What happens if assets are discovered after Probate has finished?

This situation is quite common. Forgotten savings accounts, premium bonds or old pensions can surface months, or even years, after Probate has been granted and the estate has been distributed.

So what is the normal course of action in this case? When this happens, the personal representative (the executor or administrator) is required to a) collect the property, b) report any changes to the tax authorities, and c) distribute the remaining funds to the correct beneficiaries.

The important steps

The executor’s duties do not end with the final distribution, so they remain responsible for dealing with any newly found asset. However, this process is usually simpler than it sounds.

Does the estate need to be reopened?

The existing grant of Probate covers the whole estate, not just the assets originally listed, so a new grant is rarely needed. The exception is where the original executor has since died or lost mental capacity. In that case, a further grant may be required.

Collecting the asset

The executor should contact the bank or organisation holding the asset and ask for the funds to be released. They will usually need to provide a certified copy of the grant and the death certificate. The executor should also ask for a date-of-death valuation, as HMRC will need it.

Updating HMRC

A newly found asset increases the value of the estate. If an inheritance tax account has already been submitted, the executor should file a corrective account and pay any extra tax and interest promptly. Even if no tax was due originally, the additional value could push the estate over the threshold.

Distributing the funds

The money should be shared in line with the Will or, where there is no Will, the rules of intestacy. In most cases, it falls into the residuary estate and is divided in the same proportions as before.

Updating the estate accounts

Finally, the estate accounts should be updated to record the money received and paid out. They should then be shared with the beneficiaries, so everyone can see how the extra funds were handled.

Talk to our team

Our team of experienced North Wales solicitors can guide you on how to deal with late-discovered assets, from HMRC paperwork through to final distribution. Get in touch today on 01248 671994 for friendly advice.