When a person dies leaving a will which appoints executors, these executors become the personal representative of the deceased, with legal responsibility to wind up the deceased’s affairs and administer the estate in accordance with the terms of the will. If there is no will, the deceased’s estate is wound up by one or more administrators as personal representatives, in accordance with the statutory order of priority set out in the intestacy rules.At the moment of death, the estate of the deceased passes to the executors appointed in the will. Their authority and that of the personal representatives in an intestacy to administer the estate, however, is confirmed by obtaining a grant of probate from the Probate Registry of the High Court. If the grant is to a personal representative in an intestacy it will be known as a grant of letters of administration.
In most family estates, the administration will be straightforward (although time-consuming) and well within the capabilities of most people. It is only if it is a large complicated estate involving settlements and trusts or a possible claim by a disappointed beneficiary that professional assistance is likely to be necessary. In a family estates, the executors appointed will often also be beneficiaries and they will see little point in allowing legal fees to eat into their inheritance. They will also be the people who knew best the deceased’s affairs, and therefore the best people to wind them up. With a little bit of help and guidance on what has to be done, there really is no need to spend what would be thousands of pounds in employing someone to do what you are quite capable of doing yourself.
If an estate is under £5,000, it may be possible to carry out the administration without obtaining probate or letters of administration. This may be the case when the main asset is a house held in joint ownership by a husband and wife as joint tenants, and there is little else in the estate. The house passes automatically to the surviving joint owner, not under the will, but by process of law.
In these cases, it may only be necessary to sign a declaration form with a bank or building society in order to transfer the account of the deceased to the PR. Other small amounts could be transferred in a like fashion and personal possessions simply handed over to those entitled.
The duties of an executor or PR can be considered to fall into 3 categories. Firstly, matters that need to be attended to immediately following the death. These will include together with many other things:
• Registering the death;
• Making the funeral arrangements;
• Safeguarding the house, removing any valuables for safekeeping. and providing a contact number;
• Making arrangements for any pets;
• Checking the terms of any insurance policies, and advising the insurance company of the death;
• Considering having services disconnected;
• Arranging for post to be redirected;
• Informing the deceased’s bank and credit card companies of the death.
The second category of duties will be determining whether a grant is required and if so, applying and obtaining the grant.
To obtain a grant of probate or letters of administrations it is necessary to file at the appropriate probate registry the following forms:
• Form PA1. The probate applications form;
• Form IHT 205. The inland revenue return of assets and liabilities.
Once the papers have been lodged and approved, an appointment will be made for the executor to attend at the Registry to sign and swear an ‘executor’s oath’. A fee will then be payable. If any inheritance tax is due, this must be paid before the grant is made.
Once probate has been obtained, the third and final stage of the administration is to pay all debts of the estate, call in all assets, and then distribute the estate according to the will.
These duties may involve:
• Finding out what assets, property and investments the deceased owned at the time of death;
• Arranging for the valuation of assets and listing them and their current value;
• Obtaining details of outstanding debts and bills;
• Establishing pension entitlements and other monies due to the estate;
• Determining income and inheritance taxes liabilities and making any necessary tax returns;
• Ensuring the validity of the will;
• Opening an administration bank account;
• Calling in the assets;
• Paying off the debts;
• Distributing the estate in accordance with the will or intestacy rules.
Once this has been done, the personal representative should prepare accounts of the administration. Typical accounts will show the capital and incomes derived from the estate, debts paid and contain a distribution account.
We have an Ebook available for download which tells you all that is needed to administer a family estate.