Faced with a Bereavement?

Not sure what to do or how to do it?

Firstly, sorry for your loss.

Losing a close family member isn’t easy. If, in addition to your feeling of loss, you are confused about what needs to be done now as the next of kin or as executor then you may be looking for help.

Colin Snaith will provide you with the initial help, free of charge, to identify what needs to be done. At the end of that process of assessment you will know whether you want to do the work yourself or, if not, Colin will provide you with a fixed price to undertake any necessary work.

The process of managing your loved one’s estate:

In outline the process to be followed to deal with the estate is as below. This isn’t a comprehensive or detailed list and should not be used as a guide to your actions. It is intended to highlight the major steps in a ‘normal’ case.

First steps

Ascertain the facts
  • Confirm the identity and evidence of the death of the deceased is in order
  • Confirm the identity of executors and / or next of kin
  • Identify all assets and liabilities of the person who has died
Decide who is going to do the Estate Administration work
  • This is where you decide based on your comfort in dealing with dozens of forms and letters and officials if you are going to do the work yourself of retain Colin, or someone else, to do the work for you
Complete the necessary forms*
  • Depending on the complexity of your loved-one’s estate there could be a significant number of forms and letters to banks, shareholding administrators etc to complete.
Application for the Grant of Probate or Grant of Letters of Administration
  • Once the forms are completed they are submitted
    • Where no IHT is due (Excepted Estates) the forms are submitted to the Probate Registry for a Grant.
    • Where IHT is due forms must be submitted first to HMRC who will release a certificate (if everything is in order) to enable the application to be sent to the Probate Registry for a Grant.
  • Assuming everything is in order the Probate Registry will issue the Grant of Probate or Grant of Letters of Administration.

Once you have received the necessary Grant of Probate or Grant of Letters of Administration

Settling of Liabilities
  • Before any assets from the estate can be distributed all liabilities of the estate must be settled.
  • These can include:
    • Funeral expenses
    • Inheritance Tax (IHT)
    • Other debts of the estate including but not limited to HMRC or the DWP
  • Sometimes there is not the necessary liquid funds (cash) available to settle these debts in which case it may be necessary to take out a loan
Distribution of Assets to Heirs
  • Depending on whether there was a valid Will the assets of the estate will either be distributed according to the Will or according to the rules of intestacy.

Things to complicate matters

Sometimes an estate is simple and straightforward to manage – where are no complicating factors and Inheritence Tax (IHT) is not due. This type of estate is called an Excepted Estate where it is passing directly to the spouse of the deceased and / or no IHT is due.

Sometimes things do get more complicated. The following list are some of the things which can make the process of handling an estate more complex

  • The estate is worth over £1 million
  • Gifts given in the 7 years prior to death
  • Property which had been gifted but which was lived in by the deceased
  • The deceased was the recipient of an income from a trust fund or the recipient of a lump some on the closure of a trust
  • The estate includes overseas assets

*Forms

Excepted Estates (where everything is passing to a spouse and no IHT is due) require form IHT205 – https://www.gov.uk/government/publications/inheritance-tax-return-of-estate-information-iht205-2011

Other Estates require form IHT400 accompanied by relevant schedules depending on the nature of the assets and estate.

Currently the Government website lists the forms and associated schedules at https://www.gov.uk/government/publications/inheritance-tax-inheritance-tax-account-iht400

People find they need help for a number of reasons:

  • They can’t get access to bank accounts etc of deceased person (Note: some banks will release funds (the full estate) up to £20k when just going to next of kin on presentation of a letter of indemnity)
  • They don’t know what to do – but know that something must be done when  Dad / Mum or a Spouse has died
  • Sometime down the line after a death they find that they can’t sell a property because it was part of an estate for which a grant of probate was never obtained
  • Bereavement can be devastating & help is sometimes required for that reason alone, even for the simplest of estates.

Time Limits:

IHT due

If IHT is due on the estate then the first payment is due to HMRC 6 months after the end of the month in which death occurs. Therefore, the initial process of establishing the Assets & Liabilities the estate needs to be completed in that timeframe.

IHT not due

There is no legal time limit for starting, or completing, the processes if no Inheritance Tax will be due on the estate.