Settling an estate – what do I need to know?

Red house and two green houses from Monopoly board game Settling an estate


MoneyPlus Features Team

24th November 2015 at 9:46am

As part of our short series on capital taxes, we recently discussed the impact of Inheritance Tax. As a direct follow on to this, we thought it would prove helpful to take a broader look at what’s involved in dealing with an estate when a loved one passes away. It’s a complex area and we can’t hope to cover off every situation, however, we can highlight where you can find useful information to help you.

What do I need to do?

Once the initial shock passes, there are practical things that need to be done. The first is to arrange for a death certificate at your local registrar’s office. This will then allow you to sort out the funeral arrangements. Funerals can be costly but the key point to remember is that the costs of a funeral are a debt on the estate. So banks and building societies can advance money from a deceased’s account to cover the funeral director’s bill.

Find the Will

You should also check if they have left a Will, this will detail the deceased’s wishes, who they have appointed as executor (the person who has responsibility to deal with the estate) and how they want their assets divided up. If there is no Will, the estate will be dealt with under what is called the intestacy rules and an administrator will need to be appointed. This explains more about how the duties of an executor or administrator work

Tackle the practical

Later there will be other practical tasks such as sorting out personal possessions and looking through papers. If considering what to do with possessions that you don’t want to keep, it may be worth checking whether the deceased’s Will mentions any particular charity.

The legal right

If you’re taking responsibility for dealing with an estate, either as an executor or as administrator, you need to apply to get the legal right to deal with the deceased’s affairs. The type of legal document you need to apply for will depend on where the deceased lived within the UK and whether a Will was made or not. Without this formal document, you won’t be able to deal with banks, building societies, insurance companies, etc. The next step is to list all the assets and liabilities – you can use the relevant form from this page to aid you in what you need to find out and from who.

Once you have the legal right to deal with the estate, you can start to gather in the assets and deal with any liabilities. Only once all debts have been paid including inheritance tax, can you then distribute whatever is left – you will either be following the details in the Will or the rules of intestacy if there is no Will.

Where can I get help if I need it?

As we’ve highlighted above the GOV.UK website is a great source of information and help. You’ll be able to find the right Inheritance Tax and probate forms on there, clear explanations of the steps you need to follow and details on who to contact if you need guidance.

And if you do need to speak to someone about tax issues, you can call the Deceased Estate Helpline on 0300 123 1072 – they will help with what forms you might need and how to fill them out.

Should you need further assistance sorting out the tax of someone who’s died we’d recommend enlisting the help of a family member, accountant or lawyer. There will be costs involved when getting a professional on board, so if the estate can’t cover those extra costs and you’re on a low income, you can find contact details of charities and organisations that may be able to help you on the GOV.UK website too.

Time and planning

Losing a loved one is difficult, and dealing with the ramifications can often be complex, but through careful planning and using the help that is at hand, it can be made easier.

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The information in this blog or any response to comments should not be regarded as financial advice. Pensions are investments and their value can go up or down and may be worth less than you paid in. Laws and tax rules may change in the future. The information here is based on our understanding in November 2015. Your personal circumstances also have an impact on tax treatment.