Dealing with the financial affairs of someone who has died
How to deal with the property of a person who has died
Everything owned by a person who has died is known as their estate. The estate may be made up of:
- money, both cash and money in a bank or building society account. This could include money paid out on a life insurance policy
- money owed to the person who has died
- property, for example, their home
- personal possessions, for example, their car or jewellery.
If the person who died owes money to other people, for example, on a credit card, for fuel, for rent or a mortgage, this comes out of the estate.
The estate of the person who has died is usually passed to surviving relatives and friends, either according to instructions in the will, or if the person dies without leaving a will, according to certain legal rules called the rules of intestacy.
For information about wills, see Wills
For information about the rules of intestacy, see Who can inherit if there is no will - the rules of intestacy
The person dealing with the estate of the person who has died is called an executor or an administrator. An executor is someone who is named in the will as responsible for dealing with the estate. An executor may have to apply for a special legal authority before they can deal with the estate. This is called probate.
An administrator is someone who is responsible for dealing with an estate under certain circumstances, for example, if there is no will or the named executors aren't willing to act. An administrator has to apply for letters of administration before they can deal with an estate.
Although there are some exceptions, it is usually against the law for you to start sharing out the estate or to get money from the estate, until you have probate or letters of administration.
What does the executor or administrator do
The executor or administrator (also called the personal representative) takes responsibility for dealing with all of the estate. This involves:
- finding all the financial documentation belonging to the person who died
- sending a copy of the death certificate to the organisations that hold the money of the person who has died. Ask them for confirmation of the value of the money held at the date of death and the amount of income received during the last tax year up to the date of death. Also ask them to freeze the bank accounts so no one can take money out without the correct legal authority
- opening a bank account on behalf of the estate
- finding out details of money owed to the estate
- finding out details of money owed by the person who has died
- preparing a detailed list of the property, money and possessions and debts in the estate
- working out the amount of inheritance tax due and arranging to pay it
- preparing and sending off the documents required by the probate registry and HM Revenue and Customs
- when probate or letters of administration has been granted, collecting in money belonging to the estate from banks, insurance companies, pension funds and building societies
- paying debts, expenses and fees, such as solicitors' fees and probate fees
- sharing out the estate, as set out in the will or according to the rules of intestacy.
If it appears that there are not enough assets in the estate to cover outstanding tax, expenses, bills and other liabilities, you should seek the advice of a solicitor. Administering an insolvent estate can be complicated.
Tax and benefits
When someone dies, it's important to sort out their benefits, tax and National Insurance as soon as possible. There may be tax to pay, or their estate might be owed some tax back.
You need to tell the tax office, and each government office that was paying benefits to the person who has died, about their death. You need to do this as soon as possible after the death. For more information about who to notify, see nidrect.
For more information about the documents and information you will need to help you notify the relevant organisations, see nidirect.
If you need to report the death to the Department for Communities (DfC) you can telephone the DfC Bereavement Service. They can deal with all the DfC benefits that were being paid to the person who died. They can also check whether the next of kin is entitled to any benefits.
The person who has died may have left debts, for example, an overdraft on their account or a credit agreement that has not been paid off. When someone dies you should always try to tell all their creditors. For more information about how to notify potential creditors, see nidirect.
In general, if there is not enough money in the estate of the person who has died to pay their debts their creditors cannot recover the amount still owed from anyone else, including that person's surviving relatives. You should check whether that person had any kind of insurance policy that would pay off any of their debts on their death, for example, a payment protection insurance policy taken out at the same time as a loan.
In some cases the debt may have been a joint one, for example, an overdraft on a joint account or an amount owed on a credit agreement taken out in joint names. If this is the case, the debt can still be recovered from the surviving person. In addition, if you lived with someone who has died you may still be liable for debts that relate to the property, such as rates.
For more information on how different debts such as mortgages, rent arrears, fuel bills and personal loans are paid off, see nidirect.
If you are named in someone's will as an executor, you may have to apply for probate. This is a legal document which gives you the authority to share out the estate of the person who has died according to the instructions in the will. You do not always need probate to be able to deal with the estate
If you have been named in a will as an executor, you don't have to act if you don't want to.
In some circumstances, someone who wants to deal with the estate of someone who has died will have to apply for letters of administration, rather than probate. This person is called an administrator. You have to apply for letters of administration if:
- there is no will
- a will is not valid
- there are no executors named in the will
- the executors cannot or are unwilling to act.
There are strict rules about who can be an administrator. If there is a valid will, you can apply for letters of administration if:
- the person who died left all of their estate to you in the will, and
- the executors are not named, or cannot or are unwilling to act.
If there is no valid will, and you are the next-of-kin, you can apply to be an administrator in the following order of priority:
- you are the married partner or civil partner of the person who has died
- you are the child of the person who has died
- you are the grandchild of the person who has died
- you are the parent of the person who has died
- you are the brother or sister of the person who has died
- you are the nephew or niece of the person who has died
- you are another relative of the person who has died.
An unmarried partner, or same-sex partner who has not registered a civil partnership and who has not been named in a will as an executor will not usually be able to act as an administrator.
You do not always need letters of administration to be able to deal with the estate of someone who has died.
