7 Steps to deal with an estate
Comprehensive Guide to Estate Administration for Legal Personal Representatives
Losing a loved one is never easy, and navigating the complex process of managing their estate can be equally challenging. If you find yourself as the 'Legal Personal Representative' of a deceased individual, this step-by-step guide is here to help you understand and navigate the necessary procedures. While this guide offers valuable insights, please remember that our team at Personal Estate Planning Estate Planning is always available to discuss your specific situation and demonstrate how we can provide assistance.
Step 1: Identifying the Legal Personal Representative
As the Legal Personal Representative, you have a vital role in managing the deceased's estate. It's essential to understand your responsibilities, including the potential pitfalls. The deceased typically designates the person or people they want to act as Executors in their will. In the absence of a will or when the named Executor cannot fulfill their role, the law outlines rules for estate administration. These rules, known as the Intestacy Rules, usually designate the next of kin or the residuary beneficiary as the Administrator. Executors and Administrators collectively form the Legal Personal Representative. It's important to note that if you're appointed as Executor or Administrator, you aren't obligated to accept the role. While some may find the process straightforward, disputes over estates are on the rise, leading to potential personal financial and legal claims from beneficiaries, creditors, and tax authorities. If you'd like to discuss your options, please feel free to contact us. For the purpose of this guide, we'll assume you are the Legal Personal Representative.
Step 2: Validating the Will
If you have located the will, it's crucial to verify its legality. A legally valid will must be in writing, signed by the person who made it, and witnessed by two adult witnesses. Professionals typically assist with additional checks, such as ensuring the will was created without undue pressure and confirming the deceased had the mental capacity to execute it. We can help you determine the validity of a will. It's worth noting that if a witness to the will or their spouse is also a beneficiary, the will remains valid, but the gift to the witness or their spouse will fail.
Step 3: Identifying the Deceased's Assets and Liabilities
Gathering information about the deceased's assets and liabilities is a crucial step. This includes:
Bank accounts, savings, cash, ISAs, pensions: Locate and assess the value of money held in cash, bank accounts, National Savings products, ISAs, pensions, investments, life insurance policies, business interests, and other savings. Gather information from financial paperwork and electronic records.
Money or property owed to the deceased: Investigate whether the deceased was owed any money or property, as these are considered assets of the estate. Prepare a list of debts, loans, and liabilities owed to others, including household bills, credit cards, mortgages, equity release, and funeral expenses. Ensure that you identify all assets and liabilities to calculate Inheritance Tax (IHT) and ensure sufficient funds for creditors.
Thorough research and valuation of all possessions, money, bonds, shares, debts, and previous gifts in the seven years prior to death are essential. Some companies offer asset search services if you're having trouble identifying assets. Redirecting the deceased's mail and reviewing bank statements for the past two years can also help uncover assets.
Step 4: Determining the Need for a Grant of Probate
A Grant of Probate or, in cases of intestacy, a Grant of Letters of Administration, is a legal document confirming the validity of the deceased's will and authorising you, the Legal Personal Representative, to administer the estate. Whether a Grant is required depends on the assets and their ownership. If you're unsure, we can assist you. You will also need to complete an inheritance tax form (IHT 205 or IHT 400) and pay any applicable inheritance tax. The tax payment must be made upon applying for the Grant of Probate. Please note that failure to pay within six months of the end of the month in which the deceased passed away may result in interest charges.
Step 5: Opening a Separate Bank Account
Once you've obtained the Grant of Probate, you can begin collecting assets and paying debts. This may involve closing bank accounts, selling property, collecting pensions, and managing stocks and shares. It's advisable to open a separate bank account specifically for the estate's financial transactions.
Step 6: Completing Tax Returns
Review the deceased's income tax affairs and submit any necessary tax returns. You may need to submit a final return to HMRC and potentially additional returns covering the administration period.
Step 7: Distributing the Estate to UK Beneficiaries
Before distributing the estate to beneficiaries, ensure that no debts are outstanding. Place a notice in the London Gazette and a local newspaper to notify creditors. After two months, if no further claims are made, you should be protected from personal liability. Distribute legacies mentioned in the will and make partial or final distributions to beneficiaries as appropriate. Prepare estate accounts and tax certificates for beneficiaries. Please remember that you can be personally liable if the estate is incorrectly distributed.
Get in Touch for Expert Assistance
Managing an estate while coping with loss can be overwhelming. Our team at Personal Estate Planning Planning has many years of experience helping individuals in your situation. We only work with with whom we consider to the best in there field We can't take hurt of loosing someone close away but we help take the stress of dealing with estate off your shoulders, ensuring the estate is managed efficiently and responsibly. Don't hesitate to reach out to us for assistance.