When someone dies, their representative has the job of winding up their estate and finalising their affairs.
If they have left a Will, then their representative is known as the executor of their Will. If there is no Will, then the job is undertaken by their administrator, appointed in accordance with the Rules of Intestacy.
The job of winding-up an estate
The executor’s (or administrator’s) job can be lengthy and complex, particularly in the case of a larger estate.
They are responsible for collecting in the deceased’s assets and valuing them, then accounting to HM Revenue & Customs for any Inheritance Tax which is due.
They need to make an application to the Probate Registry for a Grant of Probate or, in the case of an administrator, the Grant of Letters of Administration. Once this is received, then the assets can be sold or transferred in accordance with the Will or the Rules of Intestacy.
This could include clearing and selling any property that the deceased may have owned, which may be time-consuming.
Completing an estate administration often takes around 9-12 months, however it can frequently be longer.
Executors are not bound to distribute funds to beneficiaries for one year. After this time, they can be required to pay interest on any cash gifts that have been left.
Delays in estate administration
There are numerous potential causes of delay in respect of an estate administration. If the deceased did not leave a Will, this
could cause difficulties and some time could elapse while a thorough search is made to confirm that no Will was left. This would usually involve contacting a number of organisations, including the Law Society’s National Will Register and local solicitors. Failure to leave a Will also risks disagreement between family members, which could hinder the estate distribution.
Locating beneficiaries is sometimes an issue, particularly when a Will was written a long time before death and not updated. This could involve making an extensive search and placing advertisements in local papers.
Calculating Inheritance Tax is not always straightforward, as any cash gifts that the deceased made within the seven years preceding their death must be notified to HM Revenue & Customs and tax on them calculated and paid on a sliding scale. Establishing how much was gifted and when can be tricky and may involve going through the deceased’s financial records.
All of the deceased’s debts must be paid. Creditors have six months from the date of death to come forward and request payment. If a wide range of debts are anticipated, the executor can advertise for unknown debtors to come forwards.
When there is a delay in estate administration
If you are acting as an executor or administrator and there is a hold up in the administration, it is advisable to contact the beneficiaries and explain what the problem is. Provided there is a good reason for the delay, this should not be an issue. Interim payments can be made to the beneficiaries if the estate contains sufficient funds.