When a person dies, someone has to sort out their estate – their money, property, possessions and debts.
If the deceased person left a will, this will explain what should happen to their estate. The will should specify who the executors are – the people who will sort out the estate.
They will need to apply for a grant of representation at the local Probate Registry to give them the legal right to do so. The right to deal with an estate is known as ‘probate’.
If the person didn’t leave a will, or the will is invalid or doesn’t specify executors, the person who deals with the estate is called an administrator. They will need to apply for ‘letters of administration’ at the local Probate Registry.
However, the law decides who will inherit the estate.
- The person’s spouse or civil partner and children will automatically inherit all their personal possessions.
- The spouse or civil partner inherits at least the first £250,000 of the estate.
The rules around anything over £250,000 are complex and you should take legal advice on this.
As the executor or administrator you have a legal responsibility to pay off any debts or outstanding payments before distributing the estate. It is recommended that you put a statutory advertisement (under the Trustee Act 1925 for England, or the Trustee Act 1958 in Northern Ireland) in The Gazette.
The purpose of publishing a deceased estates notice in The Gazette is to ensure that sufficient effort has been made to locate creditors prior to distributing the estate to beneficiaries and protecting the executor or trustee from being liable for any unidentified creditors.
You can use money from the estate to pay any fees as part of the probate process.
If the estate is very small – less than £5,000 – probate isn’t usually needed. In this case, you should write to the bank, building society, or the organisation holding the money.
Inheritance Tax may have to be paid on the estate if it’s over a certain amount. The current threshold is £325,000. Anything over that threshold is taxed at 40%.
Most estates are valued at below the £325,000 limit so there isn’t any Inheritance Tax to pay. There is also no Inheritance Tax to pay on estates left to a spouse or civil partner, or to charity.
If the deceased person had a spouse or civil partner who died before them, their threshold could be worth up to £650,000 (twice the current threshold). Read more information on Inheritance Tax