At the outset
The role of the personal representative arises when someone who has died has named you in their Will as an executor. Personal representatives are also those individuals entrusted with winding up someone’s estate where there is no Will.
After someone’s death has been registered (and usually their funeral arranged) you need to identify and value all the assets and liabilities of the estate. Valuers may need to be asked to assist with valuations of shares, property, household goods and personal possessions. Our separate checklist gives guidance on this aspect.
Grant of Probate (‘the Grant’)
In most cases an HM Revenue & Customs HMRC account will need to be prepared to notify the HMRC about the extent of the estate. Once this has been done, an application to apply for the Grant can be made.
The Grant is the key to you being in a position to deal with the estate assets. Up to this point, you will generally be unable to deal with the assets except for obtaining monies to pay for the funeral account and Inheritance Tax. Since Covid, it has become more challenging to provide you with an estimate for obtaining the Grant of Probate which used to be two to four months from the executors receiving all of the deceased’s financial papers when GOV.UK organisations were consistent.
Administering the estate
You should safeguard the assets of the estate. This includes checking any buildings insurance on a property is up-to-date and checking the property is secure. You may also need to remove valuable items from the property for safekeeping.
When the Grant arrives you can make arrangements to close bank or building society accounts, deal with the property, sell and/or transfer investments and deal with any other assets.
There may be some negotiation which needs to take place with HMRC regarding valuations of property, land or a family business. We have considerable experience of assisting in such situations to achieve a successful result for clients.
The timeline for dealing with the estate administration and we will provide you with estimates accordingly once we understand the issues that lie ahead. Where there is a property, the state of the market will determine how soon it can be sold if this is the preferred route.
You may need to ensure that you have finalised all Income Tax matters for the period to the date of death and administration tax period with HMRC. This can take time to complete. There may be complex tax issues or opportunities to save tax which we can assist you with.
You should also prepare accounts which set out details of the estate and its assets and liabilities and show the beneficiaries that everything has been accounted for. We can arrange this.
When all the formalities have been complied with, it will be safe for you to distribute the estate in accordance with the Will or intestacy rules.
Should I act?
You do not have to take on the role of executor. It can be quite onerous and our lawyers can advise you of your options. There may be valid reasons for standing down particularly where there are differing viewpoints from beneficiaries. However, you cannot act and then stand down so you need to consider your position at an early stage.
Costs and expenses
Our charging rates for acting as executors are no higher than when we are asked to assist executors. However, it is necessary for us to charge for time expended in dealing with matters such as registration of death, arranging funeral etc. The charges are an expense borne by the estate. If you are an executor then you are entitled to recover your out-of-pocket expenses and it is helpful to retain receipts in support of these.
How do we help?
We take our role in this area of work seriously since there are considerable responsibilities managing assets of value or dealing with sensitive issues such as disputes among the beneficiaries. We frequently assist beneficiaries with mitigating tax liabilities as well as assisting those who benefit with their own personal affairs.
These notes are not exhaustive and are meant as a basis for discussion with your legal adviser. If clients wish to discuss any of the above, please contact our Private Client Team 020 8940 4051 who will be pleased to help you
IMPORTANT: this information is intended to be a general statement of the law. No action should be taken in reliance on it without seeking specific legal advice.
