If the person left a Will, they will usually have named ‘Executors’. Executors are people who will sort out the estate, pay the person’s debts and distribute anything left over. The Executors will usually need to apply for a ‘Grant of Probate’. A solicitor can assist with this.
If the person did not leave a Will, there is a list of who may apply to sort out the estate. These are known as ‘Administrators’. The list starts with the husband, wife or civil partner (regardless of whether they were separated) and if there isn’t one, the children. If there are no children, it moves to grandchildren, great-grandchildren and so on. Whoever is entitled to apply must obtain ‘Letters of Administration’. Again, a solicitor can assist with this process.
Collectively, you may hear Executors and Administrators referred to as the ‘Personal Representatives’ or ‘PRs’ of the Deceased.
What does a Personal Representative do?
There are a number of practical steps that the PRs must take – for example:
- Registering the death
- Making funeral arrangements
- Securing the Deceased’s property (if it is empty)
- Arranging proper insurance for the property (if it is empty)
- Taking final meter readings and disconnecting services at the property (if it is empty)
- Redirecting mail (if it is empty)
- Notifying organisations such as the passport office, DVLA, car insurers etc
Although a solicitor may suggest these matters are dealt with, they will not typically be involved in taking these steps.
There is an excellent list of practical steps to take here: https://www.moneyhelper.org.uk/en/family-and-care/death-and-bereavement/what-to-do-when-someone-dies?source=mas
Your solicitor’s role where there is a Will
There is a great deal to do on the death of a loved one and at an already difficult time, the last thing most of us want to do is deal with the legal formalities. This is where a solicitor can help. Solicitors can assist with either or both of:
- Obtaining the Grant of Probate (or letters of administration)
- Administering the estate
At your first meeting, your solicitor will agree with you which tasks they will complete and which you will do yourself. They will explain some very important matters, including the possibility of an Inheritance Act claim if the assets are gifted too soon, and the possibility that the Personal Representatives might be held personally liable.
They will also explain the requirement to advertise for creditors in the London Gazette and local press under Section 27 of the Trustee Act 1925. Optionally, this step can be dealt with straight away by the Executors which can ensure fewer delays down the line.
You will be asked to provide a range of documents in addition to the questionnaire, including:
- Death certificate
- Last Will and Testament plus any codicils if there are any
If your solicitor will be dealing with the Deceased’s assets for you, they will also ask for:
- Account passbooks, certificates etc
- Details of online accounts including login information if available
- Details of any unpaid debts
Your solicitor will ensure these documents are stored safely and will provide a schedule.
Your solicitor will check the Will is valid and properly executed. If there are any problems with the Will, they may obtain affidavit evidence from witnesses.
They will examine the contents of the Will and determine how the Deceased’s estate will be distributed once all debts and liabilities have been paid. Note that some property will not pass in accordance with the Will – for example, assets held as ‘Joint Tenants’.
Your solicitor will ask you to complete a questionnaire, detailing all of the Deceased’s assets. You may need to go through their paperwork to obtain this information. They will send notification letters to banks, building societies, creditors etc to determine exactly how much the Deceased owned and owed. If the Deceased owned a property or other assets such as shares, your solicitor will arrange for an official valuation. They will also check how any ‘bricks and mortar’ assets are held at the Land Registry and they will complete the necessary forms to update the Land Registry title.
Your solicitor will contact the beneficiaries and inform them that they are entitled to a gift under the Will, with a likely timescale for payment. Beneficiaries often expect that they will immediately inherit their gift and they can be disappointed at best to discover this is not the case. This is one of the many advantages of using a solicitor to administer the estate – you do not have to deal with over-eager beneficiaries yourself!
Your solicitor will then complete a bankruptcy search against the Deceased, each Personal Representative and each beneficiary.
Your solicitor’s role where there is no Will
If there is no correspondence indicating that a Will has been drawn up at the Deceased’s home, your solicitor will check with various bodies which might include local solicitors, family, Certainty (the National Wills Register), the Probate Service and the Law Society to ensure that there really isn’t a Will for the Deceased. They may put advertisements in local publications.
If these efforts do not produce a Will (or even a signed copy), they will prepare a family tree and ask the family to sign a copy.
On occasion it may be necessary to employ the services of a genealogist, where the family tree is unclear.
