When someone passes away, there are necessary steps to manage their estate, which encompasses all the money and property they owned at the time of their death At Sydney Mitchell, we have a dedicated team of experts, including specialists in handling high net worth and complex estates, such as those involving business or agricultural properties.
Administration matters
Dealing with the administration of someone’s estate after their death is a process which involves many steps. These steps are dependant on various factors, such as whether the deceased left a valid will, whether a Grant of Representation (Grant) is needed, and whether the estate is likely to be subject to inheritance tax (IHT.
Estates where there is a valid will
If the deceased left a valid will, it usually names executors. These are the people with authority to deal with administering the estate. The executors may need to apply for a Grant of Probate, if required, in order to administer the estate.
In the absence of a valid will (Intestacy)
If there is no valid will, the administration of the estate is governed by the “rules of intestacy.” These rules determine who is entitled to deal with the administration of the estate.
Understanding Grants
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 types 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 funds held in bank accounts, investments, or shareholdings
- Potentially sell of transfer any properties held in the estate
- Settle liabilities outstanding at the date of death or those incurred during the estate administration
- Calculate and report any tax liabilities, for example capital gains or income or tax, to HM Revenue and Customs
- Distribute the estate according to the terms of the will or the intestacy rules if there is no will
- Provide an ‘estate account’ document to the residuary beneficiaries.
