It’s not always obvious what to do when someone we love dies, particularly in the midst of emotional turmoil. Here David Hill, Head of our Probate and Estate team, looks at the steps needed to sort out your loved one’s affairs, using the example of a client we will call Mrs Jones.
Register the death
Mrs Jones died in hospital. In this case, the hospital doctor will issue a certificate for the Registrar of Births Deaths and Marriages. The registrar will then conduct a short interview and take the following details:
- The name of the deceased
- Their date of birth
- Their occupation
- Their place of birth
The registrar will then issue a death certificate. At this time you have the opportunity to purchase multiple copies, which may be useful if you need to notify a lot of companies.
Contact the funeral directors
It is a good idea for either you or your solicitor to contact the local funeral directors to start making preliminary arrangements and set a date for the funeral which all the family are able to attend.
Find the paperwork
The next step is to locate all paperwork relating to bank and building society accounts, savings, investments and insurance documents for the house and its contents, and also to ensure that the house is secure. It is imperative that the insurance company providing house and contents cover is informed that the property is unoccupied, as this can affect the cover provided, particularly during the winter months. Now is a good time to have the house and its contents valued. You should notify the bank and other financial institutions about the death and ask them to confirm exactly what they hold for the deceased.
Assets and Liabilities
Once you have informed all the relevant financial institutions, confirmation of the accounts will start to arrive. It is crucial that you keep an accurate record of all the assets and liabilities that form part of the estate, as a copy will need to be given to all the beneficiaries when payment is made. We were able to confirm that the total value of Mrs Jones’ assets, including her house, was in the region of £750,000, indicating that inheritance tax would be payable.
Executor duties include confirming whether investments should be sold or transferred to beneficiaries, and making decisions about the sale of the house. Appointment as an executor is not mandatory so you can decline. Mrs Jones’ nephew felt it would not be practical to take an active role and he declined the role of executor.
Grant of Probate
A Grant of Probate is a document issued by the High Court confirming who is responsible for and has the authority to deal with someone’s estate following their death. It will enable bank accounts to be closed and the house and investments to be sold or transferred to beneficiaries. Mrs Jones’ assets will be frozen until a Grant of Probate can be issued.
To apply for a Grant of Probate you must submit an Inheritance Tax Return detailing a schedule of all assets and liabilities and confirming what tax is to be paid. We estimated it would take 3-4 weeks for the inheritance tax office and probate registry to process Mrs Jones’ papers and issue the Grant of Probate. In the meantime we arranged to release funds to cover the initial inheritance tax liability.
Go back to the companies where assets are held
Once the Grant of Probate has been received, copies are circulated to the bank and financial institutions. When the funds are released, they can either be held on our client account on behalf of the estate, or the executors can choose to open a bank account in the estate’s name. This would also include money from the sale of the house.
It is vital that the funds are then used to pay any outstanding bills. An executor can become liable to HMRC for any outstanding tax owed by the estate if they do not ensure that everything due is paid. When all bills and tax liabilities are paid, HMRC will confirm that their files have been closed and this signals the completion of the administration of the estate. A full detailed inventory of the monies received and paid in relation to Mrs Jones’ estate, the estate accounts, will be prepared and approved and the remaining monies transferred to Mrs Jones’ nephew and niece, bringing the matter to a close.
This is intended as an overview of the administration of an ‘average’ estate but each case will differ.
We are happy to have a free, no-obligation discussion with anyone who has been appointed an executor (or an administrator in the case of an estate where there is no Will). Please contact David Hill in our Bath office.