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If the deceased made a will, you should be able to find a copy with their personal papers. If you can't find a copy, check with the deceased's solicitor to find out if a will has been made, and whether they have a copy of it.
The will sets out how the deceased wanted their estate to be distributed, and should also name the executor(s) of the will who will be responsible for dealing with the estate.
If no executors are named, ask your solicitor about requesting the probate registry to appoint one. Those appointed by the probate registry are called administrators. Often the surviving spouse or next of kin is appointed as administrator.
The executor's/administrator's duties
- Make an inventory of the deceased's estate (eg financial products, possessions, property as well as money in bank accounts, savings, investments and insurance policies).
- Apply for a grant of probate/ letters of administration (not needed for estates with a value of less than £5,000 unless there is land, property or shares in the estate).
- Find out if the deceased owed any money ie loans, credit cards and overdrafts. These will be paid from the estate proceeds.
- Find out if anyone owes money to the estate and arrange for this to be paid.
- Pay any Inheritance Tax.
The law currently permits a period of one year from the date of the deceased's death to sort out the estate before distributing it. After a year, you could become liable to pay interest to the state on any undistributed assets.
If there isn't a will
An application will have to be made to the probate registry for letters of administration. A spouse or close relative will normally do this. Working out who is entitled to apply can be complicated. It may be easier to consult a solicitor will be able to tell you if you can apply.
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If you're appointed as the Executor of the will, you will in most cases (depending on the value of the estate) need to apply for a Grant of Probate. If no will exists the proposed administrator will need to apply for letters of administration.
These documents are needed to allow the executor/administrator to make and receive payments from the estate. Most organisations usually require at least sight of one of these before releasing any money or other assets due to the estate. You will need one of these documents if there's any freehold or leasehold property to sell - check with the company handling the sale.
Applying for a grant of probate/letters of administration
You will normally need to apply to the probate registry. You can ask a solicitor to help you with your application, or you can apply yourself. You can find out more about this on the Law Society website at www.lawsociety.org.uk.
The grant provides proof to banks, building societies and other organisations that you have authority to access and distribute funds and property owned by the deceased.
If Inheritance Tax is due on the estate, this must (usually) be paid before a grant can be issued. For information on the nearest probate registry to you (for England and Wales) telephone 0845 302 0900 (Monday to Friday 10am - 4.30pm.)
In Scotland the grant is referred to as a Grant of Confirmation. For information about how to complete the forms please contact your local sheriff's court. The number can be found by telephoning the Scottish Court Service 0131 229 9200 (Monday to Friday 9am - 5pm) and giving the last permanent address of the deceased.
When might a grant of representation not be needed?
If the value of the deceased's estate is below £5,000, and doesn't contain any land, property or shares, then it may be possible to deal with the estate without obtaining a grant. Also, a grant might not be needed if the whole estate is held in joint names and passes automatically to the surviving joint owner. In most cases, organisations will need to see the grant before releasing the deceased's assets - any change to this procedure will be at their discretion. You should check with a solicitor first.
This can be useful if money is needed from the deceased's estate to pay for immediate expenses such as the funeral, mortgage or house insurance. At Egg, to help you with these costs, we may be able to release funds from an Egg Savings Account held in the deceased's name, directly to the funeral director. To be able to do this for you, we'll need the original funeral costs invoice from the funeral director, detailing their bank account number and sort code for us to transfer the funds to.
If the bank or financial institution doesn't require a grant, it may ask for the executor/administrator to sign an indemnity. This is to protect the organisation if it later turns out that the money has been paid to the wrong person.
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When someone dies, their debts need to be settled from their estate. Another individual is only responsible for a debt if they had a joint loan, agreement, or provided a loan guarantee for the deceased.
If you had a joint account with the deceased and are having problems repaying a debt on an Egg Loan or Egg Mortgage - please speak to our Collections Department on
0845 6000 296.
They're available from 8am - 9pm Monday to Friday, and 9am - 6pm Saturday and Sunday.
Any outstanding debts must be paid from the estate before anything is given to people named in the will. Repayments of any loans, credit cards or credit debts form a part of the estate's debts. It's worth checking to see if any debts are covered by a payment protection plan.
Normally, if someone's debts are more than the assets left in their estate then there will be a pro-rata settlement. This is when the funds left in the estate will be distributed evenly between the creditors.
Other payments you may have to make include:
- Rent or mortgage on the deceased's home.
- Funeral costs.
- Any outstanding bills.
- Money you may be able to collect includes:
- Tax rebates.
- Life insurance.
- Money from pension schemes.
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Once you know the value of all the assets the deceased owned, you'll need to work out whether any Inheritance Tax is due. For the 2009/2010 tax year, Inheritance Tax will be payable where the value of the estate is over £312,000. Remember that Inheritance Tax due will have to be paid before a grant of probate or letters of administration can be issued.
If you want Egg to release funds from an Egg Savings Account to pay the Inheritance Tax, we'll be happy to send the required amount directly to the HM Revenue and Customs. Before we can do this we need to see an IHT200 or D20 form. You can get these from the HM Revenue and Customs.
Inheritance Tax can be tricky, so consider seeking advice from a solicitor, accountant or financial adviser. Meanwhile, if you want an idea of some of the implications of Inheritance Tax have a look at www.hmrc.gov.uk.
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