What to do after someone dies

Registering the death, arranging the funeral or other ceremony and notifying banks and DWP are the most urgent steps to be taken, but how are the financial affairs of the deceased sorted out?

Is there a Will?

It is vital to find out if there is. The Will states who should manage the financial affairs of the deceased (“Executors”) and states who is entitled (“Beneficiaries”) to the deceased’s money and assets (the “Estate”). The Will may be in a drawer at home, at a bank or solicitor’s office or possibly kept by a relative or friend.

If there is no Will, or it can’t be found?

The deceased will have died “intestate”, in other words, without a Will. This is not necessarily disasterous. The estate will be managed by the closest relative and the closest relatives will inherit. It is particularly important to obtain professional advice in such case.

Probate – what does it mean?

In order to deal with the assets of the deceased it is often necessary to obtain financial 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 cash in or sell the assets of the deceased.

Can I manage without Probate?

If the estate is small and none of the financial institutions involved wishes to see Probate or Letters of Administration, then it is possible to sort out the financial affairs without applying to the court. The financial institutions involved will have their own procedures which should be followed.

What about tax?

Usually there are only two taxes which may be relevant, discussed below.

Income 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. Sometimes this may lead to a repayment being made to the estate, sometimes tax will be due.

Inheritance Tax

This is a tax which is payable on the value of the estate at the date of death. For deaths on or after 6th April 2009 the 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 actual tax free sum available is often very much higher). For large estates a detailed account of the estate must be submitted to the tax office and any tax due must be paid before the court issues Probate. It is advisable to obtain professional advice when handling such estates.

Other points to note

Keep a careful account of any monies handled if dealing with an estate.

Be sure to settle any debts before paying monies to the beneficiaries.

Keep members of the family informed of progress to avoid arguments.

When dealing with an Intestacy, prepare an accurate family tree so that no beneficiary is missed out.

Take professional advice if there are problems – professional fees incurred in dealing with the estate are payable out of the estate before it is distributed.

Please call our Wills team on 033 3344 9600 for more information.