This is the second post in a three-part series about handling the paperwork after a loved one died, and entrusted the sad task to you. You may have never actually spoken about it. However as their partner you have decided it is your sad duty to follow through.
We discussed the admin side in Part 1, where we worked through telling an authority they passed away, registering the death, telling all concerned, and arranging the funeral. Now it’s time to move on to making the wishes come true they described in their will.
Step 1: Find Their Will, List Their Assets and Liabilities
Your first task is to find the will, read it through and understand the content. The document will explain what they want done with their property and other possessions as the case may be.
A will usually nominates a person to execute those wishes, hence their executor. We wrote this article assuming you are that person. However, if the deceased nominated someone else, than most of what follows becomes their task.
Obtain access to all their possessions and papers, secure them, and write them up on a list. This should produce a database of assets, liabilities and any moneys owed. Inform the relevant creditors and debtors. Ask them how they suggest finalising these matters.
Step 2: Administer the Estate
Open a bank account on behalf of the estate. Deposit any cash in hand and receipts as they start trickling in. Once you have a grant of representation (see the paragraph following) you can write cheques to pay expenses directly related to the estate.
Establish the value of the estate by assessing every asset and liability separately. You may benefit from a professional evaluator at this point. You can bill the estate for their fees. Obtain and complete the necessary forms for inheritance tax and forward them to HM Revenue and Customs.
HM Revenue and Customs will decide whether the estate owes any inheritance depending on the value you placed on it. You cannot move forward with distributing the assets until this is paid. Consider appointing a professional tax adviser at this point. You can bill the estate for their fees.
Step 3: Obtain Permission to Distribute the Estate
The UK government manages the distribution of estates through its probate system. There’s a minimum value threshold below which this does not apply. That value was set at £5,000 at the time of writing although change was in the offing.
Some estates are automatically excluded from these controls, if:
- The deceased had jointly owned land, property, shares or money (these will automatically pass to the surviving owners)
- The deceased person only had savings or premium bonds (because their values are beyond dispute)
If the estate with which you are dealing is not exempt, but has a will, then you apply for a grant or probate. However, if there is no will, you should apply for letters of administration to distribute the estate according to the laws of succession.
The Final Stages of Administering the Estate
Our third and final post in this short series addresses how to go about finalising the estate of your loved one. Come back soon for the final instalment. Although you have lots to think about right now.
