What to do when someone dies
As an Executor, your job is to ensure that the wishes of the person who died are adhered to, wishes which will usually be set out in a Will.
Your role as executor may comprise of one or more of the following;
Registering the death
You should register the death within five days at the Register Office local to where the person died. You will need to contact the Register Office in advance to make an appointment.
Granting of Probate
This is the Court’s confirmation of your authority to act as Executor. You will receive a Grant of Representation or Grant of Probate from the Court. If no Will exists, a close relative or surviving spouse can apply to deal with the estate and receive a Grant of Letters of Administration.
Telling everyone who needs to know
Identifying assets and liabilities: As well as friends and family you will need to notify a number of organisations. We recommend phoning them in the first instance to check their requirements. Once you have notified them, it’s usual for accounts to be frozen.
‘Tell Us Once’ is a service offered by most local authorities on behalf of the Department of Work and Pensions (DWP). The service allows the bereaved person to inform central and local government services of the death at one time rather than having to write, telephone or even attend each service individually. Using this service can save you a great deal if time and effort.
Valuing the Estate’s assets and liabilities
Assets: Whilst the deceased’s accounts are frozen you will not have the power to move money or make financial decisions until Probate his granted. Until that time, monies remain invested and will be subject to normal market fluctuations. There could therefore be a difference between the Probate Value and the actual value when investments are sold.
Inheritance Tax is based on the Probate Value not the sale price.
- If the value of the assets has fallen significantly you may be able to claim for Inheritance Tax Loss Relief.
- If the value of assets has significantly risen no further Inheritance Tax is payable but Capital Gains Tax may be payable.
Property and land should be valued by an RICS qualified surveyor. If there are overseas properties or assets, you will need to consider the law and tax situation in that country.
Liabilities: As well as debts, such as mortgages, credit cards etc. there may be outstanding bills or overpaid benefits. There will also be other bills to settle, such as the funeral expenses and legal costs as well as your own expenses.
If it appears that the liabilities will exceed the value of the assets we strongly recommend you pause proceedings and talk to us.
Identify the beneficiaries – as detailed in the Will
The beneficiaries of the estate should be clearly detailed in the Will. The legacies might be listed as set amounts or as percentages of the estate and should also be clear.
If the Will contains provisions for a Trust to be established, you should contact those nominated as Trustees. In most cases, the Will itself is sufficient to create the Trust and no further documentation is required.
We will be able to help you if the Will is not clear or if the Will is being contested.
Pay tax and liabilities
Once HMRC has been informed they will confirm what needs to be paid. It can take some time to confirm that all the tax affairs have been settled.
Inheritance Tax is charged on the transfer of assets above a threshold ‘the nil rate band’. The current charge is 0% below this threshold and 40% above. The rules about qualifying for other available allowances are very detailed and we recommend you take advice if the estate appears to be subject to Inheritance Tax.
Collecting assets and distributing the estates
Once the Grant of Probate has been issued the final part of the process is the collection and then distribution of the assets according to the Will. Any outstanding mortgages, loans and debts can be cleared before the assets are distributed to beneficiaries. Some assets may be sold perhaps to repay debts and liabilities. Others might be retained and transferred to new ownership. An advantage of this is that the assets can be passed to beneficiaries without sale costs but should only be done in accordance with the Will.
If there isn’t a Will or you have concerns about its validity please speak to us before taking any action.
For further advice or assistance, please contact us.