Guide to Administration of an Estate
In order to give you a realistic expectation of how long it is likely to take to administer an estate it is helpful for you to understand what is involved. The solicitor instructed by the Personal Representative (PR) – an executor or administrator (depending on whether the person died with, or without making a will) – will be able to give you an estimate of the length of time he or she considers will be involved to carry out the work necessary to administer the estate. This means that:
- the assets of the deceased are collected in
- any gifts set out in the deceased’s will (if there is one) are paid
- any debts, tax, funeral expenses and costs to do with the administration are paid
- and what is left over is distributed to the beneficiaries entitled to it
What are the duties and responsibilities of PRs?
PRs have a number of duties and responsibilities imposed on them by law and there are sanctions available to beneficiaries and to the tax authorities if these are not carried out correctly. We will therefore help you to be sure that:
- the estate is distributed strictly in accordance with the terms of the will or the law which governs the distribution of an estate on intestacy
- the information supplied to HM Revenue & Customs in relation to inheritance tax (IHT), income tax and capital gains tax is completely accurate
What is needed to set about administering an estate?
In all but the most straightforward cases, we will need a grant of probate (where there is a will) or a grant of letters of administration (where there is no will). “Grant” refers to both of these. The grant will enable us to cash in assets or transfer them to beneficiaries.
What is the solicitor’s role?
To ensure that:
- the grant is obtained and the estate administered as quickly and efficiently as possible
- you do not have to deal with what may be complex and unfamiliar laws and procedures at a time when you may also be coming to terms with the loss of a close relative or friend
- you comply with your duties and responsibilities as a PR and do not incur sanctions for breaches of those responsibilities
- the estate is correctly distributed between the beneficiaries
- the information given to the HM Revenue & Customs is correct
- the correct amount of tax is paid and any overpaid tax is claimed back
What are some of the things that the solicitor administering an estate will have to do?
- locate and read through the will
- get details of the assets and liabilities of the estate
- get date of death valuations for each of the assets and liabilities
value the estate
- complete the inheritance tax (“IHT”) account form (required even where no IHT is payable)
- prepare the application for the grant and get it sworn by the PRs
- pay any IHT due and arrange the early release of funds needed to pay it
- apply for the grant
- cash in or transfer the assets
- complete any tax returns and other forms relating to pre and post death income tax and capital gains tax (“CGT”), send them to HMRC, pay any outstanding tax and finalise the income tax / CGT position
- pay any liabilities and administration expenses
- make any gifts provided for in the will
- make payments to the residuary beneficiaries on account of the amounts due to them
- make any final adjustments to the IHT calculations and pay any additional IHT
- obtain an IHT clearance certificate
- keep the PRs and beneficiaries regularly informed of progress and send them interim estate accounts as and when required
- prepare final estate accounts and send copies to the PRs and the residuary beneficiaries for approval
- pay the final balances due to the residuary beneficiaries
- maintain proper records of all financial information and transactions in relation to the estate
- liaise with accountants, stockbrokers, financial advisers, insurance brokers, valuers, auctioneers and other professionals
- Whilst we endeavour to work as quickly as we can on any file, we are sometimes dependent upon third parties such as HM Revenue & Customs, the Probate Registry, banks and building societies, utility companies and sometimes other solicitors for information. We cannot, therefore, give fixed time estimates for how long any one estate will take to complete.
Why choose Hand Morgan & Owen
- At Hand Morgan & Owen we have a dedicated private client department comprising a partner, an associate and an assistant solicitor and experienced support staff all of whom have considerable experience and expertise in dealing with wills, estate administration, personal tax and trusts
- We take pride in the service we offer to executors, administrators and beneficiaries in dealing with the administration of estates and making things easier at what is often a very difficult time for those left behind.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances. (50587)