Lawyers Specialising in UK Probate
In short, estate administration is the process of dealing with someone’s financial and legal affairs after they have die. In particular, it involves collecting in all of that persons assets and distributing those to whoever is entitled to the property under the deceased person’s will or the “intestacy rules” (which are the rules setting out who should receive property if there is no will, which are explained below). And dealing with their estate after the death of a loved oneour trusted friend can be difficult. Many people find it stressful and it’s likely to be particularly complicated if the deceased left a large or complex estate. Essentially, the role of an executor can be complex and challenging one. And that’s where our specialist estate administration solicitors often come in.
To give you an idea of what could be involved, our guide looks at what needs to be done, step by step, to wind up their affairs.
Have you lost a loved one and are looking for help with estate administration? Call our highly experienced Probate Solicitors on FREEPHONE 0800 1404544 or one of our four local office numbers for FREE initial phone advice – with no strings attached. Our 12 strong team are happy to either handle the entire estate administration, or can help you to handle it yourself.
Professional help from our specialist estate administration solicitors
Estate administration can take many hours over a long period of time and it is not always practical for an non- professional executor or administrator to deal with this themselves. It is often particularly complex and risky if the deceased person had significant assets, owned a business or had property abroad. And that can lead to contested probate claims – something you definitely want to avoid.
If you are concerned that it could be more than you can deal with, contact our highly experienced probate solicitors to discuss whether we can help you in administering the estate. our 12 strong private client team Have all the experience you need. They deal with nothing but wills, probate, lasting powers of attorney and trusts for clients both locally in Wiltshire, Hampshire and nationwide – as well as for clients overseas.
And don’t forget that our costs in handling probate are all paid from the estate funds.
Obtaining a death certificate
Any death should be registered within five days at a local Register Office. They may be prepared to deal with the registration over the phone and you can contact them to find out their procedure.
You will need to supply them with the following
· details of the deceased, including their name, address, occupation and place and date of birth
· the medical certificate giving cause of death. This may be provided directly to them by the local health authority.
If you attend the Register Office in person, you should take your own identification with you to prove who you are.
The Registrar will normally issue you with a death certificate within a few days. Copies of the certificate cost £11 and you may want to buy several as you will need to send them to most of the organisations that the deceased had dealings with, such as banks and credit card companies.
Arranging the funeral
The next stage is to arrange the funeral. The funeral director will need a copy of the death certificate. The person arranging the funeral is responsible for paying for it, but the cost can be claimed back from the estate once a Grant of Probate has been issued.
If the deceased had a bank account with sufficient funds in to cover the cost of the funeral, you can ask the bank if it will pay the funeral director’s costs. Banks are usually willing to help with this, although they will need a copy of the invoice which most banks will generally settle directly with the funeral director.
Estate Administration – securing the deceased’s assets
The person handling the estate administration needs to secure the deceased’s assets. If they owned a property which is now empty, the insurance company should be advised of the situation and asked to continue the insurance, but on the basis that the house is unoccupied. This is important – if the house remains unoccupied, then you might find you are without valid insurance should damage take place.
If the deceased owned a car that will not now be used, this should be kept somewhere safe and you will need to advise the insurance company of the change in circumstances so that valid insurance can be maintained.
Advising third parties of the death
You will need to send a copy of the death certificate to all the organisations where the deceased had holdings or an account. This includes:
· Building societies
· Life assurance companies
· Investment companies
· Pension companies
· Mortgage lender
· Utility companies
· Phone and broadband provider
· Credit card companies
When writing, it’s a good idea to give the organisations all of the details you can about the deceased and their holding, including the deceased’s name, address, date of death and account numbers. Make sure you ask the organisation to provide a figure for the amount held or owed as at the date of death.
The “Tell Us Once” service
The government has a handy ‘Tell Us Once’ service that you can use. This allows you to notify several government organisations all at once. Here is the link: https://www.gov.uk/after-a-death/organisations-you-need-to-contact-and-tell-us-once
The Registrar will give you a reference number that you can use. You will need to ring the government’s Tell Us Once line and give them:
· The reference number
· The deceased’s name, date of birth and address
· The date of death
· Your details, as estate executor or administrator
· Details of the deceased’s next of kin
Other information in respect of the deceased can also be useful, including:
· Driving licence number
· Passport number
· Vehicle registration number
· Details of the local authority if they were receiving benefits
· Details of their public sector pension scheme if applicable
The Tell Us Once scheme will then notify a range of departments, including:
· HM Revenue & Customs
· The Department for Work and Pensions
· The Passport Office
· The Driver and Vehicle Licensing Agency
· The local authority
Who can apply for probate?
