DIY Probate Guide
Being named Executor by someone can be a daunting task, especially if you weren’t aware of it or if you were close to the deceased and are personally dealing with their loss or supporting others in the grieving process. Many people enlist the help of a probate solicitor, especially if the deceased’s estate is large or if the Will isn’t straightforward. With the wealth of information and advice available online however, more and more people are taking a DIY approach, seeking professional help only for the parts they can’t manage themselves. We’ve compiled a step-by-step guide to the process so you can consider all your options before you decide how you want to proceed.
The process of registering the death is quite informal and involves a face-to-face interview with the Registrar. To locate your nearest Registrar click here.
Tell Us Once
Is a Government service offered online which you can visit by clicking here. Once you have filled in the details it will notify Government organisations that someone has passed away, including:
– HM Revenue and Customs (HMRC). You will need to contact HMRC separately for business taxes, like VAT.
– Department for Work and Pensions (DWP)
– Passport Office
– Driver and Vehicle Licensing Agency (DVLA)
– The local council
– Public sector or armed forces pension schemes
The Death Notification Service
The Death Notification Service, found here, makes the job of reporting a death to financial institutions much easier. If you are an Executor or Administrator, you will receive information about what to do next once you have completed the notification.
Arranging and organising the funeral
Once the death has been registered, you can start to make the arrangements for the funeral. You will need to check if there is a funeral plan in place as a Funeral Director may be specified, if not then you will need to locate one yourself. The Funeral Director will guide you through the whole process and can make all of the practical arrangements on your behalf. You may choose to hand everything over to them or to retain some involvement.
Securing the Property
If the deceased’s property is now vacant it is important to ensure the property is secured. Make sure all of the windows are closed, the boiler is drained downed, electricals have been unplugged and all taps are turned off tightly. If cold weather is forecast wen arrange a system drain-down to prevent burst pipes. If you need to find out who the current energy supplier to the property is, the National Energy Association (NEA) have some helpful advice here. It is also important to ensure that the property is adequately insured – any policies held by the owner will have ceased to be valid when they passed away. We can arrange free buildings insurance for you – just call 0808 164 6390.
Looking after any children, elderly relatives and pets
If the deceased had been caring for a vulnerable person you may need to contact your local Social Services. Any pets that cannot be looked after by family or friends, become the Executors’ responsibility. To ensure these animals are cared for you may need to contact a shelter: RSPCA, Dogs Trust, Cats Protection.
Stop unwanted mail
It will take a while for post to stop being delivered while organisations are being notified. Regular visits to the property will stop tell-tale build up inside front doors. To arrange for Royal Mail to redirect it to your address, click here.
Helping you to deal with your grief
You may be struggling with many overwhelming thoughts and feelings at the moment. It’s important to deal with those feelings so that you can cope with everything required of you as an Executor. There are many support groups around; your GP will be able to offer help and advice too. But make sure you take care of yourself at this difficult time.
If you are aware that the deceased has left a Will, it is important to locate the most recently dated, valid document. If you think it’s in the house, we can arrange for someone to find it for you. If you are unsure of where the Will is held, we strongly recommend that you carry out a search with Will Registration companies to see if they have any details of a later Will. We recommend using both Certainty – The National Will Register and Will Register UK. They will search their own databases, as well as making local and national searches with Solicitors and Will Writers.
No Will: The rules of intestacy
If someone dies without leaving a Will at all, or where the Will is invalid/cancelled, they are said to have died “intestate”. The rules of intestacy are followed to establish who can inherit from the estate, click here.
Opening an Executor Bank Account
When dealing with the estate it is your responsibility to collect in all of the Assets and keep an accurate record of ALL monies paid in and out. We recommend you open an Executor Bank Account as soon as possible regardless of the size of the estate. It can be with any bank – it doesn’t have to be the same as the deceased’s.
It is important to keep accurate accounts of all monies coming in and leaving the estate at this stage and going forward. This information will be needed to produce the Estate Accounts, a copy of which will need to be sent to all beneficiaries for them to agree, before the estate can be distributed. Opening an Executor Bank Account will help with this, as an electronic record will be kept of the income and outgoings and enables you to evidence all of the activity correctly if required. For more information see Step 9.
The Grant of Representation is a court order and the official authority to deal with the estate of the person who has died. The grant is issued by the Probate Registry which is part of the High Court. There are different types of grants, the most common are:
– Grant of Probate – This is the court order issued to the Executor(s) under a Will.
– Grant of Letters of Administration – This is the court order issued to the administrators where the person died without a valid Will.
– Grant of Letters of Administration with Will annexed – This is the court order issued to the Administrator(s) where there is a valid Will, but there are no Executors appointed, or they are unable or unwilling to act.
You may hear this being referred to as “Probate”.
