Dealing with the estate of a loved one after their passing can be complex and emotionally draining, particularly when the estate includes a farm but there are a series of steps to take that will help you navigate the journey.
According to solicitor Fionntán O’Flynn of Brendan Kelly Solicitors, a Grant of Probate must be obtained before an estate property can be sold, unless the deceased held the property in joint names, in which case it passes to the surviving joint owner under the rules of survivorship.
Personal Grant of Probate applications by estate executors or administrators are allowed in suitable cases. However, a probate solicitor is required in certain circumstances and advisable where an estate includes property, is near a Capital Acquisitions Tax (CAT) threshold, has multiple beneficiaries or foreign assets, or may be subject to dispute.
The executor provides the solicitor with the title deeds, death certificate, property details and any mortgage documentation. A date-of-death valuation is then carried out by an estate agent for probate and tax purposes. Known as a ‘Red Book valuation’, this is a paid-for professional valuation, generally costing €200-€500 depending on the size and complexity of the farm, with the cost borne by the estate.
Once probate is obtained, the solicitor will apply for clearance from Revenue and the Department of Social Protection to ensure there is no income tax or overpayments outstanding from the deceased
Fionntán says that while a new online Grant of Probate application portal recently opened, it is currently available to solicitors only. Personal applicants must make an in-person appointment, facing a wait time of 10-12 weeks before the application can even begin. Protection against delay often justifies the cost of employing a solicitor.
“The probate office is very particular in the wording used, particularly in the oath,” says Fionntán.
“If there’s a singular word missing, your application could be rejected, and this can put it to the bottom of the pile again.”
According to the Courts Service, probate applications lodged by solicitors through the portal are currently being processed within three to four weeks of lodgement, provided no queries arise.
Grant of Probate application fees depend on the estate’s value and whether the application is made through a solicitor or by an individual.
For solicitor applications, fees range from €100 to €650 for estates up to €1m, with an additional €400 for every €500,000 above €1m. For personal applications, fees range from €200 to €1,300 for estates up to €1m, with an additional €800 for every €500,000 above €1m.
Once probate is obtained, the solicitor will apply for clearance from Revenue and the Department of Social Protection to ensure there is no income tax or overpayments outstanding from the deceased.
While solicitor fees for estate administration vary depending on the work involved, Fionntán says that the executor will sign a legal costs notice outlining the full fee and work to be undertaken before any work commences.
According to theprobate.ie, which provides detailed financial examples, probate in Ireland typically costs between €3,000 and €15,000 in total, depending on the size and complexity of the estate.
Engaging an estate agent
Cianán Duff, divisional director of residential and country agency at Savills, says a current market appraisal is needed when selling the property. These are generally free, and he recommends asking three estate agents to provide their proposed value range, fees and marketing recommendations.
“It’s up to the executor to pick the one they feel is most appropriate. It doesn’t have to be the cheapest or the dearest. You might prefer to choose an agent who has extensive experience with that type of property, or one who has access to the buyer type that you feel the property is going to sell to.”
Starting the sales process
While waiting for probate, the property can be valued, placed on the market and a buyer secured, but the sale cannot close until probate is granted.
Cianán says: “You can find a buyer and agree a price, and then say ‘OK, it’s subject to probate and it’s in the process at the moment’. But you can’t close the sale.
“A lot of times people will kick on like this, they won’t wait until the probate is granted.”
Issues with the probate, such as the discovery of previously unknown property overseas, can delay the process and potentially jeopardise the agreed sale. For straightforward grants, Cianán says this should not be an issue.
“If you’re pretty confident that the grant is clean, and that’s their only asset, that’s something that you could move on.”
After probate is granted, the process runs much like a standard sale, with the solicitor handling the contracts and conveyancing. Any outstanding debts and expenses are paid from the estate.
Taxes
Inheriting brings tax implications, and the executor needs to identify what taxes beneficiaries are liable for, with advice available from the solicitor or accountant.
According to Revenue, CAT may apply to an inheritance, depending on the beneficiary’s relationship to the deceased and the value of the inheritance above the relevant tax-free threshold.
Capital Gains Tax (CGT) may arise when an inherited property is subsequently sold, generally at 33% on any increase in value between the date of death and date of sale.
Cianán says beneficiaries may also overlook income tax where land has been leased.
“If you’re a beneficiary of a land sale which has been leased, there’s tax on the income for this and that needs to be cleared as well,” he outlines.
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