Author : Jessica Hanson
Date Published : 12/17/2018 1:13:26 PM
When a loved one dies, everything they leave behind is known as their estate. This includes:
- All finances, including cash, savings in bank accounts and building societies
- Life insurance policies
- Any money owed to them by someone else
- Shares in a company
- Real estate property, such as their home and any holiday homes
- Personal belongings, such as jewellery, cars and clothes
When someone dies, the executors or administrators of the will are responsible for managing the estate and sharing it out in accordance with the will. Learn more about the duties of an executor and administrator.
1. Apply for probate
When someone dies, the named executor or administrator must apply for probate. This gives them the legal authority to manage the estate.
Probate is also known as ‘grant of representation’ in England and Wales, or ‘grant of probate’ in Northern Ireland. In Scotland it is known as ‘confirmation’.
2. Inform authorities of the death
Once the executor or administrator has successfully applied for probate, they should begin informing government and local authorities of the death. This includes, but may not be limited to:
- HM Revenue and Customs
- Department for Work and Pensions (DWP)
- Passport Office
- Driver and Vehicle Licensing Agency (DVLA)
- The local council of the person who died
Alternatively, you may be able to use the Tell Us Once service to notify multiple organisations at once. Check if the service is available in your area online.
3. Pay all debt and taxes owed by the estate
If your loved one owed any money, such as loans, credit cards or a mortgage, you must inform their creditors of their death. These debts must be paid before any inheritance can be given out from the estate.
You may need to sell property or shares from the estate to pay debts. If the value of the estate cannot cover these debts, you do not have to pay off the debt from your personal savings.
You will also need to pay any taxes owed by the estate, such as income tax up to their time of death. You will have to work out how much inheritance tax has to be paid directly from the estate. This must be done before inheritance can be distributed, usually within six months of the death.
4. Distribute the estate
Once all debts and taxes are paid from the estate, any remaining money, property and possessions can be given out as stated in the will. It is the executor or administrator’s responsibility to make sure everything is given out as the will says.
Find out more about probate and the roles of executor and administrator.