Administering Estates – Procedures And Pitfalls

administering estates
Administering Estates – Procedures And Pitfalls

According to a recent poll, more than one in ten people who are assumed to have died intestate (without leaving a will) may really have made a will, and a comparable amount of those who leave a will that was originally thought to be their last will and testament did, in fact, write a later will.

Two of the main reasons for these findings are that many people change their minds about who should inherit their estate later in life, or they decide to prepare a will for the first time but do not inform their relatives. This can result in the will being challenged, and when there is a disputed will, the costs can quickly build up. Another reason for contentious probate is when someone makes a claim against the estate under the Inheritance (Provision for Family and Dependants) Act 1975, which allows those who were dependent on a deceased person to make a claim against the estate if they are not provided for in the will.

Dying intestate, especially if there are substantial assets, is a recipe for catastrophe, especially because the ability to plan for and limit Inheritance Tax (IHT) responsibilities is lost. The estate is distributed according to intestacy regulations, which may result in a distribution of assets that is significantly different from what the deceased individual would have chosen. For example, if the deceased’s estate is worth less than £250,000 and there are no children, the spouse will not get the entire estate. The requirement to divide an estate with offspring may necessitate an older person borrowing or selling their house in order to provide statutory inheritances for children.

When assets are involved, things can get quite difficult. The tragic intestate death of pop artist Prince is likely to entangle the family in legal wrangling for many years.

The responsibilities of the executor (or administrator of an intestate estate) are heavy and should not be taken lightly. The role of executor cannot be withdrawn once the person appointed has performed an act as such.

The duties of executors are to:

  • collect the assets of an estate and settle its liabilities, such as taxes, funeral costs and so on;
  • deal with any outstanding tax matters, including filing an IHT return and an Income Tax return if there is income during the period between death and distribution of the estate assets. Until any outstanding tax liabilities of the estate are dealt with, HM Revenue and Customs (HMRC) will not give clearance for the grant of probate to be issued.
  • obtain the grant of probate (or letters of administration if there is no will) over the estate. This is done by filing the will with the probate registry together with the ‘clearance’ letter from HMRC, and
  • carry out a distribution of the assets of the estate in accordance with the provisions of the final will or the rules of intestacy.

If executors carry out their responsibilities improperly, they can be held personally liable for the outcome, so it is crucial to ensure that the correct will is being administered and that the estate is not distributed until all liabilities have been satisfied and no additional claims are anticipated. Keeping accurate records of all transactions is also essential, as is knowing which costs can be legitimately classified as estate expenses.

One way to contest a will is to file a “caveat” with the probate registry. This precludes the granting of a probate. A caveat has a six-month duration, is renewable, and initiates a contentious court proceeding. As executors are not required to be notified that a caveat has been filed, receiving the court notice can be an unpleasant surprise.

Avatar of DLS Solicitors by DLS Solicitors
3rd October 2023
Avatar of DLS Solicitors
DLS Solicitors

Our team of professionals are based in Alderley Edge, Cheshire. We offer clear, specialist legal advice in all matters relating to Family Law, Wills, Trusts, Probate, Lasting Power of Attorney and Court of Protection.

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