What you need to know

A family member has died and I am named as executor in the Will, do I need to involve a solicitor?

Dealing with the estate of a deceased family member or friend is a responsibility for which many people are unprepared. You may wish to deal with matters personally and you can deal directly with the Probate Registry and Tax authorities. Alternatively you can ask legal professionals to deal with certain aspects or to undertake all of the work involved on your behalf. It can help you to decide how best to proceed if you know more about what is involved (see separate question and answer below).

Will I be reimbursed any expenses I incur when I am sorting out the estate and what about charging something for the time I will be spending?

You are entitled to recover out of pocket expenses such as travel costs and should keep detailed records of such expenditure and relevant receipts. Generally speaking, a person who is not dealing with an estate in a professional capacity is not entitled to charge for time spent dealing with the administration. However, if you decide to instruct a professional to deal with matters on your behalf, the professional’s fees can properly be recovered out of the estate.

What happens if something goes wrong?

You should bear in mind that you may be personally liable if a problem arises (for example if you overlook payment of a creditor when distributing the estate or if you do not interpret the provisions of the Will correctly).

Taking expert advice can help you to carry out your duties correctly or you may decide to pass the responsibility on altogether by instructing legal professionals to deal with matters on your behalf.

What does administering an estate involve?

Administering the estate of a deceased person is the responsibility of those named as executor in the Will (or those entitled under the rules of intestacy which apply if there is no valid Will). Administering an estate broadly speaking involves:-

Establishing what the assets and liabilities of the deceased were at the date of his death and obtaining date of death valuations;

Calculating and arranging payment of any Inheritance Tax that is due;

Obtaining a Grant of Representation – the form of legal authority granted to the person entitled to administer the estate - by completing and filing the relevant court forms and attending an interview at the Probate Registry;

Collecting in the assets and settling the liabilities of the deceased-which generally requires production of the Grant of Representation or an official copy of the same to the relevant holding companies, the Grant of Representation is also required before any sale of the deceased’s house or other land owned by the deceased can be completed;

Ensuring the deceased’s tax position to the date of death has been closed off and accounting for any income and capital gains tax due in relation to the period whilst the estate is being administered;

Distributing the estate in accordance with the Will to those named as beneficiaries or in the absence of a Will in accordance with the strict rules of intestacy (it is advisable to keep detailed accounts of all dealings with the estate which can be produced to the beneficiaries and approved by them prior to distribution).

Who is entitled to the estate if there is no valid Will?

In the absence of a Will the intestacy rules will apply to determine how the estate of the deceased will be distributed. The person or persons who are entitled to benefit from the estate under the intestacy rules will generally be authorised to take out the Grant of Representation. In that case he she or they are called ‘administrators’ rather than executors and the Grant of Representation is more specifically referred to as a ‘Grant of Letters of Administration’.

The intestacy rules are complicated and broadly speaking provide for the estate to pass to nearest blood relatives in a particular order of priority and with certain limits on the amount to which a surviving spouse or registered civil partner and others are entitled.

In the absence of a Will you should seek advice from a legal professional to find out how the intestacy rules will in fact apply.

Is a Grant of Representation always needed?

Where the value of assets in the sole name of the deceased is very low, typically under £15,000, it may be possible to deal with these without a Grant of Representation under the relevant holding company’s ‘small estate procedure’.

Assets owned jointly by the deceased and another person will generally pass automatically to the surviving co-owner rather than under the Will or intestacy rules.

When is any Inheritance Tax due to be paid?

Generally any Inheritance Tax must be paid to the Capital Taxes Office before the issue of the Grant of Representation and within 6 months from the date of death (although an instalment option is available for certain types of property such as land). Interest may run on late payment.

If you think Inheritance Tax is likely to be relevant then you should consider seeking professional assistance to ensure that this is dealt with correctly, in good time and with any relevant exemptions and reliefs claimed.

There may be opportunities to save present or future Inheritance Tax through a Deed of Variation effectively rearranging a persons estate tax efficiently after the event (with an appropriate Deed executed within two years of the original death).

N.B. This is intended as a brief guide to the key stages of administering an estate and is no substitute for tailored advice on the particular facts. If you are unsure as to your legal responsibilities in connection with a particular matter then you should take specific advice from a legal professional. Please contact us and we can discuss how we can help you.