Probate: assets and liabilities

Understand probate assets and liabilities and how they affect estate administration

What are assets?

When someone dies, their estate will be made up of a number of assets which will need to be dealt with in different ways by the Personal Representatives in order to complete probate. The assets which make up the estate include anything the deceased owned solely or in distinct shares (e.g. half a house, see ‘Joint ownership’ for more information), as well as anything owed to the deceased such as unpaid wages. Typical assets include: 

  • monies in bank accounts; 
  • property and land;
  • personal possessions;
  • business assets;
  • pensions; and
  • digital assets.

For a more exhaustive list, further description, and advice on how to deal with these assets, please see our ‘Probate assets’ page. 

What are liabilities?

Liabilities are any payments which need to be deducted from the total value of the estate. Typically, these liabilities come from any debts which are still owed by someone at the date of their death. These debts are deducted from the value of the estate, and are paid by the personal representatives before the estate is distributed to beneficiaries. 

Alongside the debts owed at the time of death, sometimes further liabilities can arise. Some debts can increase over time continues to be applied, such as the interest on Mortgages. Others debts only arise after death, such as administration costs and funeral expenses. More information is available on our ‘Probate liabilities’ page, explaining the different kinds of liabilities and how to find out what debts are owed by the deceased.

Ownership of property

The law recognises several different ways in which property can be owned. The main things to think about are whether property is jointly or individually owned, and whether ownership is ‘legal’ or ‘beneficial’. It is important to know exactly the nature of the deceased person’s ownership, as it may determine whether the estate is entitled to all of the money coming from the sale of a property, or only a share of the profits. Alongside the information provided below, all of these terms are explained further in our ‘Ownership of property’ page.

For property (ie land and houses), legal ownership will be held by the person(s) named as the legal owner at the Land Registry, or in the title deeds for unregistered land. Beneficial ownership occurs when someone is entitled to either use the land or receive the proceeds from sale, but is not the legal owner. Most commonly, this will be due to a trust set up over the land for their benefit. For more information on trusts, please see our page ‘Trusts’.

If property is owned jointly, it is important to clarify whether it is held as joint tenants or as tenants in common.

  • If property is owned by joint tenants, all of the joint tenants own the whole property jointly, and so when any one of them dies they do not have a share which can be passed on in a will.
  • Alternatively, if a property is held by tenants in common, each person owns a share of the property which is only theirs, and so that share can be passed on.

If you are in any doubt as to joint ownership, please see our ‘Joint ownership’ page for more information. 

Another possibility is that a person lives as a tenant in a rented property, in which case there may be a question of the ownership of a residential lease. If this is the case, there may be additional charges which will continue to be due after the death of the tenant, such as ground rent and service charges. It is important to notify the landlord of the death in order to confirm that all rent and service charges are paid, and that there are no outstanding issues. Depending on the length of the lease that is left, there may also be an option to purchase the remaining lease. For more information on this procedure, please see our ‘Ownership of property’ page. 

Estate valuation

Getting a valuation of the estate is crucial for several different aspects of completing probate. It is needed for

  • inheritance tax purposes
  • in order to calculate the total value of the estate
  • to calculate capital gains tax
  • to settle debts
  • to settle the distribution of the estate.

While clearly an important issue, valuations are also the single biggest area of risk for personal representatives. It is crucial to instruct properly qualified valuers in order to make sure the valuation is done correctly and to appropriate standards. Different valuers might need to be instructed for different elements of the estate. How to obtain a professional valuation and other important requirements to be aware of are detailed in our ‘Estate valuation’ page.

  • Probate assets

    Guidance explaining probate liabilities and how they affect estate administration 

  • Probate liabilities

    Guidance explaining probate liabilities and how they affect estate administration 

  • Probate: ownership of property

    Understand the implications of the different methods of ownership for probate and estate administration

  • Joint ownership

    Understand the implications of joint ownership for probate and estate administration

  • Trusts

    Understand trusts and their implications for probate and estate administration

  • Estate valuation

    Understanding estate valuation for the purposes of applying for probate