If you have been appointed as an executor of a will, you will have responsibility for the process of administering the estate. Depending on the value of the estate, you may need to apply for a Grant of Probate or a Grant of Letters of Administration. In this blog post, we will provide you with an overview of the steps involved in estate administration, the difference between Probate and Letters of Administration and where it might be useful to instruct a solicitor.
Step 1: Obtaining the Death Certificate
Before you can start administering the estate, you will need the death certificate. This provides important information about the deceased, such as their name, date of death, and the cause of their death.
Step 2: Locate the Will
This will include the deceased’s instructions for how their estate should be dealt, and it may include funeral wishes. It will also appoint the executors of the will. Any will made by the deceased should be signed, dated and witnessed by someone over the age of 18 who is not named as a beneficiary in the will. The existence and validity of the will determines the application that is made to the Probate Registry.
Grant of Probate
Where there is a valid will, the Grant of Representation required is a Grant of Probate. To apply for this, the acting executor will have to sign an application to state the name, date of birth, date of death and address of the deceased, the value of the estate and the details of any executors not acting. This is sent to the Probate Registry with the original will, and the Grant is issued in the name of the applicant.
Grant of Letters of Administration
Where there is no valid will, the Grant of Representation required is a Grant of Letters of Administration. As no valid will exists, there is no executor, and instead, the person with the legal authority to administer the estate will be the Personal Representative of the estate and is determined in priority order, starting with spouse or civil partner, then children, then grandchildren. The document works in the same way as a Grant of Probate, and the Grant of Letters of Administration is issued in the name of the applicant.
Step 3: Valuing the Estate and making the application
To make the probate application, the Probate Registry will need to know the value of the estate. This is done by writing to all account providers and obtaining a property valuation. The value of the assets then forms the gross value of the estate. Any liabilities are then taken away from the gross assets to leave the net value of the estate. Inheritance Tax may be payable depending upon the deceased’s circumstances and the estate value. The figures will then be provided to the Probate Registry with the application for the Grant of Representation.
Step 4: Obtaining the Grant and Closing accounts
Once the application for the Grant is approved by the Probate Registry, they will issue the Grant. At this point, executors or personal representatives may decide to place notices in the local newspaper and the London Gazette to give any creditors the opportunity to come forward to make a claim for their money. Once the Grant is received, the deceased’s accounts can be closed. This part of the estate administration involves a lot of paperwork for closing accounts and arranging to sell the property. The executor is responsible for ensuring that all liabilities owed by the estate are paid, so once estate funds are collected, liabilities should be paid right away.
Step 5: Gifts and Residuary Estate
Once liabilities have been paid, any legacies in the will should be distributed to the beneficiaries. Once these have been paid, what is left is known as the residuary estate. This is sometimes known as the Trust Fund and is to be distributed to the residuary beneficiaries named in the will.
Step 5 (intestacy): Residuary Estate
If the deceased did not leave a will, the personal representative is responsible for ensuring that the estate is distributed by the intestacy rules. These are a strict set of rules which dictate how the estate should be distributed depending upon the deceased’s family members and includes:
If the estate passes to the children of any of the above, the children only inherit the share that their parent would have inherited.
Instructing a Solicitor
Clearly, the role of an executor or a personal representative carries a lot of responsibility. This is why many people elect to instruct a solicitor to do the bulk of this work on their behalf. Some reasons an executor may choose to do this include tax issues, complicated will structures, situations where the will leaves money or property in trust or simply just because it is a time consuming and potentially upsetting process.
For further assistance with dealing with estate administration and probate, please contact Mark Gregory or Jill Waddington in the Private Client department.
