What is estate administration?
Estate administration is the process that personal representatives go through to collect in a deceased person’s assets, discharge their liabilities and distribute the assets to the beneficiaries. The assets can include cash, bank accounts, pensions, investments, and property – together referred to as the ‘estate’.
What is probate?
‘Probate’ is the process of obtaining the legal authority to administer the estate, whereas the term ‘estate administration’ refers to the complete process of dealing with the deceased’s estate. If the personal representatives are named in a Will left by the deceased, they will be referred to as ‘executors’ and will usually need to obtain a Grant of Probate. If the deceased did not leave any or a valid Will, those wanting to act as personal representatives will usually need to obtain Letters of Administration to be able to deal with the estate and will be referred to as ‘administrators’.
What does estate administration involve?
Although the steps involved in administering an estate will vary for each estate, if you are acting as a Personal Representative (whether as executor or administrator), generally, it is likely that you will be responsible for the following.
- Obtaining the death certificate
You will usually need to visit a register office to obtain a death certificate. If the death occurred in England/Wales, it is generally best to visit the register office closest to the place of death.
- Collating all necessary information about the deceased’s assets and liabilities
This will include investigating whether the deceased made any gifts during their lifetime and may also require you to arrange valuations of assets such as art, jewellery and properties.
You may also need to advertise for any unknown creditors to come forward to protect yourself from personal liability (if appropriate).
- Opening a bank account for the estate
As a personal representative, you are legally responsible for all the estate assets from the date of death until everything has been distributed to the beneficiaries (known as the ‘administration period’).
- Calculating the Inheritance Tax position and paying the tax when it is due
This may involve you having to negotiate with the HMRC on the values of assets such as properties.
- Obtaining the Grant of Probate or Letters of Administration
This may not always be necessary and depends on the types and values of the assets in the estate. If required, most assets will not be released without it, but sometimes institutions will release funds to pay the inheritance tax directly to the HMRC.
- Obtaining post-death estate planning and financial advice
You may want to consider this, if appropriate, to achieve inheritance tax savings for the deceased’s estate or the estate of any beneficiaries. This could involve drawing up legal documents such as a Deed of Variation.
- Collecting in all assets and paying off all liabilities
This may involve selling assets such as properties and shares, which may result in you having to settle new income tax and/or capital gains tax liabilities from the estate funds. You may also have to submit corrective accounts to the HMRC to report any amendments in the values of assets.
You may be liable to pay any outstanding liabilities yourself as the personal representative if you distribute the estate without keeping sufficient assets in the estate to pay all of them off.
- Distributing the estate to the beneficiaries
Beneficiaries may include legatees noted in a Will. If you are unable to collect in all assets straight away, you can use your discretion to make interim distributions to residuary beneficiaries.
Distribution may also involve the transfer of property or other assets to the beneficiaries rather than selling them.
- Prepare final accounts
These should generally be approved and signed by you and the primary beneficiaries.
Do I have to be a Personal Representative?
As you can see from the above, acting as a personal representative can involve a great deal of personal and legal responsibility. It can be quite a daunting and onerous task, that you may not wish to take on.
Please click here to access our article on the options available to you as an executor named in a Will.
If you are appointed an executor in a Will but do not wish to take on the role, you could renounce, or you could contact us here at Gordons Partnership, where our experienced solicitors will guide you through the entire estate administration process and take the weight off your shoulders as much as possible. We can assist with particular aspects of estate administration or handle the whole process for you. We can also help you if the deceased did not leave a Will and you need to administer the estate under the laws of intestacy.
Estate Administration Solicitors Guildford
At Gordons Partnership, we recognise how distressing the loss of a loved one is, especially if you have been appointed as the executor of the Will.
We can help you whether you require a full estate administration service or assistance obtaining the Grant of Representation.
Please call us on 01483 451 900 (Guildford) or 020 7421 9421 (London), email sols@gordonsols.co.uk or fill in a contact form today.