Lawpack

Q: My best friend has just died and she has named me as executor in her Will. She was married, and didn’t have much property or money. Where do I start? Do I have to take the job? If I do, do I need to appoint a solicitor?

A: If the Will is very straightforward and not much money is involved, you should not require a solicitor and can do probate yourself.

To start the process, you need to go through her paperwork and take a look at the following:

• Her assets – any investments, pensions or insurance policies which pay out on her death
• Her property – does she own her own home or is it owned jointly with her husband?
• Her debts – does she have any? Or does anyone owe her?
• Tax – does she owe any?

One of your duties as executor is to pay any debts from the estate, as well as find out if anyone owes her estate any money and reclaim the money that is due.

You also need to distribute any gifts to the beneficiaries mentioned in her Will.

If your friend didn’t leave much money and only has a small amount in her accounts, you may be able to gather her money together and pass it to her beneficiaries without obtaining a Grant of Probate.

Most banks will hand over amounts of money under £5,000 without seeing a Grant of Probate, but they may ask you to sign an indemnity to protect them from risk.

But if your friend has more than £5,000 in one account, or an insurance policy on which the estate can claim, or a pension, you will need a Grant of Probate.

A Grant of Probate is a document that gives you the authority to manage the estate. Find out more on what a Grant of Probate is and how to apply for a Grant of Probate.

You need to complete various probate forms in order to apply for a Grant of Probate. Lawpack’s DIY Probate Kit provides you with all the probate forms you need, plus expert guidance on how to fill in the forms.

These forms must be sent to your local Probate Registry and you will need to attend an interview. The Grant of Probate will then be sent to you.

As executor, you must also consider Inheritance Tax. If the estate is less than £325,000, then Inheritance Tax will not have to be paid on the estate. However, you will have to complete a probate form, regardless of whether Inheritance Tax is applicable or not.

Find out if Inheritance Tax is due on your estate.

If all these duties seem incredibly daunting, then Lawpack is here to help. We publish a DIY Probate Kit, which guides you through the process. Alternatively, we have teamed up with probate experts Kings Court Trust who offer a Probate Assist service, where they will complete the forms for you and all at a fixed price.

If you just have any questions and need some reassurance, then call Kings Court Trust’s Probate Advice Line. They offer FREE, non-pressurised advice on 0800 975 7877.

Finally, if you really don’t want to get involved in doing probate at all, you can appoint someone else to act as your attorney or renounce your role as executor by completing a form of renunciation.

 

Related articles

• Probate: Where do I start?
• What are an executor’s duties?
• Top seven tips for executors
• What to do after a death: the next steps

 

Published on: September 18, 2012

Many relatives end up in a very difficult situation when a loved one dies leaving debts, especially if the death is unexpected.

At such a painful time, many people are reluctant to think about dealing with the debts of the deceased and how to make repayments.

Many people assume that the deceased’s debts will be written off, but this is generally not the case and the debts continue.

Dealing with a person’s assets and debts when they die

When someone passes away, a person name in the deceased’s Will – called an ‘executor’ – or the next of kin if the deceased didn’t make a Will – called an ‘administrator’ – will have to oversee the collection of the deceased’s assets to form their estate.

Whether a Will is made or not, any outstanding debts are paid out of the estate.

As part of their duties, the executor (or administrator) must collect in any money or property the deceased has left behind and cover and outstanding debts from the estate.

What to do if the debts can’t be covered from the deceased’s estate

If there are not enough assets to cover all the debts, the bills will need to be paid in order of priority, as follows:

1. Secured debts (e.g. mortgage company) are paid first because they get their money from the security
2. The costs of administering the estate along with funeral costs are then paid in priority to everything else.
3. The remainder is divided in proportion to the value of the debts, i.e. if someone is owed 80% of the total they are paid 80% of the remaining assets.

The beneficiaries will only inherit what they have been left in the Will once all the accumulated debts have been repaid.

Who is liable for the debts?

No one else is required to pay for the debts unless they are already liable under the terms of the original agreement; for example, if the debt is in joint names or someone has signed as a guarantor.

If the money left in the estate isn’t enough to cover the outstanding debt and you jointly owned a house with the deceased person, for example, you may have too sell the property to meet creditors’ demands.

What about money owed to the deceased?

It’s the executor’s (or administrator’s) responsibility to decide in cases when there is money owed to the deceased person, especially when there is a written agreement in place.

But if the borrower and the lender have agreed on the debt on a casual basis, it will likely remain irrecoverable since it could be impossible to prove.

 

Related articles

• What to do after a death: the next steps
• How to value the debts of an estate

 

Published on: August 30, 2012

by Nigel Merchant, Kings Court Trust

Nigel Merchant, a Regional Probate Consultant at probate specialists Kings Court Trust, has visited hundreds of bereaved families to discuss, and quote a fixed price for, the administration of their deceased loved one’s estate. One of the points that customers enquire about again and again is the question of Inheritance Tax (IHT):

How is IHT paid? Where does the money come from with which to pay the bill?

The answer is that, if there is any IHT to pay, it will be the estate that pays it.

