If a loved one has made you an Executor of their estate, or they died without a Will and you are entitled to administer the estate, having a helping hand to deal with the legal formalities can be a great relief at an already very difficult time. We can assist with both obtaining the Grant of Representation and full administration of the estate.
If you are not sure whether you are entitled to administer the estate, get in touch and we will advise.
Why do I need a Grant of Representation?
The Grant of Representation proves that those dealing with the Deceased’s estate have the authority to do so. It allows the Deceased’s Personal Representatives to:
- Collect in the Deceased’s assets.
- Pay the Deceased’s liabilities.
- Distribute the balance either according to the Will, or according to the rules of ‘intestacy’ if there was no Will.
Some assets can be administered without a grant, but the majority of institutions will not release assets to the Personal Representatives until they have seen proof of entitlement first. In all but the smallest and simplest estates, a grant will be required.
The grant is usually referred to as a ‘Grant of Probate’ although if there is no Will, Letters of Administration will be obtained instead.
What is involved in obtaining a grant of representation?
The Personal Representatives (PRs) will need to value the assets in the estate immediately before the Deceased died and report to HMRC. They will need to assess whether any Inheritance Tax is due.
The assets that must be reported to HMRC include:
- those passing under the Will (or by intestacy); and
- those that pass outside of the Will.
In addition, the PRs must report certain additional assets that attract Inheritance Tax under legislation. These include, for example, assets in which the Deceased had an ‘Interest in Possession’ (or ‘life interest’); lifetime gifts which did not fall under an exemption, and assets which the Deceased gave away before their death where they continued to enjoy a benefit.
Preparing the report for HMRC can be complex. It is not simply a matter of valuing what the Deceased owned when they died. There are various rules for making a valuation.
Additional complexities arise if the Deceased used up their inheritance tax allowances during their lifetime. This might be by:
- Gifting property to a trust or company
- Making gifts that fall outside of the Deceased’s annual gifting allowances
The Residence Nil Rate Band (RNRB) may be available to the estate and if so, this must be claimed specifically. If the Deceased downsized before their death, there are additional steps to take to secure the maximum possible amount of RNRB that may be claimed.
If the Deceased was the survivor of a married couple, the estate may be able to claim an uplift on their inheritance tax allowances, based on how much of these were used by the first-to-die.
Usually, the PRs must deliver an account to HMRC within 12 months of the end of the month in which the Deceased died. If however they deliver their report after six months, interest will be start to run.
They will then need to ensure any inheritance tax due is paid within the strict time limits – otherwise, the estate will be liable for further charges.
April King Administration of Estates Procedure
The procedure for administration of estates is as follows:
- Your lawyer will take instructions from you (or the person entitled to act as a Personal Representative).
- The Will must be located (if there is one) and provided, together with the Death Certificate.
- Information as to the Deceased’s assets and liabilities must be provided.
- Details of any gifts the Deceased made or received prior to their death must be provided.
- Your lawyer will write to the various institutions identified to obtain details of the assets held, with a valuation.
- Any other necessary valuations will be arranged.
- A schedule of assets and liabilities will be created.
- The value of the estate will be calculated for Inheritance Tax (IHT) purposes, with any exemptions and reliefs applied.
- The relevant IHT forms will be completed.
- Your lawyer will contact the PRs to approve the HMRC form.
- In most cases (besides excepted estates) the relevant form will be submitted to HMRC and any IHT due must be paid.
- HMRC will stamp Schedule 421 to evidence that the report has been delivered and IHT paid.
- Your lawyer will then draft the application for a grant of representation and send this, together with the executed Will/codicils and required copies, the stamped Schedule 421 and the correct fee (currently £155 where the application is made by a solicitor).
- The Registry will issue a grant of representation allowing the estate to be administered.
The Deceased debt’s will then be discharged and after a set period, your lawyer will be able to distribute the balance of funds to the beneficiaries.
Call us on 0800 788 0500 to book your free 1 hour appointment, without obligation.