Wills Probate & Trusts
The administration of an estate is the process of distributing the deceased person’s assets according to their will, or to the rules of Intestacy. This is performed by a personal representative (either an executor or administrator) and this page will give an indication of their roles and responsibilities with a rough estimate of time scales as well as answering some frequently asked questions.
Valuing the Estate
The estate is all the assets and property of the deceased. This will include bank balances, property, money paid out by life insurance, debts owed to the deceased, company shares and investments and any personal property such as jewellery or cars.
However, this also includes all of the liabilities, the debts the deceased owed. This could include car loans, mortgages or tax owed. The representative must contact any bank, building society, insurance company, HMRC or other institution and request all financial information about the deceased. They will normally require that a Death Certificate is provided before divulging any information. When assessing the tax liability, remember to account from the beginning of the financial year to the date of death.
This may take between 8 to 12 weeks.
Obtain Grant of Representation and Preparing Inheritance Tax Accounts
Once all the financial information has been collected, the representative must then produce an Inheritance Tax Account. This will detail the value of the estate and its tax liability. The representatives must then produce and sign an Oath for Executors/Administrators. This should take no more then 2 weeks, depending on the availability of the representatives.
The Inheritance Tax accounts should then be submitted, and arrangements made to pay the tax. This may take up to 4 weeks.
If a Grant of Probate or Letter of Administration is necessary then these should be applied for. The Grant should take between 2 or 3 weeks.
Collect Assets and Pay Liabilities
Register the Grant of Probate or Letter of Administration and then collect the assets held by banks and other companies. They will need to verify the documents you provide, so this may take up to 6 weeks to complete.
If there has been any sale of property or other asset, ensure that any tax on that sale has been paid. Ensure that any Income tax or Capital Gains tax has been paid.
Next the estate should pay all outstanding liabilities and debts. This may take between 4 to 8 weeks depending on what liabilities remain.
Depending on the size of the estate and its complexity of the estate there may need to be an additional Inheritance Tax account to finalise the estate, respond to any enquires by HMRC or submit a corrective account. This can be a long process and can take between 9 and 12 months for a large matter.
Additional Income Tax Return may need to be prepared for the administration period. Also Tax Deduction certificates and HMRC clearance should be obtained.
Finally, the estate accounts should be prepared. These require approval by the representatives and the beneficiaries before the final distributions can be made. This may take between 4 to 6 weeks.
A relatively simple matter that doesn’t require a Grant of Probate can be concluded within 6 months.
A complex matter requiring a grant of probate and extensive tax liabilities could take between 1 and 2 years to conclude.
Who is the Personal Representative?
A personal representative is either an executor, having been named in a will as such, or an administrator if the deceased died without a will or any executors.
Is a Grant of Probate necessary?
A Grant of Probate, or Letter of Administration, is not always needed to administer to an estate, if it matches any of the below.
- The property is owned as Joint Tenants as this automatically transfers to the other owner.
- The money is held in a joint bank account.
- The values in the accounts are small, though this is decided by each bank or company independently.
- The estate is made up of cash and personal property, i.e. there are no houses or other land property in the estate.
- The estate is insolvent, that is where the debts and liabilities of the estate are larger then the value of the estate.
- Certain pension providers and life insurance policies do not require Probate.
Is a solicitor necessary?
It is not necessary to be a solicitor to act as an executor or administrator, and a simple estate is unlikely to need any legal advice. However there are some scenarios when a solicitors advice should be sought. Any legal fees incurred can be paid from the estate.
- Where a will is unclear or contested.
- Where the estate includes property or money to be held in trust.
- Where a beneficiary is under the age of 18.
- Where the estate includes a business.
- Where the estate includes a property held overseas.
Estate Insurance Policies
Many will writers often try to sell insurance policies to protect against the cost of administering an estate. They sell the insurance on the basis that for a cost of between £12 and £40 per month they will assist with the costs of administering the estate. However, these policies are often completely unnecessary.
In most cases, where a person's estate is under the inheritance tax threshold, an executor can administer an estate without personally incurring fees. If the executor prefers to instruct a solicitor to administer the estate, the charge made by the solicitor is likely to be considerably less than the cost of the premiums paid over a ten to fifteen year period. If the will writing company were to cease to exist, of course, all the premiums paid, would be lost.