Here Nigel answers your frequently asked questions on paying Inheritance Tax when someone dies:

Is Inheritance Tax payable on the estate?

Every estate has a tax-free sum (known as the ‘nil-rate band’) of £325,000.

This means that if the estate, after all the debts, mortgages, any other liabilities and bequests to charity and/or spouse are taken into account is worth £325,000 or less, there will be no Inheritance Tax to pay.

If, after these deductions are taken into account, the deceased’s estate is worth more than £325,000, then IHT is payable at 40 per cent of everything over the tax-free sum.

For example:

After all the deductions mentioned above, the deceased’s estate is worth £330,000.

Tax would be payable at 40% of the difference between the tax-free sum of £325,000 and £330,000, which is 40% of £5,000, i.e. £2,000.

How to make the most of a spouse’s tax-free sum

It is possible to use the pre-deceased spouse’s (or civil partner’s) IHT tax-free sum, if they didn’t use it all themselves.

For example:

If your Dad dies with an estate after deductions of £225,000 and leaves it all to his children, when Mum dies her estate will have its own tax-free sum (£325,000) AND an extra £100,000 left over from Dad’s estate (assuming Dad’s tax free sum was £325,000 when he died), giving a total tax-free sum after all deductions of £425,000.

Similarly, if Dad leaves his entire estate to Mum (there is no Inheritance Tax payable between married couples), her estate will have both tax-free sums, a total of £650,000.

If Dad had left the £225,000 to the children, there would be £100,000 of his tax-free sum left over, as we saw in the example above.

But if the family and everyone else concerned agreed, it would be possible to vary the terms of Dad’s Will (within 2 years of his death) to leave more of his estate to Mum so that, when she died, her estate would benefit from a higher tax-free sum.

Kings Court Trust can prepare the necessary paperwork to do this. Call them on 0800 975 7877 to discuss further and get free advice.

This article has been reproduced from Kings Court Trust’s website.
Kings Court Trust are specialists in probate and estate administration at a fixed price. They are authors of Lawpack’s DIY Probate Kit and provide fixed-price Probate Assist Services.

 

Other information

• 7 steps to saving inheritance tax
• How to reduce inheritance tax liability
• Could you be due an inheritance tax rebate?
• How to complete probate form IHT205 when IHT isn’t due on the estate
• How to complete probate form IHT400 when inheritance tax is due

 

External links

• HMRC: Transferring an unused Inheritance Tax threshold
• HMRC: Paying Inheritance Tax

 

Published on: August 30, 2012

It is a stressful time when someone passes away and grief is not the only strain relatives face as they struggle to obtain a medical certificate detailing the cause of death, as well as registering the death.

They are then expected to plan the funeral and see it through, before a final decision on the deceased’s possessions, properties and investments is made.

So the question at that point is whether or not a legal professional is required to do probate, which is a term used to describe the management of the deceased person’s affairs.

Find out more on whether you need professional help in our article Can I do probate myself?

Probate is typically conducted by a close relative where a Will is already in place, with the responsible person dubbed the administrator or executor.

Depending on the details of the Will, this could be one or more persons.

The executor is required to apply for a grant of probate from the probate registry.

This is a legal document that simply confirms the executor as the authorised person to deal with the deceased’s assets, which might include property, money and savings.

It is then down to the executor to use the power to access funds, sort out finances and collect or distribute assets to beneficiaries named in the will.

There are times when a grant of probate is not required, such as in cases where the deceased person has less than £5,000 or they jointly owned all of their possessions so that these assets automatically pass to the surviving joint owner.

In an effort to determine whether or not a grant of probate is required, the executor must write to each institution informing them of the death and enclose a photocopy of the death certificate and where there is one, the Will.

It is worth noting at this point that the grant of probate will not be issued until some or all of any inheritance tax due on the deceased’s estate is paid out.

Instances where a grant is almost always necessary include situations where the deceased person owned stocks or shares, property or land held in their name or as “tenants in common”, and certain insurance policies.

Usually, financial institutions will want to see the grant before transferring the control of assets. However, some organisations might decide to release the money in cases where the estate is small.

A challenge arises when there is no Will in place because a responsible person has not been singled out by the deceased, leading someone to apply for the authority of executor.

Typically a close relative will apply to the probate registry for a grant of letters of administration, which will confirm them as the executor or administrator.

This process can take months or even years to finalise in complicated situations so exercise patience in this area.

In much the same way, the grant of letters of administration serves to tell banks, building societies and insurance companies that you are the executor and thus have the right to access the deceased’s assets.

See Lawpack’s DIY Probate Kit, which has been approved by Kings Court Trust Corporation, for a comprehensive guide to the executor’s duties. 

Related articles

• Probate: Where do I start?
• Who can start probate when someone dies?
• Do I need a grant of probate?

 

Published on: May 28, 2012

When someone dies one of the most important tasks of executors (called ‘administrators’, if there isn’t a Will) is to list the assets and debts of the deceased.

It’s vital to get in writing the value of all the assets and debts as at the time of death, as this information must be provided on the probate (or confirmation) forms.

Checklist of debts that will often occur

To help you itemise the debts, here is a checklist of some of the debts the deceased might owe.

