01

The assets that always pass outside probate — and why

Certain assets pass directly to named beneficiaries on death as a matter of law, regardless of what the will says. Understanding which assets these are is the foundation of any probate avoidance strategy.

Pension funds: registered pension scheme death benefits are paid by pension trustees to nominated beneficiaries in accordance with the member's expression of wishes. They are not assets of the estate and do not require probate. A pension fund of £500,000 with a current expression of wishes naming the member's children passes to those children within weeks of death — without probate, without IHT (until April 2027), and without any involvement of the executor. An out-of-date expression of wishes (or none at all) means the pension trustees exercise their own discretion — potentially paying to the estate and triggering both probate and IHT.

Jointly held assets passing by survivorship: property and bank accounts held as joint tenants (not tenants in common) pass automatically to the surviving owner on death — outside probate. The survivor provides the institution with a copy of the death certificate. For a married couple holding the family home as joint tenants, the property passes to the survivor within days of death — no probate required for this asset.

Life insurance written in trust: a life insurance policy not written in trust pays into the estate and requires probate before payment. A policy written in trust pays directly to the trust beneficiaries within weeks — no probate, and outside the estate for IHT. Setting up a trust on a life insurance policy costs nothing — major insurers provide standard trust forms. This single step eliminates probate and IHT on the policy proceeds simultaneously.

02

Expression of wishes — the most important document nobody updates

The expression of wishes (also called a nomination form) for a pension fund is the single most important probate avoidance document available to most UK adults — and the most consistently neglected. It instructs the pension trustees whom to pay the death benefit to. Without a current expression of wishes, pension trustees must exercise their own discretion — and may pay the death benefit to the legal estate, bringing it into probate and IHT.

The expression of wishes is not legally binding on pension trustees — they must retain discretion to avoid the death benefit being classified as part of the estate for IHT purposes. But in practice, pension trustees follow a current expression of wishes in the vast majority of cases where it is not challenged by family members.

Life events that must trigger an expression of wishes review: marriage or civil partnership; divorce or dissolution (a former spouse remains a valid beneficiary unless the expression of wishes is updated — the divorce itself does not remove them); birth of a child or grandchild; death of a nominated beneficiary; and any significant change in family relationships or financial circumstances.

Practical steps: contact each pension provider and request the current expression of wishes on file. If it is out of date or absent, complete a new form immediately. For pensions with multiple providers — common after a career spanning several employers — each scheme must be updated separately. A 30-minute exercise today could save beneficiaries six months of probate delay and thousands in costs on death.

03

Jointly held assets — the mechanics and the risks

Joint tenancy is the legal mechanism by which jointly held assets pass outside probate. When one joint tenant dies, the surviving joint tenant automatically inherits the full asset — this is the right of survivorship. The survivor simply provides the institution with a certified copy of the death certificate. No grant of probate is required.

Joint bank accounts: the most immediate practical application. For couples who hold a joint current account, the surviving partner can continue to use the account immediately on death — without waiting for probate. For estates where probate takes six months or more, having joint access to at least one bank account is essential to avoid the surviving partner facing financial difficulty during the probate period.

Joint investment accounts: shareholdings and investment portfolios can be held jointly. On death of one joint holder, the surviving holder becomes sole owner without probate. However, joint investment accounts have CGT implications — each party owns a 50% share for CGT purposes, and the death of one joint holder triggers a CGT rebase to the probate value for the deceased's share. This can be advantageous if the asset has a large embedded gain.

The tenants in common distinction: property held as tenants in common does not pass by survivorship. Each owner's share passes according to their will (or intestacy if there is no will) and requires probate. Many couples deliberately hold property as tenants in common for IHT nil rate band planning — allowing each to leave their share to children or a trust. This is legitimate planning but requires understanding that the property no longer passes outside probate on first death.

04

Lifetime gifting — reducing the probate estate systematically

Assets given away during lifetime are not part of the probate estate on death. They have already transferred ownership. Systematic lifetime gifting therefore simultaneously reduces the probate estate (reducing probate fees and complexity) and potentially reduces the IHT estate (if the donor survives the relevant period).

Annual gift exemption: £3,000 per person per year with no probate or IHT consequences. For a couple, £6,000 per year permanently outside both the probate estate and the IHT estate. Over 20 years this removes £120,000 from the couple's combined estate — without a seven-year survival period or any IHT risk.

Gifts from surplus income: the normal expenditure from income exemption (IHTA 1984, s21) allows regular gifts from income to pass outside the estate immediately — no seven-year period, no IHT. The conditions: the gifts must form part of a habitual pattern; they must come from income not capital; and the donor must retain sufficient income for their normal standard of living. A retired couple with £6,000 per year of surplus pension income gifting it systematically can remove significant sums from the probate and IHT estates over a 20 to 30-year retirement.

Larger potentially exempt transfers: gifts above the annual exemptions are PETs — they potentially fall outside the estate after seven years. Gifts made more than seven years before death are fully excluded from both the probate estate (as they have already left the estate) and the IHT estate. Systematic gifting over a 10 to 20-year period can substantially reduce the probate estate for families with the health and inclination to plan ahead.

05

Writing a clear, current will — the foundation that makes everything else work

Probate avoidance strategies reduce the assets that pass through probate — but a valid, current will ensures that the assets which do pass through probate are distributed exactly as intended, with minimum delay and minimum cost. A poorly drafted will — or no will at all — can undo years of careful estate planning.

Intestacy rules (TOLATA 1996 and the Administration of Estates Act 1925) distribute an estate without a will according to a fixed formula that may bear no resemblance to the deceased's wishes. A cohabiting partner receives nothing under intestacy — regardless of the length of the relationship. Stepchildren receive nothing. The formula prioritises blood relatives in a specific order that frequently produces unintended outcomes.

Common will mistakes that add probate complexity: failing to name substitute executors (if the named executor has died or is unwilling to act, the probate application is delayed while a replacement is identified); naming a sole executor who lives abroad (foreign executor delays are common); using imprecise language to describe assets (which house? which bank account?); failing to update the will after a divorce (a former spouse remains a beneficiary unless the will is updated — their entitlement is only removed if they predecease); and failing to include a residuary clause (any assets not specifically gifted fall into the residuary estate — without a residuary clause they pass by intestacy).

Professional will review: a solicitor-drafted will review costs £300 to £600 and should be undertaken every five years or after any major life change. This is the lowest-cost highest-return legal expenditure available to most adults — the probate complexity and family dispute cost of a poorly drafted will can run to tens of thousands of pounds.