A Guide to Estate Administration After A Death

What is Estate Administration?

Estate Administration is dealing with the estate of someone who's died. This is usually handled by the executor appointed in the will or an appointed professional who they have asked to take on this role on their behalf. If there is no will, the estate is dealt with by an appointed administrator, usually a close relative of the person who has died, which relative this is, is decided by the rules of intestacy. In this article, we’ve set out some key steps for estate administration.

Please note, this is just a high level guide and various other steps are required depending on the make-up of the estate and circumstances, as well other activities (such as asset searches and insurance) that can be considered.

Step 1: Make a list of all the assets and liabilities of the estate, and their values

The first step is to identify what’s in their estate, and how much it’s worth overall. To do this, you need to make a list of the different assets within their estate and their values, as well as any liabilities or debts, and their values.

The person who has died might have listed out details of their estate and their assets in the appendix of their will or left a folder containing all the information you would need.

If this isn’t the case, and you’re unsure about where to start figuring out what is in their estate and what they could owe, think about their:

• bank accounts;
• investments/shares;
• property/properties;
• bills/credit cards/loans;
• valuable personal items;
• life insurance, if they had it;
• pension(s); and
• any other places you think they might have assets and/or debts.

As part of this process, you will have to reach out to banks and other companies to learn the values of these assets and/or debts.

See our article for more help with this process: https://octopuslegacy.com/advice/key-steps-before-applying-for-probate

Step 2: Understand whether you will need probate and whether there will be Inheritance Tax to pay

Probate is the legal process of dealing with someone’s property, money and possessions after they die. Not all estates require probate – it’s only required in about 50% of cases in England & Wales.

Whether it’s required depends on:

• the size of the estate
• the kind of assets held by the person who’s died
• requirements of financial organisations where the person who died had assets
• how assets are held by the person who’s died

Learn more about probate, if you need it and how to prepare for it, with our expert guide: https://octopuslegacy.com/advice/probate-guide

After the death of a loved one, you'll also have to work out if Inheritance Tax needs to be paid and/or if a full Inheritance Tax account is needed (HMRC form IHT400), even if inheritance tax doesn’t need to be paid. According to Money Saving Expert, only around 4% of families have to pay Inheritance Tax, as most estates fall below the Inheritance Tax threshold.

See our helpful guide for more information on Inheritance Tax: https://octopuslegacy.com/advice/inheritance-tax

Step 3: If required, apply for probate.

Once you've calculated the value of the estate and whether any Inheritance Tax needs to be paid (and you’ve paid it, if it is required), you can apply for probate.

It currently takes around 16 weeks once you've applied for probate to receive the Grant of Representation.

Step 4: Consider placing a Section 27 notice

A Section 27 Notice is a statutory advert asking anyone who believes they are owed money by the person who has died to come forward and make a claim within 2 months and 1 day from the date that the statutory advert is published.

Although not a legal requirement, this is highly recommended, as it protects the people responsible for sorting out the estate from personal liability for any unknown debts. It’s also recommended to place a notice in the local paper where the person who died resided. Placing these notices as early as possible avoids delays in distributing legacies once the grant is available.

To place a Section 27 Notice, visit this website: https://www.thegazette.co.uk/wills-and-probate/place-a-deceased-estates-notice

Step 5. Administer the estate

With any prior necessary processes completed, the estate can be administered and distributed. This involves:

• Gathering the assets from their estate,
  • Collect any money from their bank accounts, or their investments, where appropriate. If you are doing this yourself you should make sure to have a separate bank account for this to keep the estate money separate from your own.
  • Sell or transfer any property and/or other assets, if appropriate.
• Pay any debts and liabilities, including settling all taxes such as income tax, capital gains tax and/or inheritance tax, if required.
• Make payments to beneficiaries in the way that the will specified or according to the rules of intestacy, if there is no will

It's important to keep detailed and clear records to show what’s done during the estate administration, especially regarding the money coming in and out of the estate (in the form of estate accounts).

For a step-by-step summary of different estate administration scenarios, see below.

What does an executor do after probate is granted?

• Place a Section 27 Notice (optional)
• Collect the assets from their estate by either selling, cashing in or transferring them.
• Pay the debts and liabilities of the estate including all taxes (if any are due)
• Distribute the estate to the beneficiaries according to the wishes laid out in their will or intestacy rules, if there is no will

What does an executor of a will do to administer the estate, if probate isn’t necessary?

Once you’ve built a complete picture of their estate, the next steps are to:

• Place a Section 27 Notice (optional)
• Collect the assets from their estate by either selling, cashing in or transferring them.
• Pay the debts and liabilities of the estate including all taxes (if any are due)
• Distribute the estate to the beneficiaries according to the wishes laid out in their will

What does an appointed administrator do to sort the estate if there is no will?

If there is no will, you first need to work out who inherits under the rules of intestacy, and build a full picture of their estate. You’ll need to apply for Probate (Letters of Administration) when there is no will, to have the legal authority to administer the estate.

Then, the next steps are to:

• Place a Section 27 Notice (optional).
• Collect the assets from their estate by either selling, cashing in or transferring them.
• Pay the debts and liabilities of the estate including all taxes (if any are due).
• Distribute the estate to the beneficiaries according to intestacy rules.

Want to understand your options?

Worried about making mistakes in the estate administration process? Short on time? Uncomfortable with the legal jargon and processes that go alongside it? We can help.

Octopus Legacy is able to help with both applying for probate and administering the estate, through either our subsidiary Octopus Legal Services or partner firms.

Why not book in a free initial consultation call to work out whether you need probate, answer any questions you might have about the process, and learn more about your options to get support via our services.

• Visit our website: https://octopuslegacy.com/probate
• Book in a meeting: https://will.octopuslegacy.com/probate-call
• Or give us a call on: 020 8068 9990

Our Grant of Probate services include:

• Working out the inheritance tax position - do you have to pay it or not, and options on how to pay it. Working out if you need an inheritance tax account (and completing and submitting the tax forms)
• Completing the Grant of Probate application and applying for it
• Delivering the Grant of Probate to you (by post) so you can complete the rest of the estate administration

Our Full Estate Administration services include:

• Assessing and valuing the estate
• All the administration around applying for and delivering Grant of Probate
• Working out what inheritance tax you need to pay, submitting tax forms and assisting with arranging payment (if needed)
• Collecting in the assets and settling liabilities
• Giving assets to the right people (the beneficiaries) at the right times
• Providing a set of final estate accounts