Estate Administration Guide
What is estate administration?
Estate administration is the process of handling an individual’s affairs after they’ve died, or otherwise phrased as administering the estate of someone who has passed away. An estate includes everything owned by the person who has died, such as money, shares, property and personal possessions.
The estate administration process involves registering the death, arranging the funeral, handling the property, valuing assets and debts, applying for the Grant of Probate or Grant of Letter of Administration, completing all the relevant tax forms, setting up any Trusts that may be in the Will, selling or transferring shares, settling any debts and distributing funds to beneficiaries.
If there is a property, you may also need to source specialist buildings insurance, arrange clearance of the property, contact utility providers, obtain a property valuation, obtain contents valuation, arrange postal redirection, maintain the property to a high standard, and arrange to transfer the property into the name of the beneficiaries or arrange the sale of the property.
If the deceased didn’t leave a Will, you may need to consider reconstructing the family tree to ensure the correct people inherit according to the government’s law. Read the section on intestacy to find out more.
Estate administration can be a lengthy process and the tasks that need to be carried out will vary as every estate is made up of different aspects. The make up of the estate will determine what tasks need to be carried out.
Who looks after estate administration?
Personal Representatives usually handle the estate administration as they are legally entitled to administer the deceased’s estate. The term Personal Representative includes both Executors and Administrators.
If the deceased left a Will, the Executor(s) named in the Last Will and Testament is responsible for the estate administration. However, if the person died without a Will (also known as intestate), then an Administrator will take on the responsibility of estate administration.
An Executor or Administrator does not have to accept the role and can choose to appoint a professional estate administration provider to help. Professionals can be experienced in dealing with estate administration and can look after estate administration on behalf of the Executor or Administrator. It may be worth considering whether you’d like to seek the help of a professional. The ‘instructing professionals to do estate administration’ section will provide you with more information about seeking specialist help.
How do I know if I've done the estate administration correctly?
Unfortunately, you will not receive a notification confirming or denying whether everything has been completed correctly if you are administering the estate yourself.
If the estate is subject to Inheritance Tax, you will receive confirmation from HMRC when you’ve paid all the Inheritance Tax and interest you owe. However, they will not send receipts for each payment you make.
You should keep a record of what has come in and out of the estate and produce final ‘estate accounts’ which highlights how any property, money or possessions will be split between beneficiaries.
Step by step guide to estate administration
Below is an extensive list of the tasks that may be involved in the estate administration process.
When the death occurs
• Obtain the medical certificate
Deal with the Will
• Find out if the person who died had a valid Will (if the deceased didn’t have a Will, instruct a professional to reconstruct the family tree)
• Locate all important paperwork
Arrange the funeral
Property
• Source specialist buildings insurance
• Arrange clearance of the property
• Notify utility companies
• Obtain property valuation
• Obtain contents valuation
• Arrange postal redirection
• Arrange to transfer the property into the name of the beneficiary(s) or arrange the sale of the property
Administration tasks
• Value the assets and debts
• Inform other relevant companies of the death
Grant of Probate/Letter of Administration (or Confirmation in Scotland) application
• In England and Wales, apply for the Grant of Probate if there is a Will or Grant of Letter of Administration if there is no Will.
• In Scotland, apply for Confirmation.
Tax work
• Complete relevant Inheritance Tax forms and any subsequent forms that may be required
• Correctly calculate any Inheritance Tax that could be payable
• Ensure the Inheritance Tax is paid within the HMRC guidelines
• Complete Income Tax work for the year of death and for the period post-death
• Review the estate for Capital Gains Tax
Other administration tasks
• Set up any Trusts that may be in a Will
• Sell or transfer shares
Pay beneficiaries their inheritance
• Distribute funds
• Obtain confirmation of funds received
Produce final estate accounts
• Confirm the values of assets and debts as at the date of death
• Record the amounts paid or transferred to the beneficiaries
Instructing professionals to do estate administration
Estate administration can be a time-consuming burden that you may wish to pass to an estate administration provider. Executors and Administrators (also known as Personal Representatives) have the right to instruct a professional estate administration provider to handle the affairs of the person who has died.
Professionals who offer an estate administration service may include solicitors, Will writers, financial advisers or companies that specialise in offering estate administration.
Before instructing an estate administration provider, you should consider the price, service offering, regulation and who holds the legal and financial responsibility.
Price
There are three main charging methods that estate administration providers tend to use. They may provide you with a price for the service upfront, offer hourly rates or charge a percentage of the estate. Hourly rates and a percentage of the estate can mean that the total price is unknown as you may not know how many hours it will take or what the estate value is. Make sure you understand the price you’ve been quoted – find out exactly what is and what is not included.
Service
What is included within the service can vary between estate administration providers. Some providers will only obtain the Grant of Probate but others may take on more tasks. We advise asking exactly what tasks they will undertake and whether you’ll be required to handle anything yourself.
Regulation
It is advisable to check whether the estate administration provider you are considering is regulated to provide estate administration services. Some regulated firms will inform you of what they are proposing to charge upfront as regulation rules require legal professionals to be transparent about the price.
Legal and financial responsibility
The legal and financial responsibility of estate administration usually falls to the Executor or Administrator. This means that if the estate was incorrectly distributed they would be personally liable. However, some estate administration providers may take on this responsibility. Find out if you would still be financially and legally liable if something was to go wrong.