It can be overwhelming when someone close to you dies. However, at the same time you know that you need to make important decisions. Some of the steps below are matters that you will want to deal with yourself, others you may want to consider instructing a solicitor:
- Find the last Will:
If the deceased left a Will it can usually be found amongst their personal belongings or with their Solicitor/Bank. If there is a Will, the first thing to check is for requests in relation to funeral arrangements.
- Legal responsibility:
If there is a Will, there will be named Executors who have legal authority to deal with the Estate (property, possessions and money).
Where there is no Will the law (Intestacy Rules) sets out how the Estate will be distributed and usually the nearest relative takes legal responsibility becoming the Administrator.
Whether or not there is a Will, the person with legal responsibility will be held personally liable in law if the Estate is not dealt with properly.
- Register the death:
Death should normally be registered by the person taking legal responsibility within five days of death. Contact the Local Register Office. They will help with the process.
- The funeral:
This is usually arranged by the person taking legal responsibility Funeral directors will help with all arrangements.
The person making the arrangements will be responsible for the costs but where the deceased left sufficient money these costs will be met by the Estate out of the deceased’s bank account.
- Probate – what does it mean?
In order to deal with the assets, it is often necessary to obtain authority of the court. The court will issue a document to the Executors called “Probate” if there is a Will. If there is no Will, the closest relative will obtain “Letters of Administration”. These documents allow the Executor or relative to sell the assets of the deceased.
- Can I manage without Probate?
If the estate is small and none of the financial institutions require Probate or Letters of Administration, then it is possible to deal with the Estate without applying to the court. The financial institutions have their own procedures which should be followed.
Usually there are two taxes which are relevant, Income Tax and Inheritance Tax.
There may be a final Income Tax return to complete for the deceased for the period from the preceding 6 April to the date of death.
Inheritance Tax is a tax which is payable on the value of the estate at the date of death. The current rate of tax is 40% of the value of the estate above the Nil Rate Sum, which currently is £325,000. (However it is also possible to use up any unused Nil Rate Sum from a deceased spouse’s estate so the tax free sum available is often much higher). For large estates, a detailed account must be submitted to the tax office and any tax due must be paid before the court issues Probate.