Following the death, many of the Assets will be frozen and the asset holders will only release the Assets to you once they are happy you have the authority to act. The Grant of Representation evidences this authority.
Do I need the Grant of Representation?
Normally, you need a grant of representation or confirmation if the value of the deceased’s savings (including shares) is over £5,000 (after paying the funeral account). But, even if you don’t need a grant of probate, it may be better for you to obtain one in any event where the assets (property and possessions) are high in value, to protect you and to ensure that you are distributing the estate correctly. You’ll find the forms you need to apply here. It can take some time (up to 7 weeks) for Grants to be issued so it needs to be done as soon as possible.
Register the Grant or Statutory Declarations with the Asset Holders
Once you have obtained the Grant of Representation it needs to be sent to all of the required companies to enable them to release the monies. This can either be the original or one of the sealed office copies.
To value the estate correctly you are required to ascertain what Assets the deceased owned. You will need to make contact with each company, bank, building society and financial institution to gain date of death balances. Any property will need an HMRC Compliant Valuation before it is placed on the market. Executor Solutions can produce a suitable report and, if you want us to, can then sell the property for you, dealing with buyers and their solicitors and taking care of the whole process right through to completion. Call 0808 164 6390 to speak to one of our team.
As with the Assets, any Debts the deceased had, need to be identified. Debts include credit cards, loans, mortgages, etc. All creditors will need to be informed and accurate date of death balances obtained.
An Asset can be separated by its owner for a number of reasons, for example a change of an address. It is your responsibility to search for any dormant accounts to ensure they are settled. For further advice and to search for dormant accounts click here.
Gifts made by the person who has died
It is important that an accurate record is kept relating to gifts made within the seven years prior to their date of death since they will need to be disclosed to the HMRC and, depending on the value and types of gifts, may affect the Inheritance Tax position of the estate. This could include them giving the house to a family member whilst they still lived there.
Is the estate taxable?
Do the assets of the deceased, including property and cash assets, total more than £325,000?
If yes, was the deceased widowed? Has the deceased recently given any taxable gifts? These are some of the questions which affect if the Nil Rate Band applies and how much Inheritance Tax (IHT) is payable. Other taxes will need to be considered as well, such as Capital Gains and Income Tax, all of which are the responsibility of the Executors/Administrators. You will need to complete Inheritance Tax forms and pay any Inheritance Tax due.
Return the Driving Licence (both the photo card and paper, where applicable) to DVLA, Swansea, SA99 1AB
Return the Passport to the Passport Office enclosing this form to Customer Contact Centre, Her Majesty’s Passport Office, PO Box 767, Southport, PR8 9PW.
Return any library membership cards to the local library
Return any bus passes, disabled badges or parking permits
Cancel any club memberships
Part of your role as an Executor/Administrator is to ensure that all of the beneficiaries named in the Will are located. It is usual to send a letter and a copy of the Will to all of the beneficiaries to let them know what their entitlement is. It is also advisable to ask for identification, such as photo ID and a copy of a recent utility bill if you don’t know them personally.
If a beneficiary has died, then you need to look to the Will for any provision. If the beneficiary was a child, grandchild, or a more distant descendant of the deceased, then the law states that their share automatically passes to their descendant; unless there is any wording within a Will to stop this from happening, for example “but if he dies before me his share will pass to my sister”.
If the beneficiary died within 28 days (or a different period if specified in the Will) of the deceased, then it could well be considered that they died first for distribution purposes. If they died after the 28 days, then the beneficiary would still be entitled to their share or gift and it will now form part of their own estate.
It is strongly advised you advertise for any unknown beneficiaries (or creditors) to come forward. This offers protection and reduces your liability in the event of an unknown creditor comes forward at a later date; after all of the money has been paid out. If you do not place the advertisement and money has been paid out the estate, then you may be expected to settle with the creditor from your own funds. The advertisement expires after 2 months and 1 day, after which time it is safe to distribute the estate, although it is advisable to wait 6 months from the date of death in the event of any claims being brought against the estate.
To place a notice click here.
Evidence is required to prove that every attempt has been made to locate any missing beneficiaries.
Beneficiary under 18 years old
If there are beneficiaries who are under the age of 18 years old, or under the vesting age stated in the Will, then their share of the inheritance will need to be held in trust for them until they reach a specific age; usually 18, 21 or 25 years old. You will need to ensure suitable Trustees (this could be yourself) are instructed to look after the inheritance until that time.
If a beneficiary is bankrupt, then their share will need to be dealt with in a different way and would be due to be paid towards the debt. It is advisable to get professional advice regarding this.
In some cases, there may be vulnerable beneficiaries who are unable to deal with substantial amounts of money they are due to inherit. It is your responsibility to ensure that the inheritance is managed and looked after correctly for the beneficiary.
Once the Grant of Representation has been received, you will be able to legally complete the sale of Assets, such as property or investments.