Estate administration will be carried out by the deceased’s personal representative. If they left a Will, this will be their executor who is usually be named in the Will. There can be more than one executor.
If the deceased didn’t leave a Will, the person responsible for winding up their estate is known as the administrator.
Estate Administration if the deceased left a Will
The Will should name one or more executors. This is the person who will apply for a Grant of Probate. The Grant of Probate is the document that gives legal authority to the executor to deal with the deceased’s affairs.
If two or more executors are named but one does not want to take an active role in the administration, they can have ‘power reserved’ to them. This means that they won’t be involved in winding up the estate but can, if necessary, apply to become an executor later on.
If an executor doesn’t want to act at all, they can “renounce” the role. But you need to take care. If someone is going to do this, it is essential that they take no part in dealing with the estate. If they do get involved (for example, by asking the bank to pay for the funeral), they won’t be able to renounce.
Here at Bonallack & Bishop we are regularly appointed as professional executors in many of the thousands of Wills we have prepared for clients over the years. And even if we were not appointed in the will to administer the estate, you, as executor may choose to appoint a solicitor to look after the whole process for you. Just give us a call and we can discuss your options with you.
Is it possible for me to be an executor of the UK will despite residing overseas?
Yes – that’s not a problem and expatriates regular act as executors for the estates of their deceased friends and loved ones in England and Wales. However, certain practical difficulties may arise.
And that’s why our estate planning solicitors often help expats in managing the probate procedure, providing them with either full estate administration or with as much advice and assistance as they want. .
In some cases, the person appointed as an executor just can’t cope with dealing with an estate administration. Alternatively, they may simply not want to. Being an administrator or executor can be very time-consuming and can also be complex, particularly if the deceased had a wide range of assets and liabilities.
Estate administration involves extensive correspondence to value the estate. Inheritance Tax needs to be calculated, which can be complicated. All of the assets need to be collected in and it may be advisable to place statutory advertisements in the press. Ultimately, detailed estate accounts will need to be prepared.
The job can be made harder if beneficiaries and family members don’t agree or if they want matters dealt with quickly.
Executors – are they responsible for mistakes?
Executors and administrators also need to be aware that they will have personal liability for any errors they make that cause a loss to the estate. And that’s the case even if they make a genuine mistake. So, for example, if they were unaware of a tax liability and distributed the estate to the beneficiaries, without paying that tax bill, they might be personally responsible for paying not only the tax also any penalty for late payment themselves.
One alternative to renouncing probate is to ask experienced wills and probate solicitors to deal with the estate administration on your behalf. You can still remain the executor, but the probate solicitor will deal with the whole administration and you would simply need to sign some of the documents. This protects you if a mistake is made.
Setting up trusts
If the Will left money in trust, you will need to set up the trust and add the funds to it, appointing trustees as specified. Here at Bonallack and Bishop we regularly handle both the creation of a variety of trusts as well as providing a professional trustee service.
Click here to read more about how our Trust Solicitors can help you and your family with trust creation and wealth management.
Click here to find out more about our Professional Trustee Solicitors can help you.
Estate Administration if the deceased didn’t leave a Will
If the deceased didn’t leave a Will, their estate will be dealt with under the Intestacy Rules, which set out in order of priority who will inherit the estate.
· As you will probably expect, the deceased’s spouse or civil partner and children are at the top of the list. If the deceased’s net estate (after deduction of bills) does not exceed £270,000, their spouse or civil partner inherits everything. If the deceased didn’t have children, then it’s their spouse or civil partner who inherits everything.
· If the deceased left a net estate of more than £270,000 and they had children, then the spouse or civil partner will inherit the first £270,000 plus all of their personal possessions. The remainder of the estate is divided in half. The spouse or civil partner will inherit one half. The deceased’s children will share the other half equally.
· Where the deceased had neither a spouse or civil partner nor children, the next in line to inherit are their parents, followed by siblings.
· Generally, the person with priority to inherit under the Intestacy Rules is the person who will apply for a Grant of Letters of Administration. This is the legal document that appoints an estate administrator, giving them legal authority to wind up the estate.
If this person does not want to take on the role, then the next person with priority can apply.
How do I apply for probate?
You need to establish whether a Grant of Probate (or Grant of Letters of Administration) is necessary. If the deceased’s estate is small, then a grant may not be necessary.
There is no exact definition of a small estate. If the deceased left property, then a grant is always needed.
