After someone dies, their assets need to be collected in and distributed to their beneficiaries. We look at the deadlines for completing this work.
The person who deals with the administration of an estate is known as the executor or, where there was no Will, the administrator. It is their job to value the estate, apply for probate if needed, work out any tax liability, discharge debts, liquidate assets, prepare estate accounts and arrange for distribution of the money and personal items in accordance with the Will or the rules of intestacy.
The time limit for administration
One year is allowed for completing the administration, with Inheritance Tax due by the end of the sixth month after the person’s death.
If the deceased had assets in many different places, for example different bank accounts, shareholdings and assurance policies, then it can take a considerable amount of time to even work out how much is in the estate.
For this reason, it is advisable to start work on the administration as soon as possible and make sure there are no avoidable delays.
If there is a property, this will need to be sold. Again, this can take a considerable amount of time, so the wheels need to be set in motion early on. This may involve valuing items, selling contents and arranging for clearance as well as the actual property sale itself.
When the work can’t be completed in a year
It is not unusual for administration to take longer than a year, for example if it takes a long time to find a buyer for the house or if there is an issue with a government department such as the Department for Work and Pensions.
Where the executor or administrator can show that they have acted in the best interests of the estate and that the delay is justifiable, then more time is usually permitted.
If the delay continues, interim accounts can be prepared and interim payments made to the beneficiaries. Beneficiaries will be entitled to interest on payments that remain outstanding after the one year period has come to an end.
Deed of variation deadline
If a beneficiary wants to change the share they receive, for example to include another family member or for Inheritance Tax reasons, they can execute a deed of variation to redirect part of their legacy to someone else. The deadline for signing a deed of variation is two years from the date of death.
If you are concerned about the time limits for completing an estate administration, you can engage a professional to deal with the work on your behalf.
If you would like to speak to an experienced probate lawyer, ring us on 01634 353 658 or email us at rob@pembrokewillwriters.com.