Probate, collecting their assets, paying off debts and taxes, and distributing the remaining estate to the beneficiaries. Probate is overseen by the Probate Registry, and is usually necessary to legally transfer ownership of the deceased’s assets that were solely in their name or did not have a nominated beneficiary, usually pensions or life insurance.
Is Probate Required If You Have Lasting Powers of Attorney?
Our Probate Solicitors in Preston would explain that the simple answer is yes- Probate is typically required even if you had Lasting Powers of Attorney for the deceased before they passed away. Here’s why:
End of Authority under LPAs
As mentioned, the authority granted by a power of attorney ends with the death of the Donor. The executor named in the Will, or an administrator appointed by the Probate Registry under the Rules of Intestacy, then becomes responsible for managing the estate through the Probate process.
Asset Ownership and Transfer
Probate is necessary to legally transfer the deceased’s assets that do not automatically pass to a beneficiary. While LPAs may have allowed you to manage these assets during the Donor’s lifetime, it does not grant you the authority to distribute them after death.
Estate Administration
Probate provides a legal framework to validate the Will, settle debts, and ensure taxes are paid before the estate is distributed. These steps are essential to protect the rights of beneficiaries and creditors.
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When Might Probate Not Be Required?
There are situations where Probate may not be necessary, but these are not directly related to the existence of a Lasting Power of Attorney. For example:
Joint Ownership with Right of Survivorship: Assets owned jointly, where the surviving owner automatically assumes full ownership upon the death of the other, typically bypass the need for Probate.
Nominated Beneficiaries
Accounts with nominated beneficiaries, such as life insurance policies and pension lump sums (although, not all circumvent this requirement), also bypass the need for Probate and go directly to the beneficiaries.
Small Estates
sometimes asset holders will not require Probate, if the balance of the account is less than a certain matter. These values depend on the organisation, but you can see a list of common Probate thresholds, here.
Having Lasting Powers of Attorney does not exempt an estate from the Probate process. LPAs are powerful tools for managing affairs during a person’s lifetime, but its authority ends at death. Probate is often necessary to legally settle the deceased’s estate and distribute assets according to the Will or the Rules of Intestacy. Understanding the distinction between these processes and preparing accordingly is essential for effective estate planning and administration.
To discuss your loved one’s estate, call our Probate Solicitors in Preston on 01772 783314 or email wills@mglegal.co.uk. Our Probate Solicitor, Naomi Pinder, has over 35 years’ experience and can assist with your loved one’s estate as a fully accredited member of the Association of Lifetime Lawyers.
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