Each bank has its own limit over which it will want to see a grant before it will release funds. This varies from around £5,000 to £50,000, depending on the bank. If you believe that a grant might not be needed, ask the bank in question what its probate threshold is.
The steps in applying for a Grant of Probate or Grant of Letters of Administration are:
· Value the estate
· Establish whether Inheritance Tax is payable and, if so, how much is due
· Pay Inheritance Tax
· Apply to the Probate Registry for a Grant of Probate or a Grant of Letters of Administration
Valuing the estate
You need to work out how much the net estate is worth. This is done by valuing all of the assets and liabilities. Assets include:
· Money held in bank and building society accounts
· Investments, such as shares and policies
· Valuable items such as cars, furniture and jewellery
Property and valuable items can be valued by looking at sales of similar assets or you can ask for a professional probate valuation to be prepared.
You should also calculate the value of the deceased’s liabilities, which could include:
· Outstanding mortgage or rent
· The balance on credit cards
· Money owed to utilities
Once you have a figure for each, you can subtract the liabilities from the assets to find the value of the net estate.
You also need to investigate the value of any gifts given by the deceased in the last seven years of their life, as these need to be taken into account when calculating Inheritance Tax.
Estate Administration – the importance of calculating Inheritance Tax
Calculating the right amount of Inheritance Tax (often referred to as IHT) you will need to pay is not straightforward. You may wish to seek professional help in working out how much is due.
Here at Bonallack and Bishop, we have a specialist inheritance tax planning solicitor who offers a FREE tax and estate planning review.
Click here to read more about how our Inheritance Tax Planning Solicitors can help you
There are a number of IHT allowances available and you will want to take advantage of these to minimise the amount of tax payable. failing to get these rights could mean you end up paying too much tax and losing some of the money that would otherwise have been due to beneficiaries – don’t forget, as executor, you could be liable for the cost of your mistake.
Everyone has an initial allowance of £325,000 (as at May 2, 2023). This is known as the nil rate band and no Inheritance Tax is payable on this part of an estate.
If the deceased was widowed and their spouse’s estate didn’t use their nil rate band, any unused portion can be transferred to the deceased’s estate, making a total possible nil rate band of £650,000.
A further allowance is available if the deceased left a property to their direct descendants, i.e.. children or grandchildren etc. In this case, a further £175,000 is available for both the deceased and their spouse. This makes a total potential tax-free amount of £1 million.
Inheritance Tax is payable on the part of the estate over the allowance, usually at the rate of 40%. An exception is if the deceased left 10% or more of their net estate to charity. In this case, the rate of Inheritance Tax is reduced to 36%.
If the deceased gave gifts of value during the last seven years of their life, Inheritance Tax may be payable on these on a sliding scale. Smaller gifts are permitted, but generally, when more than £3,000 per year is given, with some exceptions, the amounts need to be included in the calculations. The longer ago the gifts were given, the lower the amount of tax payable on them.
If Inheritance Tax will be payable, you should contact HM Revenue & Customs as soon as possible to ask them for an Inheritance Tax reference number. You will need this when paying the tax.
Paying Inheritance Tax
Once the amount of Inheritance Tax due has been calculated, it will need to be paid. The first step is to complete the IHT forms. There is one main form and many schedules. A schedule will need to be completed for each type of asset.
The main form is form IHT400. The schedules include:
· IHT401 where the deceased was domiciled outside of the UK
· IHT402 claiming unused Inheritance Tax allowance from the deceased’s spouse’s estate
· IHT403 gifts and transfers of value
· IHT404 jointly owned assets
· IHT405 houses land, buildings and interests in land
· IHT406 bank and building society accounts
· IHT407 household and personal goods
· IHT408 household and personal goods donated to charity
· IHT409 pensions
· IHT410 life assurance and annuities
· IHT411 listed stocks and shares
· IHT421 probate summary
· IHT423 direct payment for Inheritance Tax
· IHT430 reduced rate of Inheritance Tax
· IHT216 claim to transfer unused Inheritance Tax nil rate bank
· IHT435 claim the nil rate residence band
There are many more schedules and you will need to select all that are relevant to the estate.
The forms need to be submitted to HM Revenue & Customs together with payment. You will need to quote the Inheritance Tax reference number you have been sent on all of the forms.
It is often the case that an executor or administrator cannot pay Inheritance Tax themselves. You can ask one of the deceased’s asset holders to pay the Inheritance Tax. This could be a bank, building society or National Savings & Investments account. They will have a form for you to complete and will make the payment directly to HM Revenue & Customs, quoting the reference number.
The deadline for paying Inheritance Tax is by the end of the sixth month after the date of death.
