Why do a Bankruptcy Check During Probate Process?
When going through the Probate process, the need to consider if bankruptcy will play a part is hugely important.
It can have a big impact on the inheritance of an estate following a death and alter the overall process.
What is probate?
Probate involves the legal processes which allow for the distribution of property, money and possessions of a person who has passed away. The process ensures a Will is valid and confirms who has authority to administer the deceased’s estate.
Why should bankruptcy be considered?
If the deceased person is bankrupt serious consideration should be given as to whom administers their estate. Sometimes it can be more beneficial for this role to be entrusted to a specialist Trustee in Bankruptcy.
If a beneficiary is currently classified as bankrupt, it complicates the process of probate as it impacts on how the beneficiary can inherit. By law, the inheritance, in the case of a bankrupt receiver, would need to be used to pay off outstanding debts, with the remainder being passed on to the beneficiary.
If that individual is bankrupt, their inheritance will go to their Trustee in Bankruptcy, an official appointed by Court to arrange outstanding debt repayments.
How do you check?
To find out if a beneficiary is bankrupt, you can check through an online search at the Land Registry. This is something a solicitor instructed to deal with probate would do as a matter of course alongside checking that persons identification. Bankruptcy checks should not be overlooked whether the beneficiary is in the UK or abroad.
Why should you choose a solicitor to help?
The use of a solicitor allows an Executor or Administrator of an estate – the person who handles its distribution – to feel reassured that nothing is missed; a professional who specialises in the process can guide them through matters and ensure all aspects are taken care of and considered. If you distribute to a beneficiary who was bankrupt at the time of your distribution to them then the Executor or Administrator can be personally liable for the monies.
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