If someone close has died and you’re responsible for dealing with their estate, the administration involved can feel overwhelming.
In the first of our 2-part series, we look at what to expect, the actions to take, and where to find more help if you need it.
What is a personal representative?
Named by the person who has died in their Will, personal representatives are also known as executors or administrators, and are appointed by the person who has died to deal with their estate.
Executors may need to apply for the legal right to handle the estate by obtaining probate. If there’s no Will in place, an administrator will need to apply for “letters of administration” instead.
This article explains what to expect from probate where there is a Will in place.
If a person dies without leaving a Will, find out more about probate processes in this article.
What does the estate consist of?
An “estate” comprises everything owned by the person who has died and may include:
- Money held in cash or in bank or building society accounts
- Property such as their home
- Shares and other investments
- Possessions and assets such as a car, jewellery and other belongings
- Money that is owed to the person who has died
Who does the estate go to?
The estate will be passed to beneficiaries named in the Will in most cases.
If there’s no Will, distribution of the estate is subject to the rules of intestacy – laws which do not take into account the wishes of the person who has died, but instead distribute the estate to closest living relatives.
How is the estate managed and sold?
As a personal representative, you’ll be responsible for realising the value of the estate and distributing it to the beneficiaries, as well as settling any debts and payments owed by the person who has died, such as taxes and dealing with unpaid bills.
Your role may include tasks such as:
- Locating financial and other information, registering the death and obtaining the Death Certificate
- Notifying the banks and building societies where money is held, requesting confirmation of account balances and any income received, and freezing bank accounts so that no money can be withdrawn without consent
- Paying off any debts owed by the person who has died, such as unpaid bills, credit cards, rent or taxes
- Sale of property, shares, other assets and belongings
- Pay any Income Tax on money received into the estate, such as rental income or business profits
- Reporting the estate value and tax liability to HMRC, and paying any taxes due including Capital Gains Tax if due from the sale of assets such as shares or investments
- Calculating any Inheritance Tax due and making payment to HMRC
You may wish to open a bank account purely for the management of the estate into which sale proceeds and other funds can be paid, and out of which taxes can be paid.
Managing the estate’s taxes
Using the government’s Tell Us Once service allows you to let most government departments know about a death with one notification.
When you register the death, the registrar will give you details of Tell Us Once, which notifies departments such as HMRC, DVLA, the local council and the Department for Work and Pensions.
HMRC will advise as to any taxes owed by the person who has died, or whether any tax refunds are owed to them. As part of your personal representative role, you may need to complete a Self Assessment tax return to account for any income earned by the person who has died prior to their death.
The estate may continue to receive income after the person’s death, such as rental income, interests or dividends from shares or other investments. Income Tax will be payable on all income received by the estate between the day after the death and the date when everything is sold or transferred.
Who else should I notify?
When it comes to managing the estate’s tax and financial affairs, you may need to notify any pension providers of the death.
You should also place a notice of the death in The Gazette, which is the official Crown newspaper and the country’s official public record, giving anyone owed money by the person who has died 2 months’ notice to make a claim. There’s more information about deceased estate notices on The Gazette’s website.
A Will makes things easier for those close to you
A Will makes life easier for those you leave behind.
Not only will you have protected their interests, particularly if you live with a partner or where you have dependents, but by making some difficult decisions for them – such as setting out what is to happen to your estate after you die, who is to manage your estate and what is to happen if any executors die before you – you’re helping them through what is likely to be a challenging time.
Next month, part 2 of our guide looks at paying taxes and distributing the estate to beneficiaries.
This article has been prepared by Adroit Legal Services and is not intended to constitute legal advice.
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The National Bereavement Service supports anyone who has experienced a bereavement, including sudden or traumatic bereavement, with practical and emotional information and advice from professional bereavement advisors with real, lived experience.
We help you to comply with legal requirements, signpost you to providers such as funeral directors and solicitors, and provide a listening ear that helps you through a very difficult time.
For personal, confidential, and practical help following a bereavement, or for advice when planning your future, call the NBS on 0800 0246 121 or visit www.thenbs.org
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