Where funds are not available to pay Inheritance Tax, for example, because they are tied up in property which needs to be sold, it may be possible to pay the tax in instalments. Interest will be charged on the amount outstanding. The first instalment will be due at the end of the sixth month after the death.
Applying for a Grant of Probate or a Grant of Letters of Administration
Once the Inheritance Tax forms and payment have been sent, you should wait a couple of weeks then send your application for a grant to the Probate Registry. This allows HM Revenue & Customs time to confirm to the Probate Registry that the Inheritance Tax has been paid.
If no Inheritance Tax is payable, you can go straight to the application.
If the deceased left a Will, you need to send form PA1P to apply for a Grant of Probate. You will need to send the original Will plus any codicils and the application fee, currently £273 for estates worth over £5,000. There is no fee for estates below £5,000.
If the deceased didn’t leave a Will, you need to send form PA1A to apply for a Grant of Letters of Administration, together with the application fee.
You will need to send a certified copy of the grant to all of the asset holders, so you may want to purchase extra copies. These cost £1.50 each.
Estate Administration – Dealing with property
If the deceased left a property that you will be selling, you can consider putting it on the market once the application for a grant has been sent. While the Probate Registry will usually take at least two to three months to deal with the application, plus more time if there are queries, the conveyancing process is also lengthy.
You will not be able to complete the property sale until the grant is received, but provided there are no hitches, the grant should be available by the time buyers have been found and their solicitor has gone through the necessary due diligence work.
If we are dealing with the administration of the estate our 25 strong property team routinely handle any necessary conveyancing as well – but if you are tackling the administration of the estate yourself, we are happy to help you with any probate property sales that are involved, locally in Wiltshire and Hampshire, or nationwide. Just give our conveyancing solicitors a call on FREEPHONE 0800 1404544 or one of our four local office numbers for a quote.
When the Grant of Probate or Grant of Letters of Administration is received
When the grant is received, you should send a copy to all of the asset holders and creditors. This notifies them that you have the legal authority to deal with the deceased’s affairs. You can ask the asset holders to close the deceased’s accounts and ask the creditors for a final bill.
They will generally return the grant to you so that it can be reused if you do not have enough copies for every asset holder.
Placing statutory advertisements
You may be advised to place statutory advertisements in the Gazette. This is an official government journal where notices can be published. Statutory advertisements have two purposes:
· You can ask unknown creditors to come forward if they are owed money by the deceased’s estate; and
· You can ask for unknown beneficiaries to come forward, for example, if the Will just refers to ‘grandchildren’ but does not name them
If the deceased owned a property, you should also put an advertisement in the local paper for the area where they lived. The advertisements should run for at least two months.
By placing advertisements, executors or administrators reduce the risk of facing personal liability for future claims from creditors or beneficiaries who were missed at the time of the estate administration.
Estate Administration – collecting or transferring assets and paying bills
Once the grant has been sent, you should start to receive money into the estate. You are advised to set up a separate account for all of the estate funds.
You can clear all of the debts and other liabilities at this point, including reimbursing funeral expenses if these have been paid out of pocket by a relative.
Some assets may need to be transferred, such as property or shares, and you can also deal with that at this stage.
If property is to be sold, that can now be dealt with.
And don’t forget that if you are handling the estate yourself, you are personally liable, as administrator, for any mistakes you make in collecting assets or paying bills. That’s 1 of many reasons why people often appoint solicitors to handle estate administration.
Preparing estate accounts
Once all of the bills have been paid, property and valuable items sold and all of the money received from the asset holders, you will be able to prepare the estate accounts.
These will need to include the following:
· A summary page giving details of the deceased, date of death, date of the Will, the name of the executor or administrator, the names of the beneficiaries and what they are entitled to receive
· A list of the assets and liabilities and their value
· The Inheritance Tax account, including exemptions
· The capital account setting out any change in the value of the estate, for example, where the property sold for more than it was valued at, and any subsequent Capital Gains Tax liability
· The income account listing estate income
· Expenses incurred during the estate administration
· The distribution account showing how much is being transferred to each beneficiary, to include any assets they have received directly
Only residuary beneficiaries are legally entitled to see the estate accounts. These are beneficiaries who have been left all or a share of the residue of the estate. This is the part of the estate that is left after all specific gifts have been made, for example, £5,000 to a named individual.
Distributing the estate
Once the estate accounts have been prepared, you can ask the residuary beneficiaries to approve them and then send funds to the beneficiaries.
You should also send them a receipt to sign and return to you, acknowledging that they have received their share.