Chances are, unless you are in the industry or have already lost a loved one, you haven't heard of probate before. It's a lengthy legal proceeding before the courts to settle wills.
A grant of probate is sometimes needed when valuable assets, such as property and shares, are left in a will. It's a process that ensures the instructions in a will can be followed.
When a family member passes away, if you're the next of kin, you need to determine whether they made a will. If they haven't, they are said to have died "intestate". In this situation, any next of kin would need to apply to be appointed as the estate administrator.
Most financial institutions require a grant of probate before they can release accounts and funds to anyone other than joint account holders. When is probate necessary?
• Where the assets are held by one or more organisations, such as banks and companies, are not jointly owned and are worth more than a minimum amount set by the organisation concerned.
• If property is involved, but not as a jointly owned asset. If unsure, you could check the property's title deed or seek legal advice.
• The will is contested, which means there's a dispute about whether it's valid. Such a dispute could occur for many reasons, including accusations that the will's creator was unduly influenced by others or was not sound of mind when setting out their wishes.
Before rushing into applying for probate, it's worth checking whether it's necessary. Often, the executor of a will can gain access to assets through a less complicated process. Such as by producing a series of documents, such as the will and the death certificate. Applying for probate can be time-consuming and complex, so it might be better avoided.
Do you need probate to make a life insurance claim?
You may not need a grant of probate to claim life insurance. Where a beneficiary has been validly nominated, the claim proceeds can be paid directly to the beneficiary.
However, if a beneficiary hasn't been nominated for a life insurance policy, then it might be necessary for the executor to apply for a grant of probate. This can be a difficult and lengthy process. It's important for everyone with a life insurance policy to consider nominating a beneficiary while they're healthy and well.
Also, worth keeping in mind is that, in most cases, life insurance isn't automatically part of your estate. Meaning you don't need probate to access funds. Life insurance proceeds may go towards living expenses, medical bills, mortgages, and debts, among other costs.
Some life insurance policies even offer an advance payout while processing your claim. Helpful for accessing immediate costs such as a funeral or legal fees needed to settle the estate.
We are seeing probate cases taking over one year to be granted have increased by 65% over the last three years. So, having a good life insurance policy is key to helping your family financially after you pass away.
Let us help you navigate this all. Contact us today for personalised help that only a broker can offer.
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