Whilst dealing with a death is always difficult, there are still a lot of financial and legal duties that need to be carried out. This can be quite a bit of work, so it helps to know what you’re doing in advance. That said, the process itself can provide valuable experience.
This can be broken down into roughly three areas. First of all, the estate needs to be evaluated and inheritance tax paid. Secondly, there is the actual dividing of the estate itself, in accordance with the will. In between this, the correct Executors need to be found or, in some cases, chosen. The Executors are the ones in charge of overseeing a lot of this procedure, so they have a very important and delicate role and position to perform.
Evaluating the Estate
Before any estate or possessions can be handed out, they need to be valued. This is important for a number of reasons. First of all, it helps when dividing the estate by value. Secondly, it can catalogue every possession in question to summaries the estate.
Furthermore, it’s also an important step in calculating inheritance tax. This is a difficult process, as you need to evaluate everything fully. If the total amount is below the nil rate band (currently at £325,000) the inheritance tax does not come into effect. Anything over this and a 40% tax is applied. As such it’s important to have a fully valued estate.
Dividing the Estate
When dividing the estate, it is much easier if the deceased left a will. Not only does this allow for their final wishes to be met in terms of their possessions, it gives you direct instructions to follow. However, not everything is specifically detailed. Some things may be left unmentioned, or simply referred to in percentages or value (for instance: “half of my estate”). This is one of the examples where the valued estate is crucial, as this makes dividing it in accordance to those instructions easier.
Secondly, the valued estate is also used when there is no will. In this case, the Estate is divided in accordance with rules of intestacy. This determines who gets how much. Typically, the estate goes to the spouse, but estates over a certain amount, plus other certain criteria, can mean other people are entitled. In general, rules of intestacy works on next of kin, moving outwards in ‘classes’ of kin is none can be found. Step siblings, friends and non-registered partners are not counted in this process.
Also known as Personal Representatives, these are the people charged with the responsibility to carry all of this out. If you’re named in the will as such, this becomes your obligation and responsibility. However, when there is no will, or no one mentioned, you may still be given a Letter of Administration, which also appoints you to be a Personal Representative. You can also apply for this, or for a Grant of Probate.