The Way Forward
We know that the death of a loved one can be a very emotional, traumatic and confusing time. Below we have put together some useful tips for those dealing with matters themselves, or just wanting to better understand the key steps of the administration of their loved one`s estate. The below list is not exhaustive and we would always recommend speaking with a specialist Probate Solicitor but we hope you find the below somewhat useful in the mean time.
1. Register the death
When your loved one has sadly passed away the first thing you should do is register the death. This can be done online at https://www.gov.uk/register-a-death. Once the death has been registered, the Executor of the Will or the deceased’s next of kin will receive the death certificate. This should be kept safe but multiple copies can be ordered if needed.
2. Secure and identify any property, financial documents and the Will itself
It is important as Executor or Personal Representative that you are aware of what the estate is made up of. Usually, you will have to go through the deceased’s papers in order to identify any assets or liabilities. In some cases, if the deceased had an accountant, you may be able to ascertain some information from them. An Executor must also be aware of where the original Will is stored. When all documents have been located, the documents must be kept safely and securely and preferably in a fire proof safe.
3. Arrange the funeral
There may be wishes in the Will regarding the funeral arrangements, or the scattering of ashes. If there is no insurance policy or liquid funds to pay for the funeral, ensure whoever pays or who forms contractual relations with the funeral parlour retains receipts to recover their expenses from the estate.
4. Will or No Will ?
If there is a Will then there shall be an appointed Executor who will administer the estate. If there is no Will then the rules of intestacy apply and the deceased`s Spouse or family member will apply to the District Probate Registry to be appointed as the Personal Representative of the estate, much the same as an Executor.
If there is a Will then the Executor has immediate authority to deal with the estate. Depending upon the size and complexity of the estate you may require a Grant of Probate to prove the Will. This will be necessary when the estate has many tens of thousands of pounds or there is a property to sell which is very common.
5. Inheritance Tax
Each person`s estate has a nil rate band of £325,000 meaning the threshold for paying IHT is above £325,000 and the tax percentage is charged at 40%. The nil rate band can be higher topped up if you leave your home (your main residence) to a direct family relation, this is presently £175,000 meaning your estate will not attract IHT if it is £500,000 or less in value.
It is also possible to transfer the unused nil rate bands of a previously deceased spouse which can further top up the nil rate band applicable to the estate of the now deceased person. It can be complex determining what percentage of nil rate bands can be transferred and so we recommend that you seek independent legal advice.
Be Careful!! If you are close to the IHT threshold, it is crucial to obtain independent legal advice to ensure the estate is valued correctly otherwise the Executors could be in breach of their duties to the estate or the Beneficiaries. At the very least, and before embarking upon the administration process, we would recommend always getting initial legal advice from a speclialist Probate Solicitor.
6. Applying for Probate / Letters of Administration
You will lodge the inheritance tax forms (IHT 205 or IHT400 forms) at the same time as the PA1P or PA1A Probate application. From the point of submission the District Probate Registry take around 8-12 weeks to issue the Grant or Letters of Administration from submission. Of course this time scale can be varied if the District Probate Registry is particularly busy or if HMRC have to approve an inheritance tax calculation.
7. What if there are multiple Executors in different locations ?
If there are Executors to a Will in various locations, either in the same country or not, it can be decided between the Executors if it would be more appropriate for an Executor to be an Executor with power reserved to them. This allows one Executor to act in the administration of the estate whilst the other Executor with power reserved retains rights to participate in the administration at a later date should they decide to do so.
8. Do I need to swear an Oath at a Solicitors office ?
Not any more, there is now a statement of truth on the PA1P or PA1A form meaning less trips to swear an oath before a Solicitor. A statement of truth is still very important however and if anything is incorrect or dishonestly provided then that is a criminal offence and contempt of court with grave consequences. Always make sure you are satisfied to the best of your belief and if you are not seek independent legal advice.
9. Trustee Act Notices
Once the Grant of Probate or the Letters of Administration (on an Intestacy) have been obtained, you should post a Trustee Act Notice in the local Gazette to where the deceased lived and also the London Gazette. This provides protection for the PR`s or Executors if there are unknown creditors or missing Beneficiaires. They have 2 months from the date of the publication to come forward and make their interest known.
10. Missing Beneficiaries
Before distributing the estate, you must identify and satisfy yourself as to who the Beneficiries are. ID should be verified and obtained prior to distribution to verify each individual Beneficiary. Whilst bank transfers can be made , if you are a lay Executor paying Beneficiaries it is often better if cheques are paid to the individuals as per their ID which you should retain safe copies of. You should also ask for written receipt and confirmation that their gift is discharged.
11. What if there is a claim against the estate or a disagreement between Executors ?
Sometimes Wills can be challenged, or Inheritance Act Claims can be made against the estate by certain persons. This is a complicated area of the law so it is best to seek independent legal advice from a contentious Probate Solicitor. Please contact either John Hirst or Sarah Rushworth at the firm for more information.
All information is correct on the date of posting.