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If you have recently lost a close relative, and have been named executor of their estate, it is important to have a basic knowledge of probate law in order to understand and implement your responsibilities lawfully and effectively. This guide will provide you with a basic overview of the responsibilities you will be required to undertake upon being appointed executor.
As executor of the deceased’s estate, you will be responsible for carrying out the four following tasks:
- Ascertain the value of the deceased’s estate.
- Obtain authority from the Probate Registry.
- Pay any inheritance tax due.
- Distribute the estate to the beneficiaries.
At Seatons, we can help advise on each of these areas and offer a tailored service in line with your specific requirements.
Executors have to ascertain the value of the deceased’s estate and this includes obtaining valuations of all their assets and liabilities. This will include bank and building society accounts, shares, cars, houses, jewellery and furniture.
Everything that the deceased owned needs to be included by the executor. Certain assets that are jointly owned can pass automatically to others on death; such as a house that is jointly owned by a husband and wife, provided they are beneficial joint tenants.
Information will usually only be released by organisations to the executor if a certified copy of the death certificate is produced.
Unless the estate is very small, and under £5,000.00, organisations will not hand over the deceased’s assets to the executor without an official document from the Probate Registry of the High Court, which confirms that the executor is entitled to handle the deceased’s affairs. This is usually referred to as a Grant of Probate, if there is a will, or a Grant of Letters of Administration, if there is no will. In order to obtain a Grant, the Court will normally want to see the following three documents:-
- The original will (if there is one);
- A sworn document (the Oath), signed by the executor, which explains how they are entitled to act, and gives a valuation of the estate;
- An account for the Inland Revenue is needed and a receipted invoice from the Inland Revenue that Inheritance Tax has been paid by the executor. This must be obtained from the Inland Revenue beforehand, who will issue it upon being sent the Inland Revenue account and any tax due being paid.
Inheritance tax is a simple, if not well liked, concept. Upon death, the first £325,000 (as at April 2013) remains tax-free. Afterwards, tax is payable at 40% of the remaining balance. Certain categories of beneficiaries do not have to pay inheritance tax, such as spouses and charities. The executor must ensure that the correct amount of inheritance tax is paid on the deceased’s estate.
However, any gifts made by the deceased seven years prior to their death can give rise to an increase in their estate’s liability for inheritance tax. If inheritance tax is payable, then some, or possibly all of it, must be paid before the court will issue the necessary Grant. This means that the executor will possibly have to borrow the money. Preferential rates can often be obtained by arranging this through your solicitors.
Once the executor has received the Grant, they can proceed with gathering together the deceased’s assets, paying any outstanding bills, and then distributing the balance in accordance with the deceased’s will, if there was one, or in accordance with the law of intestacy if there was not a will.
The executor needs to keep a formal account of all the money they have received, paid out and passed on, including interest on any money held since the deceased’s death. All the beneficiaries are entitled to see this account. An executor does not have to deal with matters without assistance. They can always turn to a solicitor for help and assistance, whose fees will be payable by the estate. Often solicitors themselves will be named as the sole or joint executor in a person’s Will, so ensuring that the estate is wound up efficiently and effectively, with the minimum of delay.
Probate & Estate Specialists
I’m Adrian Chambers and specialise in Probate and Estate matters. We aim to provide our clients with an outstanding legal service.
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Please contact us for a free, no obligation chat on 01536 276300 or contact us online.