What to do when someone dies
Losing someone is impossibly difficult. The last thing you need is to get caught up in the legal terminology, procedural difficulty, or potential pitfalls involved in the administration of an estate.
By reading the guide below, you will equip yourself with the information you need to follow the correct process after someone passes.
Losing a relative or a friend is a difficult time. Most people have never dealt with the administration of someone’s estate, and this can turn out to be a complex process as it can be fraught with legal terminology, procedural difficulty and potential pitfalls for the unwary. This guide is intended to help with the basics of what to do when someone dies.
First Steps (timescale 1 – 2 weeks)
To begin with, the death has to be registered and funeral arrangements should be made. The GP may decide to report the death to a coroner if there is cause to do so for instance if the cause of death is unknown or they haven’t been to the doctor recently.
If the coroner decides that the cause of death is clear the GP signs a medical certificate and the coroner issues a certificate to the registrar stating a post-mortem isn’t required.
If the coroner decides a post-mortem is needed to find out how the person died, they will only release the body for a funeral once they have completed the post-mortem examinations.
The coroner may decide to hold an inquest if the cause of death is still unknown. You cannot register the death until after the inquest but in these circumstances an interim death certificate will be supplied by the coroner which will allow you to continue to administer the deceased’s estate.
To register the death, please follow this link. You should opt for the “Tell us Once” service which means that government departments (such as the Department for Works and Pensions) are automatically notified of the person’s death.
If the deceased made a Will, you should locate this as soon as possible to see whether they made any funeral wishes and to establish who is responsible for administering the estate. You should contact the deceased’s solicitor or bank and request a search to be made to see if the deceased made another Will or codicil. We advise you to complete a Certainty Will Search.
Stage One: Ascertaining the estate
All of the deceased’s paperwork needs to be gathered together; this includes their last tax return, if applicable. This will allow you to understand the assets and liabilities within the estate. You will need to notify each organisation in order to obtain the date of death balance.
If the deceased owned property, you need to check that it is insured and secure. The insurance provider should be notified of the policy holder’s death as soon as possible.
It is also important to ascertain if any gifts have been made within the last 7 years, whether the deceased was a beneficiary of any trusts, whether they have been paying for insurance for another person’s benefit and whether they have a pension or death in service benefit, as all of these may be subject to inheritance tax.
Stage Two: Applying for the Grant
Once you have obtained all of the date of death balances, you may need to complete the necessary HM Revenue and Customs application and apply for the grant.
There are different types of grants, but the most common are:
Grant of Probate
If there is a Will, the executor/s will need to apply for a ‘Grant of Probate’ to deal with the estate assets.
Grant of Letters of Administration
If there is no Will, one or more of the people entitled to inherit the estate will need to apply for a ‘Grant of Letters of Administration’ to deal with the deceased’s estate.
Inheritance tax
Inheritance tax is charged on the deceased’s worldwide assets, if they are UK domiciled.
Stage Three: Collecting in the assets and settling the debts
Once the grant has been obtained the deceased’s assets need to be collected in, settle any liabilities and distribute the estate to the beneficiaries as per the deceased’s wishes in their Will or under the Statutory Intestacy Rules (the rules that apply when someone dies without a Will).
An important part of the estate administration process is ensuring that all of the deceased’s debts are settled. You wish to consider advertising in accordance with the Trustee Act 1925 to protect against unknown claims. Should an executor or administrator decide against placing these notices and any debts come to light at a later date after distribution of the deceased’s estate, they will be personally liable to settle these debts.
Finalising the estate and distributing to the beneficiaries
The deceased’s income tax affairs need to be settled and a final tax return will need to be submitted to HM Revenue and Customs.
Once the liabilities have been settled and all tax has been settled, the estate can be distributed.
However, if there is any indication of a claim being brought against the estate by any party then the estate should not be distributed until 10 months have passed since the date of the grant.
If the deceased left gifts of money or specific items in the Will, these should be distributed first. The remainder of the estate (known as the residuary estate) can then be distributed to the residuary beneficiaries.
The residuary beneficiaries should be provided with a statement of account (known as an estate account) and a copy of the deceased’s Will, if the deceased left one.
Timescales
It is very difficult to predict the exact period in each situation as some estates can be complex, particularly if they involve business assets or foreign elements. There are also third parties to be dealt with such as banks, accountants and lawyers abroad which can also delay an estate administration.
