When someone dies, they often leave behind an estate – this could be money, property, possessions and in some cases, debt.
If the deceased left a will, this will outline exactly what needs to happen to the estate. It will specify who the executors are – executors are the name given to those who are given the responsibility of sorting out the property left by the deceased.
Executors & Administrators
The executor will need to apply for a grant of representation at the nearest Registry to give them legal grounds to do so. The right to deal with these estates is also known as ‘probate’.
Should the deceased not leave a will, or it is found that the will is invalid and not specifying executors, the person that is then dealing with the estate is called an ‘administrator’. They will need to apply for ‘letters of administration’ at the local Probate Registry.
The person’s spouse or civil partner and children will be legally entitled to all their personal possessions. By law the spouse inherits the first £250,000 of the estate, but if the estate sums comes to over this figure, then things begin to get complex and legal advice should be sought.
The executor or administrator has a legal responsibility to clear off any outstanding payments before distributing the estate.
It is important to try and make every effort to make contact with the deceased’s creditors prior to distributing the estate, this means that any executor or trustee is abstained from being liable for any debt.
Should the estate be less than £5,000 then probate isn’t usually needed. If this is the case then writing to the holder of the money is the best way forward – this could be a bank or building society.
It is important to bear in mind that Inheritance Tax may have to be paid on the estate if it is over the threshold. The current threshold is at £325,000. Anything over that threshold is taxed at 40%.
There is no inheritance tax to pay on estates left to a spouse or charity.