Losing someone brings grief and paperwork at the same time. However, you do not need to solve everything immediately. After a death, you should start with the important steps, then move through the estate gradually.
Registering the Death
First, make sure the appropriate medical professionals know about the death. The process depends on where and how the person died.
Next, arrange the death registration when the relevant authority tells you to proceed. In England and Wales, you usually have five days after the medical examiner gives confirmation.
After registration, order enough death certificates for the organisations that may need them. You should also start a record of calls, letters, emails and payments.
Notifying the Government and Other Organisations of the Death
Next, tell the relevant organisations about the death. The Tell Us Once service can notify many government bodies at once. The service covers England, Scotland and Wales. However, it does not cover Northern Ireland.
You will still need to contact some organisations yourself, such as:
- Banks
- Mortgage providers
- Utilities
- Insurers
- Employers
- Pension providers
- Investment providers
- Councils (for Council Tax and benefit purposes)
Do not close every account immediately. Some accounts or policies may need to remain open during the estate administration. Instead, ask each provider what they need and keep a note of every response and reference number.
Finding the Latest Will
The Last Will and Testament usually tells you who should deal with the estate. It may also explain who should receive the estate.
Check the person’s:
- Home
- Solicitor
- Will writier
- Bank
- Professional advisor
If a valid Will exists, its executors usually manage the estate. Executors named in a Will can apply for Probate. Without a Will, the Rules of Intestacy decide who can inherit. An eligible relative may then apply to administer the estate.
If you cannot confirm the latest Will, consider a formal Will search.
Arranging the Funeral and Checking Available Support
You can arrange the funeral while other estate work continues.
Check the Will and personal papers for funeral wishes or a prepaid funeral plan. Funeral wishes can help families make decisions, however, those wishes do not usually create a legal obligation.
You should also check whether close family members can claim bereavement benefits or other financial support. For instance, some surviving partners can claim Bereavement Support Payment.
Building a Complete Picture of the Estate
Before you tackle tax or Probate, work out what the person owned and owed. Use values from the date of death and keep evidence for every figure wherever possible.
You should include:
- Property
- Bank accounts
- Savings
- Investments
- Business interests
- Vehicles
- Valuable possessions
- Debts
- Mortgages
- Loans
- Credit cards
- Relevant funeral costs
You should check jointly-owned assets carefully. Some assets can pass directly to another owner, depending on the ownership structure. You should also review lifetime gifts, trusts and overseas assets, as these assets can affect Inheritance Tax and Probate work.
For property, use a realistic open-market value. In contrast, consider a professional valuation for valuable property.
For bank accounts, ask each provider for the date-of-death balance and interest.
For shares and investments, ask the provider or registrar for the date-of-death value.
Checking the Inheritance Tax Position
Once you have the values, review the Inheritance Tax position.
The standard nil-rate band currently stands at £325,000 and a qualifying residence can also add up to £175,000. However, several exemptions and allowances can change the result.
For example: Transfers between spouses or civil partners can qualify for exemption. Unused allowances can sometimes transfer to a surviving partner. Therefore, do not assume an estate owes tax because its total value exceeds £325,000.
If the estate owes Inheritance Tax, HMRC may require form IHT400. The estate usually pays some Inheritance Tax before Probate. HMRC also requires reporting within one year when the estate owes Inheritance Tax.
Checking the Need for Probate or Another Court Authority
Probate gives executors legal authority to deal with certain estate assets. However, not every estate needs Probate, as some jointly-owned assets transfer automatically. Financial organisations also set their own limits for releasing smaller balances.
If no valid Will exists, an administrator may need Letters of Administration instead.
Collecting the Assets and Paying the Estate’s Bills
Once you have the necessary authority, you can collect money and manage the estate assets. However, you should keep estate money separate from your personal money.
Next, you should settle any outstanding payments before paying beneficiaries, such as taxes, debts and administration costs.
Keeping the following documentation to support the estate accounts later:
- Invoices
- Receipts
- Statements
- Payment evidence
You should also make reasonable checks for unknown creditors.
A deceased estates notice in The Gazette can help protect personal representatives from unknown creditor claims. The Gazette gives creditors two months and one day to make claims after publication. However, the notice does not replace other sensible enquires or protect against every possible claim.
If the estate cannot pay all its debts, stop being paying beneficiaries. Insolvent estates need careful treatment and professional advice.
Preparing Estate Accounts Before Distribution
Do not distribute the estate too early. First, make sure you have dealt with known debts, taxes, costs and claims.
Then, prepare clear estate accounts. The accounts should show the assets and debts at death; as well as income, costs and distributions. Additionally, give the main beneficiaries a copy where appropriate and keep evidence of any approvals or agreements.
Finally, distribute the remaining estate under the Will. If no Will exists, follow the Rules of Intestacy.
Do You Need a Will?
Our experienced team is here to help you protect your legacy with expert will writing and estate planning advice. Contact us today to speak with a specialist and discover how our personalised solutions can give you and your loved ones peace of mind.
01452 698 989 | office@willguardian.co.uk | Facebook
This article is for general informational purposes only and does not constitute legal or financial advice. While we aim to keep our content up to date and accurate, UK laws and regulations are subject to change. Please speak to a professional for advice tailored to your individual circumstances. Will Guardian accepts no responsibility for any issues arising from reliance on the information provided.