When someone dies a nominated person has to finalise their affairs and administer the estate.
If the person has died leaving a Will
This appoints Executors to administer the Estate.
If you are named as an Executor of a Will you will need to apply for a Grant of Probate. This document allows the Executors to wind up the Estate and distribute the money to the appointed beneficiaries.
If the person has died without leaving a Will
If there is no Will (known as dying intestate) the process is more complicated. An Administrator is needed to wind up the Estate. The Administrator will usually be a close relative of the person who has died, if there is one. There may be more than one person who has an equal right to do so.
The Administrator has to obtain a Grant of Letters of Administration from the Court and this works in the same way as a Grant of Probate.
When a Grant of Representation is needed
A Grant of Probate or Letters of Administration (both commonly known as a Grant of Representation) is needed to transfer the assets from the name of the deceased to the relevant beneficiaries.
Usually a Grant of Representation will be needed when the person has died leaving:-
- More than £5,000
- Stocks or shares
- House or land
- Certain insurance policies.
Responsibilities of Personal Representatives
The Executor or Administrator is responsible for making sure that the Estate is administered correctly. If there is a Will, the Personal Representatives must make sure that the wishes of the person who has died as set out in the Will are followed. If there is no Will you must follow the rules of intestacy (set out in the Administration of Estates Act 1925).
The Personal Representatives are also responsible for finding out if Inheritance Tax is due as a result of a person’s death. If it is, the Personal Representative has to make sure that it is paid.
Whether Inheritance Tax needs to be paid can depend on:-
- How much the property and belongings of the deceased were worth when they died.
- The value of any gifts that they gave before they died and who they gave these gifts to.
- The value of certain trusts from which the deceased benefited.
- Which people will benefit under the Will or under the rules of intestacy (the beneficiaries)
Dealing with the affairs of someone who has died can take a long time. It is not unusual for it to take up to a year, perhaps longer if things are not straightforward. Many organisations may be involved in the process, for example, banks, building societies, insurance companies and H.M. Revenues and Customs.
The Estate cannot be dealt with until all claims on it have been received. Individuals have six months from the date when Probate or Letters of Administration was granted to make claims against the Estate.
Other things that may affect the time taken are:-
- Whether the financial affairs of the deceased were in order.
- What the deceased owned and where it is.
- Whether the deceased has an interest in a business or a farm.
- What the Will or the rules of intestacy say.
- Whether there are any legal disputes (claims against the Estate or claims by the Estate).
- Whether Inheritance Tax needs to be paid.
- Ensuring that all H.M. Revenue and Customs files are closed and that the matters relating to Income Tax, Benefits Agencies, and pensions have been sorted out.
Whether the financial affairs of the deceased were in order.
What the deceased owned and where it is.
Whether the deceased has an interest in a business or a farm.
What the Will or the rules of intestacy say.
Arguments between family members, beneficiaries, or Personal Representatives can also delay matters. Any disagreements must be sorted out before the affairs of the person who died can be settled.
Deeds of Variation
The Will or the intestacy rules can be altered within two years of a person’s death to save Inheritance Tax for the family. The Deed can create the equivalent of tax efficient Wills. For more information on these please see our leaflet on Nil Rate Band Discretionary Trust Wills.
How will the Estate be administered by Clarkson Wright & Jakes
We are a partner led firm, which means that all members of our staff are supervised by a partner. To keep costs to a minimum, however, we have specialist Probate managers who will deal with the day to day administration of the Estate.
Our Probate managers have many years experience among them and use their experience and up to date computer technology to ensure that Estates are administered both efficiently and sensitively.
The supervising Partner ensures that the more difficult aspects of the Estate such as Inheritance Tax and Capital Gains Tax liability or overseas property are dealt with quickly and also that residuary legatees are offered advice on how to save tax on the Estate and in the future.
If you have any queries please contact our Estates and Administration Department on 01689 887887.