When a person dies, someone has to deal with their affairs. This is called ‘administering the estate’.
If the person who has died leaves a will, it will usually name one or more people to act as the executors of the will – that is, to administer their estate.
If you are named as an executor of a will you may need to apply for a grant of probate.
A grant of probate is an official document which the executors may need to administer the estate. It is issued by a section of the court known as the Probate Registry.
If there is no will
If there is no will (known as dying ‘intestate’) the process is more complicated. The Administration of Estates Act 1925 sets out who can act as administrator – that is, who has the legal right to deal with the affairs of the person who has died. The administrator will usually be a close relative of the person who has died, if there is one. There may be more than one person who has an equal right to do this.
Anyone who has this right can apply to the probate registry for a grant of letters of administration. This is an official document, issued by the court, which allows administrators to administer the estate.
In some cases, for example, when the person who benefits is a child, the law says that more than one person must act as administrator.
When a grant of representation is needed
A grant of representation is not always needed, for example if the person who died:
In other cases, some financial organisations, such as banks, may agree to pay funds to a personal representative without a grant of representation if the estate is very small – it is always worth asking.
Usually, a grant of representation will be needed when the person who has died left:
Responsibilities of personal representatives
The PRs have a heavy responsibility. They must:
PRs have a legal duty to carry out these tasks with due diligence and we are here to guide you as to how the estate is to be administered correctly.
The PRs are also responsible for finding out if inheritance tax is due as a result of a person’s death. If it is, the personal representative has to make sure that it is paid to H M Revenue and Customs (the Capital Taxes Office).
Whether inheritance tax needs to be paid can depend on:
Inheritance tax is payable when the grant of probate is applied for, but since all the assets are frozen as at the date of death, funds from the estate cannot always be used for this purpose. Some banks and building societies will release funds solely to pay inheritance tax, but if this is not possible, or the available cash is insufficient, then it may be necessary for the PRs to arrange a short-term loan from the deceased’s bank to cover the inheritance tax.
What happens next?
Once the grant of probate has been obtained, the executors or administrators are able to deal with:
For example, this might involve the following:
There are also a good many other matters connected with daily life:
The collection of some assets is more difficult than others. Advice may well be needed when dealing with shares in a private company, a family business or assets situated abroad.
Payment of debts
The PRs must pay all debts owed by the deceased before distributing the estate to the beneficiaries. The PRs may be personally liable for any debts if they distributed the estate without first making sure that the creditors have been paid. It is sensible to use the statutory notice procedure to advertise for creditors and we can advise you about this.
If the deceased person’s assets are insufficient to cover the debts, the estate is “insolvent” and special rules apply – again we can advise you further.
H M Revenue and Customs will examine the inheritance tax return that was filed by the PRs and agree the extent of any liability for inheritance tax. This may take many months if H M Revenue and Customs wish to negotiate with us over values. However, we will always do our best to keep things moving forward as quickly as possible. A clearance certificate is issued by H M Revenue and Customs once the inheritance tax liability is agreed and paid.
Any income earned by the assets of the estate during the administration period will need to be declared for income tax purposes. If any assets are sold, there may be capital gains tax to pay.
When all of the assets have been realised and the debts, administration expenses and tax have been paid, the remainder of the estate can be transferred to the beneficiaries. The PRs should produce estate accounts to the beneficiaries showing receipts, payments and the division of the estate. The PRs should also prepare certificates for the beneficiaries showing the income received during the administration period and the income tax deducted from it. If the beneficiary is a non-taxpayer this enables him to recover the whole or part of the tax paid by the PRs. If the beneficiary is a higher rate tax payer he will need to pay additional tax via his own tax return.
If you would like to recieve articles and news stories from our private client team please subscribe using the form below..
Many of the firm's partners and solicitors are rated as experts in their particular area of law. Please click on their picture to display their full profile.
Please click on any of the links below to see our client’s testimonials.
"Breda Cashell did a first class job in handling our late mothers estate, keeping us well informed throughout this sad time of ours. Nothing was too much trouble, she was very professional from the outset to completion. She answered all our questions at our first meeting, and subsequent meetings. Breda is a very caring lady, and our family would recommend her and your services as an excellent company to work with. Thanks for a brilliant service."
"We have been clients of Wake Smith over a period of some twenty-five years and the service we have received throughout this time has been excellent. The firm has always been prompt, efficient and thorough and we have always been treated with the utmost courtesy and kindness."
David and Elizabeth Marsden
"I am thankful for Suzanne’s kindness, care and consideration. I am sure the family would join me in their appreciation of all her hard work. Suzanne makes you feel that no question is too small for her to answer and when she does reply it is in a language that I understand and is perfectly clear."
"We really appreciate the sensitive way that Louise dealt with us in such a difficult time".
Mr & Mrs M from Sheffield
"Couldn’t be better! Shaun was most helpful and reassuring".
Mr F from Sheffield
These articles provide useful and updated information on different sectors of the legal industry.
Sign up for our free monthly e-newsletter. Please register your details below to receive the latest legal news and developments.
We will not share your details with any third party organisations.
Get expert legal advice from one of Sheffield’s most respected law firms, Wake Smith Solicitors.
Our team of friendly, professional solicitors can provide support and advice in a wide range of areas for you and your business. Call our Solicitors in Sheffield on 0114 266 6660 or fill out the simple form below and we will get back to you as soon as possible.
For all media enquiries, please contact Abby Worsnip or Billy Greenhalgh at www.agentpr.co.uk
Please enter your first name.
Please enter your surname.
Please enter your address.
Please enter your contact telephone number.
Please enter your e-mail address.
Please enter a valid e-mail address.
Please enter what method you wish to be contacted via.
Please select what practice area you are interested in.
Please enter your enquiry.
Please check the box to confirm you are not a robot.
The form has been successfully submited. Thank you for your enquiry.
Monday to Friday
8:30 a.m. – 5:30 p.m.
DX: 10534 Sheffield 1
There is a large public carpark operated by Q-Park underneath our office building, the entrance to which is located on Solly St.
If you have any special requirements relating to accessibility or disabled facilities please contact John Liversidge on 0114 224 2075 or at firstname.lastname@example.org