Preparing accounts
HMRC require that accounts are submitted detailing the Deceased’s assets. This will lead to a calculation of any Inheritance Tax (IHT) that may be due. Your solicitor will prepare the accounts on the appropriate short or long form (depending on the estate) together with a Statement of Truth.
Once the accounts are prepared, you will then need to sign the IHT form and Statement of Truth.
Funding for both Inheritance Tax that is due and the probate application fee will need to be arranged.
There is a deadline for these steps to be completed.
Considering variations
If there is an Inheritance Tax bill, your solicitor may make recommendations as to how this can be reduced. Regardless of whether or not there was a Will, a ‘Deed of Variation’ may be advantageous under Section 142 Inheritance Tax Act 1984 and/or Section 62(6) Taxation of Chargeable Gains Act 1992.
For example, if the Deceased left his family home worth £200,000 to his sister and shares worth £200,000 to his children, your solicitor might suggest swapping these gifts around so that the estate can claim the Residence Nil Rate Band. All beneficiaries would need to be in agreement but typically they will be, if there is less tax to pay!
Once the Grant is issued
If any rectification of the Will is required, your solicitor will begin this process within 6 months of the Grant being issued.
If not already done by the Executors, your solicitor will place appropriate advertisements in the London Gazette and local papers.
They will discuss with the beneficiaries whether certain assets (such as shares) should be transferred to the beneficiaries or sold. They will be able to advise on Capital Gains tax here – there is no liability on the death of the Deceased, but there will potentially be a liability on any growth in the asset’s value since the death.
They will also establish which assets will be used to pay the Deceased’s debts and liabilities.
Your solicitor will then take steps to close the Deceased’s accounts and realise the assets.
If the Deceased’s home or any other properties will be sold, your solicitor will arrange for this to be put on market and will liaise with their conveyancing team.
If the Deceased held premium bonds, they will check to see if you would prefer these to remain in the draw for the 12 months following the death, or whether you would prefer them to be withdrawn immediately.
Distribution of the estate
Your solicitor will pay off any loan that was obtained for Inheritance tax and any funeral expenses if they have not already been paid. They will then pay off the Deceased’s deaths and any administrative expenses, including legitimate expenses of the PRs.
They will not distribute the balance of the estate until at least six months has passed since the Grant of Probate and at least two months has passed since the newspaper advertisements mentioned above were published. This is to reduce the likelihood of any claims against the estate and the possibility that the Personal Representatives will be held personally liable.
After the appropriate time periods have passed, they may make an interim distribution of what is left over. They will prepare draft interim accounts for the Personal Representatives.
Just before distribution, your solicitor will carry out another bankruptcy search against the beneficiaries. If any beneficiary is bankrupt, some or all of their inheritance may be due to the trustee in bankruptcy.
Your solicitor will prepare receipts for the beneficiaries to complete, confirming that they have received their gifts. Each will need to be signed and returned. If the Deceased’s property will be transferred to a beneficiary, your solicitor will prepare an Assent and arrange for registration of the transfer at the Land Registry. They will confirm that the new owner is to arrange appropriate insurance.
At this stage there will be a few practical steps to take, such as:
- Arranging final meter readings
- Transferring services into the beneficiary’s name
- Cancelling the existing policy of insurance
- Notifying the local council for council tax purposes
Finalising the estate
If at the end of the process any additional tax is payable to HMRC, your solicitor will prepare a further corrective account. On the other hand, if too much Inheritance Tax has been paid, they will claim a repayment. They will then apply for a certificate to prove that they have paid all Inheritance Tax that is due.
They may need to complete a further form if any of the assets in the estate have generated untaxed income or interest, or increased in value prior to distribution.
Your solicitor will then prepare a final estate account for you, including the firm’s bill. Once you have approved these accounts, they will close any PR accounts that have been used in the process, complete final bankruptcy searches, make a final distribution to the appropriate beneficiaries and ensure each beneficiary completes a receipt.
You will see that the process of probate is not a quick, simple one. You will often see firms advertise probate services for a low fee but typically very little of the above work will be completed for that fee.
An experienced probate solicitor can save you time, tax and grief. You don’t have to deal with difficult beneficiaries, nor concern yourself with the array of forms that HMRC require, particularly when assets increase in value.