You don’t always need Letters of Administration to deal with the estate. If they are required, the person who applies and obtains them is called an Administrator, or a ‘Personal Representative’.
When Letters of Administration are required
Letters of Administration will be usually be required if:
- The person died without a Will
- There is a Will but it is not valid
- There is a Will but it does not name Executors
- The Executors named in the Will are unable or unwilling to act
Who can apply for Letters of Administration?
You can apply for Letters of Administration if there is a valid Will which leaves the entire estate to you but no executors are named, or those that are named are unwilling to act.
If there is no valid Will, there is a list of people who are entitled to apply for Letters of Administration which runs in the following priority order:
- Spouse or Civil Partner of the Deceased
- Child of the Deceased
- Grandchild of the Deceased
- Parent of the Deceased
- Brother or Sister of the Deceased
- Nephew or Niece of the Deceased
- Another relative of the Deceased
Unmarried partners/those not in a civil partnership cannot act as an Administrator (they would, however, be able to act as an Executor if there was a Will and they were named as such).
Exceptions – when Letters of Administration are not required
There are a number of scenarios where Letters of Administration are not required.
- The estate is made up entirely of cash (bank notes and coins) and personal possessions such as jewellery or a car.
- The entire estate is owned as ‘beneficial joint tenants’ (for example, money and savings in joint bank accounts) so there is no divisible share. The property passes automatically to the surviving owner.
- The amount of money in the estate is small – e.g. £5,000 or less.
There are other circumstances where Letters of Administration are not required.
If you are not sure whether you need to apply for Letters of Administration, ask us for advice.
Couples often jointly own the family home and may own other properties such as a holiday home together. There are two ways that the property may be held – as ‘beneficial joint tenants’ or as ‘tenants in common’. If a property is held as ‘beneficial joint tenants’ it means that each person owns 100% of the property – there is no divisible share. If one dies, the other continues to own the property. A simple form is sent to the Land Registry which allows them to update their records. There will be no need for Letters of Administration provided that there are no other assets that are not jointly owned.
If the property is owned as ‘joint tenants in common’, the Deceased’s share of the property will either pass under the terms of their Will or by intestacy rules, after all their debts, taxes and expenses have been paid. Where there is no Will, Letters of Administration will be required.
Case study 1:
Claire and Ben are an unmarried cohabiting couple. They have one grown up daughter – Lisa – who is 19. Claire and Ben own their home, which is worth £100,000, as tenants in common in equal shares. Ben dies without making a Will. Claire does not have the right to apply for Letters of Administration – but Lisa does.
Claire keeps her 50% share of the property and Lisa inherits Ben’s 50% share under the rules of intestacy.
Case study 2:
Phillip and Sue are a married couple. They have a grown up child – Ellie, who is 21. Phillip and Sue own their home, which is worth £750,000, as tenants in common in equal shares. Sue also has various other savings accounts in her own name, totalling £10,000. Sue dies without making a will. Her share of the property is worth £375,000. Phillip can apply for Letters of Administration. He will inherit the first £250,000 of Sue’s estate and the balance will be split between 50/50 between Phillip and Ellie.
Whether Letters of Administration are needed or not, you’ll need to tell HMRC about the death so they can calculate if inheritance Tax is due. Some of this may need to be paid before you apply for Letters of Administration – with the final bill being calculated at a later date.
If the husband or wife inherits the whole estate (for example, because it is worth less than £250,000 or there are no children), no Inheritance Tax will be due – unless they have gifted a certain amount of property in the seven years before their death.
If Inheritance Tax is due on the estate, it is possible to make a ‘Variation’ so that the estate is treated as if there was a Will (where it makes financial sense to do so). This must be done within two years of the date of death. A Variation might reduce the amount of Inheritance or Capital Gains Tax payable, provide for someone who does not stand to inherit under the rules of intestacy or move the Deceased’s assets into a trust.
Everyone who stands to benefit under the intestacy must agree to the Variation and if there are beneficiaries under the age of 18, the Court must agree on their behalf.
Where there is property involved which has been mortgaged, the mortgage company will either ask for the mortgage to be paid off immediately, or ask for the person who has inherited the property to take over the mortgage. You will need to check and see if the Deceased had a life insurance policy, mortgage protection policy or endowment policy linked to the mortgage which could pay off the outstanding balance. If so, you will need to contact the mortgage company for a ‘Redemption Statement’.
If the property will be sold, the outstanding mortgage will be paid off from the proceeds of sale.
Joint bank accounts
If the Deceased had a joint bank or savings account, the money in the account automatically goes to the surviving owner without the need for Letters of Administration. The Bank will usually ask to see the Death Certificate before changing the account into the sole name of the survivor.
Letters of Administration may still be required if the Deceased owned other assets.
If, after the funeral has been paid for, the estate amounts to a fairly small sum of money which is held in a bank account, savings account, pensions fund or by an insurer, it may be that the holding organisation will release it to you without requiring Letters of Administration. Each organisation has their own rules.
Banks and building societies will usually provide a cheque for the funeral if given the invoice with your ID and a copy of the Death Certificate. They will also typically pay out from the Deceased’s account for Inheritance Tax and probate fees. Any other expenses would require Letters of Administration.
Using a Lawyer
Some Administrators choose to act without a Lawyer but there are many potential pitfalls. Some of the more complex scenarios include:
- Children under 18 are due to inherit under intestacy rules.
- There are children involved who were born outside of marriage.
- The Deceased owned land or property abroad.
- It is likely that someone will claim against the Estate (for ‘reasonable provision’).
- The Deceased owned a business.
These are just a few potential complications – and the difficulty is that others may not be so obvious to a non-lawyer. Legal advice is always recommended, even if you decide afterwards to apply for Letters of Administration yourself.
How long does it take to get Letters of Administration?
The length of time it takes to get Letters of Administration depends on the individual case. If the case is straightforward and there is no Inheritance Tax to pay, assuming all the forms are completed correctly, it may take as little as three to five weeks. Where there are complications, it can take a lot longer. Using a Lawyer to complete your application will speed up the process as it ensures all relevant matters have been dealt with and all forms have been correctly completed.
How to apply for Letters of Administration
If you decide to apply for Letters of Administration yourself, you need to complete several forms. These include:
- PA1 – giving basic information about the Deceased.
- The correct Inheritance Tax forms, depending on whether you believe Inheritance tax will be due or not.
You’ll also need to provide the Death Certificate and a fee. This depends how much the estate is worth – if it is over £5,000 the fee will be £215. If it is under £5,000, there is no fee. If you are on a low income, you may be able to get help with the fee. There’s also a fee to pay for each copy – current 50p.
Attending an interview
You will have to go for an interview and swear an oath at the Probate Registry where you sent your forms. You need to take all relevant documents with you – such as bank books, bills and debts – together with your own ID. Alternatively you can swear the oath at a local solicitor’s office that offers a Commissioner for Oaths service. If you want to do this, you need to ensure you write ‘solicitor’s office’ under ‘interview venue’ on the application form. This will not always be accepted.
Once you have the Letters of Administration, you will be able to distribute the estate – collecting together the Deceased person’s assets, paying off their taxes, debts and expenses, and distributing what is left according to the rules of intestacy. There are a number of steps you should take before distributing the estate, such as advertising for creditors, to ensure you do not incur any personal liability.
Letters of Administration are public documents and you should make them available to anyone who asks to see them.