What to do if there is no Will – Intestacy
When a person who did not have a Will dies, legally their estate must be shared out according to what’s known as ‘Intestacy Rules’. The steps needed to deal with an intestate estate are largely similar to that of an estate with a will.
The main difference is who is entitled to act in the administration and that the Grant of Probate is referred to as a Grant of Letters of Administration. There are also some limitations on taking possession of assets where there is no will and executor appointed.
Inheritance Tax
One of the most important tasks in sorting out an estate is dealing with any inheritance tax that is due. This can be a complex process and involves valuing the estate and a lot of paperwork, all of which must be completed within strict timescales.
Our expert team of lawyers can help ease the burden at such a difficult time and ensure the most tax-efficient outcome for you and your family.
A beneficiary of an estate, whether by Will or the laws of intestacy, is perfectly within their rights to reject their inheritance.
Beneficiaries may wish to vary dispositions of property following death in order to redirect benefits to other family members who are more in need or less well provided for, as well as to save tax.In order to do this there are three options:
By Gift
A gift by a beneficiary has taxed consequences if the item has increased in value since the date of death and if the beneficiary dies within seven years of making the gift.
By Disclaimer
A disclaimer is a simple deed in which the beneficiary gives up all rights to their inheritance. The inheritance then passes to the next person entitled under the will or on intestacy. With a disclaimer the original beneficiary has no control over who receives the asset.
By Variation
A Variation is often preferred to a disclaimer because it allows the original beneficiary to choose who inherits.
The best solution, however, is not always the most obvious, and depends on the individual circumstances of those involved.
Our expert lawyers can review the options and provide advice as to the most efficient route available to you.
It is becoming increasingly common for our clients to live and work across multiple jurisdictions which results in acquiring property overseas and a partner with another nationality.
Our highly experienced team regularly deals with estates involving an international element.
We analyse:
- Which succession rules will apply to the property involved.
- The effect of any will or wills might be.
- The interaction of inheritance or succession tax in the countries applicable.
- The deceased’s domicile status.
We can also assist with resealing foreign grants and sorting out the tax affairs for a non-domiciled individual in relation to the UK element of their estate.
In certain circumstances, it might be appropriate for an independent administrator to be appointed to deal with the administration of the estate of a deceased person.
An independent administrator might be appointed in the following circumstances:
When there is a Will
- When the executor named in a Will is unwilling or unable to act, or unsuitable;
- When the executor named in a Will has pre-deceased the testator;
- If there is a dispute between the named executors in a Will, which is causing delays to the administration;
- If the beneficiaries in a Will are not happy with some or all of the executors.
When there is not a Will (intestacy)
- When the deceased did not leave a Will, there might be a number of beneficiaries who might be entitled to apply for the grant of letters of administration. Therefore, it might be difficult to determine which beneficiary should apply for the grant and an independent administrator will be needed.
Why is an independent administrator required?
If the administration of an estate is delayed or impacted, for example, by inactivity or disagreements between the executors or between the executors and the beneficiaries, then in order to avoid loss to the estate, an independent administrator can be appointed.
The independent administrator will ensure the impartial administration of the estate by invoking their professionalism and specialist knowledge and experience when dealing with the administration process.
Who can be appointed as an independent administrator?
An independent administrator can be anyone who is trained and qualified to administer estates, usually an experienced probate practitioner. The independent administrator will also possess memberships with organisations such as the Society of Trust and Estate Practitioners (STEP) and The Association of Lifetime Lawyers. They should have qualifications such as TEP and ACTAPS and will have their details on the Law Society’s legal professional page.
Further, it is important the independent administrator does not benefit from the deceased’s estate and is not affected by any issues arising out of the estate.
Bolt Burdon are appointed to act as independent administrators.
How is an independent administrator appointed?
If an independent administrator needs to be appointed to administer an estate, an application to the Court will need to be made.
Before making an application to the Court, however, all the parties will need to agree in writing to the appointment of an independent administrator.
Commonly, such applications are made before a grant has been issued. Further, an executor may refuse to renounce their executorship office and an application to remove the executor might be required, or a person entitled to take out the grant might need to be passed over and an application to the Court is required.
An independent administrator can also be appointed after the grant has been issued where the appointed executor or administrator fails to deal with the administration of the estate properly or has become unsuitable to act in this role any longer. Therefore, the failing executor or administrator will need to renounce their role or be removed by a Court order.