• Water rates
• Telecoms bill
• Subscription TV bill
• Electricity bill
• Gas bill
• Loan or overdraft
• Credit card bills
• Mail-order catalogue bill
• Rent arrears
• Hire purchase payments
• Debts owed by the deceased to other individuals
• Council Tax
• Outstanding Income Tax and Capital Gains Tax

Reasonable funeral expenses are also counted as a liability of the estate, including the cost of a gravestone.

If the person arranging the funeral is in receipt of Income Support, Tax Credits or Housing Benefit, they may be able to apply to the Social Fund (a loan-type scheme administered by the Benefits Agency) for a payment to cover reasonable funeral expenses.

However, the cost is repaid out of the estate if money subsequently becomes available.

What next?

Once you have listed the assets and debts of the estate, review them. Find out if you need to apply for a grant of probate or confirmation?

Before applying for a grant of probate or confirmation, any Inheritance Tax due must be paid.

If the estate appears to be insolvent or there are other complexities, do seek professional advice.

Paying debts

If necessary, it’s generally possible to request a delay in the payment of debts until the grant has been obtained and funds are available.

Executors don’t have to pay them out of their own income or savings.

Expert probate advice

For further information and expert guidance on valuing the assets and debts of an estate for probate, read Lawpack’s DIY Probate Kit, or call the Probate Advice Line for free with no obligation.

 

Other information

• Debts aren’t written off when someone dies
• Valuing the assets of an estate
• Do I need a grant of probate?
• Is inheritance tax due on the estate?

There are many things to organise when someone dies and it is easy to forget vital steps or become overwhelmed.

There are various administrative tasks that need to be undertaken and one of the most important ones is to obtain the death certificate.

The death certificate is an essential document as it enables other essential procedures to happen.

When someone passes away, the doctor will issue a medical certificate stating the cause or causes of death, along with a notice setting out who is eligible to register the death with the local Registrar of Births and Deaths.

When to register the death

In England & Wales the death must be registered within five days and within eight days of the death in Scotland.

The medical certificate must be taken to the Registrar of Deaths, or written notice must be sent to the Registrar.

In England and Wales, the deceased’s medical card should be given to the Registrar as well.

 

Who can register the death in England & Wales?

If the person died in a house or hospital (including a hospice), the death can be registered by:

1. A relative who was present at the time of death
2. A relative who had been visiting the person during the deceased’s last illness
3. A relative living in the same local district
4. A person who was present at the time of death
5. Someone in authority in the building where the death occurred who was aware of the circumstances of the death; for example, the owner of a nursing home or the warden of sheltered accommodation
6. Any resident of the building where the death occurred, if they were aware of the circumstances of the death
7. The person who accepts responsibility for arranging the funeral

This person is called the informant.

If the person didn’t die in a house or hospital, the death can be registered by:

1. Any relative able to provide the information required by the Registrar (see below)
2. Any person present at the time of death
3. The person who found the body
4. The person in charge of the body (the police if the body is unidentified)
5. The person responsible for the funeral arrangements

 

Who can register the death in Scotland?

In Scotland, the death must be registered by:

1. Any relative of the deceased
2. Any person present at the death
3. The executor or other legal representative of the deceased
4. The occupier at the time of death of the premises where the death occurred
5. Any other person who knows the particulars to be registered, if there is no person as above

 

What information do you need to give the Registrar about the person who has died?

The Registrar will ask for the following details about the deceased:

• The date and place of death (the birth certificate should be produced, if available).
• The full name of the deceased, including any maiden name.
• The date and place of birth.
• The occupation of the deceased.
• The name, date of birth and occupation of the deceased’s spouse or civil partner (and in Scotland, former spouses), whether or not still living.
• The deceased’s usual address (if the death was away from the normal home, then the normal home address should be given, rather than the address where the death occurred).
• Whether the deceased received any state pension or allowance.
• The date of birth of any surviving spouse.
• In Scotland, the full names and occupations of the parents of the deceased should also be provided (if known).

 

What to do once the death has been registered

Once you have registered the death, you will be given a death certificate, which is a copy of the register entry.

In Scotland, you will also be given a certificate for the funeral director dealing with the funeral, a free abbreviated death certificate, and a Social Security notification of death form to assist in obtaining or adjusting benefits.

There is a small charge for each copy of the full death certificate, and it’s sensible to get three or four copies.

The executors may need to send copies to the deceased’s bank, to the registrars of companies in which the deceased held shares, to insurance companies holding policies written in trust and, in England & Wales, to the Probate Registry.

Although you can have the death certificate returned to you once it has been inspected, it may be more convenient to circulate several copies at once.

Remember that a while after the death, the cost of a copy of the death certificate can increase. The period varies depending on the register office, so it’s worth checking if it’s likely that you will need further copies.

 

Other information

• Probate: Where do I start?
• Executors: what to do when someone dies
• Who can be the executor when someone dies?
• What are an executor’s duties?

 

External links

• Directgov: Search for your local register office
• Identity & Passport Service: Certificate ordering service

 

Published on: May 22, 2012