As you start to receive monies from the asset holders, you will need to ensure that the money is paid into the Executor account, keeping a separate note of the income and capital. Setting up a Cash account will help you with this.
Paying the Debts
Although there is no legal time limit for the payments to be made, it is advisable to wait until the expiry date of the statutory notices (which is 2 months and 1 day from the date of the notice, this is the time given for any unknown creditors or beneficiaries to come forward) before settling the Debts. Debts are a priority and should be paid before any of the beneficiaries receive their entitlement.
Paying the Expenses
As well as existing Debts, there will also be certain Expenses that need to be paid, this will include any that have paid on behalf of the estate.
Before the beneficiaries can be paid, you need to confirm the following:
– You have identified all of the beneficiaries
– You have checked to see if the Will/Intestacy needs to be varied
– You have paid all of the creditors and Expenses
– You have identified and understand the gifts described
– There is enough money to pay all of the beneficiaries their full share
– You have waited 6 months from the date of death before distributing the Assets
If there is not enough money in the estate to pay all of the beneficiaries then they will need to be paid in a specific order. If you find yourself in this position, you may prefer professional help to ensure that the Assets are distributed correctly, in the correct proportions.
Making an interim distribution to the residuary beneficiaries
Executors must be satisfied that all debts, taxes and liabilities have been, or can be, settled before making any distributions. They can consider making small interim payments to the beneficiaries if they are confident there is enough funds to settle all debts due when trying up the Estate.
Paying the beneficiaries
Once the bequests have been given and any cash legacies paid, the remaining Assets can be distributed.
It is important to note that you are responsible for ensuring the tax position of the person who has died is finalised. You will need to cover the tax position up until the date of death as well as the administration period.
Capital Gains Tax
As is the case with Income Tax, when dealing with an estate, Capital Gains Tax is broken down into two parts. The first part will cover capital gains and losses up until the date of death and the second part will cover the administration period.
If any of the Assets have significantly changed in value, which will affect the Inheritance Tax position, you need to let the HMRC know immediately.
Estate Accounts is a detailed report of the financial information about the estate that you have collected throughout the administration.
You will need to account for every penny and so it is important that the information is correct. Estate accounts give a complete picture of how an estate is made up and how it has been dealt with. As such it provides an invaluable source of reference and will help deal with any queries that can arise after the administration has been completed. Templates are easily available online to help you; you’ll find examples by image searching “Estate Accounts Template”. Accounts should include:
– Summary of the estate
– Detailing of the Assets and Debts
– Listing the Administration Expenses and specific gifts
– Identifying income and capital payments
– Calculating the final distribution
Do I really need Estate Accounts?
In short, Yes…
Personal representatives have statutory duties set out in section 25 of the Administration of Estates Act 1925 to:
– “Collect and get in the real and personal estate of the deceased and administer it according to law;”
– “When required to do so by the court exhibit on oath in the Court a full inventory of the estate and when so required render an account of the administration of the estate to the Court;”
You have sworn to deliver accounts to the Court, if and when these may be required.
As the administration comes to an end, it is worth running through the list below to check that everything has been completed:
– Did you notify all of the utilities when the house was sold/transferred and all the balances paid or refunded?
– Have you paid all of the Debts and Expenses?
– Have you recognised and collected in all of the Assets?
– Are all of the Assets now sold or transferred to the beneficiaries?
– Have you got clearance from HMRC for Income Tax, Capital Gains Tax (where applicable and Inheritance Tax?
– Are you happy you have identified all of the beneficiaries, you have their ID and you have carried out Bankruptcy searches?
– Have all of the beneficiaries and personal representatives approved the accounts?
– Have you waited 6 months from the date of death before distributing the estate?
Income Tax Certificates
You will have realised that the money the beneficiaries have received will be made up of capital, cash, actual assets etc. and some of it will be income, bank account interest, share dividends etc. It is important to let the beneficiaries know the details of the income so that they can disclose this in their own Tax Return. You do this by issuing a R185, Certificate of deduction of income tax form, to each of the residuary beneficiaries. You can find a copy of this form here.
Helping the beneficiaries
The beneficiaries will have inherited, what might be a life changing amount of money, and as such they may require advice on how to invest their Inheritance. Many asset management companies or Independent Financial Advisers can help with this and you may find that the beneficiary already has someone in mind.
Final Administration Tasks
To finish the administration there are a couple of small tasks that need to be completed, detailed below:
– Make sure you have all of the receipts from the beneficiaries.
– Close the Executor bank account – make sure there are no funds remaining before closing this.
– Tidy up your files and make sure all of your worksheets are complete and up-to-date. You need to keep all of the information for 12 years and you may find that you need to refer back to this from time to time.
Now you have an understanding of what is involved in administering an estate you may wish to look through your options again. There are tool kits available to help or you instruct a probate solicitor to take care of it.