When someone dies, there are certain steps which must be taken to deal with their money, investment and property they owned at the time of their death, more commonly called their estate.
At Sydney Mitchell, we have a dedicated team of experts, including specialists dealing with high net worth and complex estates, such as those involving business or agricultural properties.
How you deal with the administration of an estate after a person’s death depends on various factors, such as whether the deceased left a valid will, whether a grant of representation (a grant) is needed, and whether the estate will be subject to inheritance tax (IHT).
Where there is a valid will
If the deceased left a valid will, it usually names executors. These are the individuals who have the authority to deal with the estate. The executors may need to apply for a grant of probate in order to administer the estate, but this will be dependent on various factors including the value of the estate, the type of assets held and gifts made by the deceased during their lifetime.
Where someone dies without leaving a valid will (Intestacy)
If there is no valid will, who can deal with the administration of the estate and who will receive the estate’s assets are governed by the rules of intestacy.
Understanding grants of representation
A Grant of Representation is the legal document issued by the probate registry and authorises the executors or administrators to administer and distribute the deceased’s estate.
There are many different types of Grants of Representation, but the three main types are:
- Grant of Probate – for when there is a valid will
- Grant of Letters of Administration – for when someone dies without leaving a valid will (intestate)
- Grant of Letters of Administration with the Will Annexed – where someone dies leaving a valid will but there are no executors appointed, or the named executors have already died.
A Grant is typically required where the value of the estate exceeds £5,000, but this depends on the type of assets held and whether they are in sole name or held jointly with someone else. The application process for obtaining a Grant varies dependent up on the type of Grant required, the value of the estate and whether there is an IHT liability.
Executors or administrators must first ascertain the deceased’s assets and liabilities before applying for a Grant. If IHT is due, some or all of the tax must be paid before the application for the Grant can be submitted to the probate registry dependant on the types of assets held in the estate.
Next steps
After obtaining the Grant (if necessary), executors or administrators must:
- Collect the estate’s assets, such as bank accounts, investments, property, or shares
- Settle liabilities which were outstanding at the date of death or incurred during the estate administration, for example Court fees or estate agents’ charges
- Sell or transfer any properties held in the estate
- Calculate and report any tax liabilities, like income or capital gains tax, to HM Revenue and Customs
- Distribute the estate assets according to the terms of the will or under the intestacy rules if there is no will
- Provide an estate account document to the residuary beneficiaries
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