When someone dies, their Personal Representatives (PR) are legally responsible for their money, property and possessions. You are a PR if you have been named in a person’s Will as their Executor or, if they do not have a Will, if you are entitled to act as an Administrator under the rules of intestacy.
A PR is responsible for the estate assets from the date of death up until the date everything has been distributed to the beneficiaries. This period of time is often referred to as the ‘Estate Administration’.
The PR of a person’s estate must ensure the death is registered as soon as possible, obtain the death certificate and communicate any funeral wishes.
The PR gathers all the financial documentation relating to the deceased. Financial institutions, utility companies, insurance companies and any other organisations the deceased had dealings with, will need to be contacted, notified of the death and questions asked as to the date of death values of the assets and liabilities of the estate. A useful service at this stage is the governments ‘Tell Us Once Service’ which contacts certain organisations to inform them of the death so that you don’t have to.
Once the date of death values of the estate have been obtained, this information is used to calculate the amount of (if any) inheritance tax due. For inheritance taxable estates, an inheritance tax report will need to be submitted to HM Revenue and Customs and any inheritance tax due paid. For taxable estates, HM Revenue & Customs issue a penalty if the report is submitted after 6 months from the date of death and interest will accrue on any inheritance tax due, until it is paid.
The PR will need to obtain a Grant of Probate or Grant of Letters of Administration (Grant) which is the document which gives the PR authority to deal with the estate assets. The Grant is obtained once any inheritance tax due has been paid and an application has been submitted to the Probate Registry.
When the Grant has been obtained the PR can begin collecting in the estate assets and once in funds can then look to discharge the liabilities of the estate.
It is often advisable to carry out additional professional searches as to the assets and liabilities of the estate. There are also advertisements that can protect a PR from unknown creditors to the estate. It is important that the PR finalises the Estate Administration income and capital gains tax position by a report (often Tax Return) to HM Revenue & Customs and that any additional tax due is paid.
When the PR is confident there are no claims against the estate, additional liabilities or payments to be made from the estate, they can carry out the necessary bankruptcy searches on the beneficiaries and begin to distribute the estate in accordance with the Will or, if there is no Will, the rules of intestacy (a genealogist report may be required to confirm the family tree to ensure correct entitlement and distribution).
If you would like assistance in relation to an estate administration, please do not hesitate to contact our: Trusts & Estates Department on 01244 354800 or email: heather.lally@dtmlegal.com or information@dtmlegal.com
This information is not intended to be comprehensive or to provide specific legal advice. It should not be relied upon in the absence of specific advice given in relation to particular circumstances.