About the administration of Probate in Cyprus
The death of a loved one is undeniably one of the most stressful events in anyone’s life. When dealing with the emotional stress of loss one also has to deal with the cumbersome but necessary procedures to ensure that the deceased’s possessions and other business is brought to a closure.
If the deceased had left behind a valid will then his assets should be dealt with in accordance with his wishes (subject to the forced heirship provisions of the law) and this process is commonly known as “Probate”. In case the deceased did not leave a valid will then his assets shall be dealt with in accordance with the provisions of the relevant Law which covers such situations and this process is known as “Administration”.
Understanding the difference between the two procedures may not be important when you have a professional team to assist you. It is however important to note that it is usually quicker to finalise the Estate (the deceased’s assets) when there is a valid Will in place.
The process of Administration and Probate in Cyprus.
STEP 1 – Provision of information
Once the lawyers are notified of the passing of your family member, they will request certain information such as an original death certificate and information with regards to the family status and assets of the deceased (e.g. marital status, full names and addresses of the children, if there are any vehicles, any properties, any investments, bank deposits, debts, loans etc).
If the lawyers hold the deceased’s Will they will then open it and will inform the beneficiaries of the contents of the same.
At this stage, a deposit would typically be required to be paid for the expenses of the administration/ probate.
STEP 2 – Court Application
The application for probate/administration is lodged at the Court. Within approximately a week from the lodging of the same, the Court usually issues a Certificate (Probate Certificate or Letters of Administration as the case may be) which is necessary to proceed further. This Certificate effectively “opens” the doors for the collection of information regarding the assets of the deceased.
STEP 3 – Searches and Inland Revenue
The person handling the Probate/ Administration will conduct searches to find the assets of the deceased such as searches done at the Land Registry and banks.
Then a case file is opened at the Inland Revenue in order for the Inland Revenue to assess whether the deceased owes taxes in Cyprus. The Inland Revenue in Cyprus will request the procurement of a “certificate of fiscal residence” from the Inland Revenue of the country of origin of the deceased (e.g. in the UK this is the HMRC). This basically tells the Inland Revenue whether the deceased was a tax payer in his country of residence or in Cyprus so that they can process the case. Obtaining this “certificate of fiscal residence” can sometimes take 3-4 months depending on the country of origin of the deceased.
STEP 4 – Inventory of Assets and Debts
When all the searches have been done and the information about the assets and debts of the deceased have been collected, an official inventory must be prepared which is then lodged at the Court and at the Inland Revenue.
STEP 5 – Tax Clearance Certificate
Once the information in STEP 3 and 4 has been submitted to the Inland Revenue and all the queries have been dealt with and any requested information submitted, the Inland Revenue shall issue the Tax Clearance Certificates (TCCs). These are certificates which allow each of the assets to be accessed. For example, there will be a TCC for the bank account, one for each property, etc. With the TCC the bank will allow the Executor of the Estate to take the funds deposited in any bank account and to close the same. With the TCC relating to a property, the Executor will be able to sell a property or to transfer it from the name of the deceased onto the names of other persons.
STEP 5 – Dealing with the Assets
It is important to note that any outstanding debts or loans of the deceased must be dealt with as a matter of priority. Therefore, if there are sufficient funds in any bank accounts to settle these liabilities then these shall be paid first. If there are no funds to settle these, then the Executor may have to sell other assets to produce the necessary funds or to make other arrangements as may be appropriate each time under and as the circumstances may be.
If there are no debts or loans then the assets of the deceased can be divided between the beneficiaries.
Any professional services fees shall also be deducted from the Estate prior to the division of assets to the beneficiaries.
The beneficiaries upon receipt of their share of the Estate shall be required to sign a declaration to acknowledge such receipt and discharge the Executor.
STEP 6 – Final Accounts
When all the debts have been cleared and all the assets of the deceased have been divided between the beneficiaries, then Final Accounts of the Estate are prepared and lodged at the Court together with the Declarations of the Beneficiaries mentioned in STEP 5. The Final Accounts show a breakdown of how all the matters of the Estate were dealt with, providing the Court with copies of all receipts, invoices, contracts etc.
STEP 7 – Closure
The Court Registrar shall review the information, the Final Accounts etc which have been submitted and provided that everything is in order shall close the Probate/Administration file.
The above process may seem daunting to deal with especially at a time of emotional distress. Using the right professional team to support and assist you can take away the load and may alleviate the stress related to the administration and probate in Cyprus process. It is however important to choose experienced professionals you can trust to assist you during such difficult times.
Feel free to get in touch with us and we will be happy to assist you!