You usually need probate or letters of administration to deal with an estate if it includes property such as a flat or a house. Otherwise, you may not need probate or letters of administration if:
- the estate is just made up of cash (that is, bank notes and coins) and personal possessions such as a car, furniture, and jewellery
- all the property in the estate is owned as beneficial joint tenants. This property automatically becomes wholly owned by the other owner
- you had a joint bank account
- the amount of money is small (usually £10,000 or less).
- you discover that the estate is insolvent, that is, there is not enough money in the estate to pay all the debts, taxes and expenses
- there are certain life insurance policies and pension benefits in the estate.
Couples may jointly own their home. There are two different ways of jointly owning a home. These are beneficial joint tenancies and tenancies in common.
If the partners were beneficial joint tenants at the time of the death, the surviving partner will automatically inherit the other partner's share of the property. There is no need for probate or letters of administration unless there are other assets that are not jointly owned. The property might have a mortgage.
However, if the partners are tenants in common, the surviving partner does not automatically inherit the other person's share. Probate or letters of administration will be needed so the personal representative can pass it to whoever will inherit the share of the property, according to the will or the rules of intestacy. The property might have a mortgage.
Example: Margaret and Robert are not married. They have one grown-up daughter called Ruth. Margaret and Robert own their home as tenants in common. Margaret dies without leaving a will. Robert doesn't have the right to apply for letters of administration but Ruth does. She inherits the half share of the home under the rules of intestacy. Robert keeps his half share.
For more information about beneficial joint tenancies and tenancies in common, see Buying with someone else, in Buying a home.
If the property is to be inherited by someone and there is still an outstanding mortgage on it, the mortgage company will either require the mortgage to be paid immediately, or ask the person who inherits the property to take over the mortgage.
If there is a mortgage on the property, there might be a life insurance policy, an endowment policy, or mortgage protection policy which will pay the outstanding mortgage if the person with the mortgage dies. In this case, you should write to the company, asking for a final statement.
If the property is to be sold, the mortgage will be paid out of the sale of the property.
Couples may also have joint bank or building society accounts. If one dies, all the money will go to the surviving partner without the need for probate or letters of administration. The bank may need to see the death certificate in order to transfer the money to the other joint owner.
Probate or letters of administration may still be needed if there are other assets that are not jointly owned.
The estate may be made up of a relatively small amount of money held:
- in a bank or building society account
- in a pension fund
- by an insurance company.
If, after the funeral expenses have been paid, the amount of money held by the organisation is under a certain amount, they might be prepared to release it to you without you having to apply for probate or letters of administration. This amount may vary from one organisation to another, so you will need to check with each one.
Some banks and building societies will release quite large amounts without the need for probate or letters of administration. Also some banks and building societies will release money needed to pay for a funeral, probate fees and inheritance tax but nothing else until you have been granted probate or letters of administration.
This depends entirely on the policy of the organisation in question. They do not have to release anything, however small the amount of money. If the organisation refuses to release money without probate or letters of administration, you must apply for probate or letters of administration even if it is not otherwise needed. If the organisation does release money without probate or letters of administration, you may have to sign an indemnity to protect the organisation if it later turns out money has been paid to the wrong person.
For more information on dealing with small estates and debt see nidirect.
Do you need a solicitor
Many executors and administrators act without a solicitor.
You do not have to use a solicitor to apply for probate or letters of administration so long as the deceased was living in Northern Ireland and they
- left a valid will and you are the executor of that will; or
- did not leave a valid will but you are next of kin and resident in the United Kingdom
For more information about applying for probate, see nidirect.
However, if the estate is complicated, it is best to get legal advice. You should always get legal advice if, for example:
- the terms of a will are not clear
- part of the estate is to pass to children under the age of 18
- the person who died has left money or property in a trust
- the person who died owned land or property abroad
- the person who died owned a business
- anyone is likely to dispute the will.
The legal fees can be paid from the estate.
If there are any problems with the way that executors or administrators deal with the estate, for example, if there is unreasonable delay or if the executors or administrators misuse their legal powers, you will need legal advice.
For more information about getting legal advice, see Using a legal adviser.
How long does it take to get probate or letters of administration
The time it takes to get probate or letters of administration varies according to the circumstances. It may only take three to five weeks if there are no complications, inheritance tax is not payable, the estate is straightforward and all forms are filled in properly. However, in more complicated cases, it may take much longer.
Before applying for probate or letters of administration, you should deal with inheritance tax.
You can obtain the forms and further advice by telephoning the HMRC Probate and Inheritance Tax Helpline on 0300 123 1072 or at www.gov.uk. You should tell them that the deceased lived in Northern Ireland as procedures for getting a grant vary between different parts of the UK.
To get a grant of probate or letters of administration, you will have to go for an interview at a probate registry, taking with you some required documents and you will be asked to confirm the details of your application and sign the probate forms. For more information on applying for probate, see nidirect.
If the deceased lived in Counties Londonderry, Tyrone or Fermanagh you can make an appointment with the Belfast or Londonderry office but if the deceased lived in Counties Antrim, Down or Armagh you must use the Belfast office. Contact details for both offices can be found at www.courtsni.gov.uk. You can download an appointment request form at www.courtsni.gov.uk .
You will need to bring the following documents with you to the interview:
- Some form of photo ID for yourself (driver’s licence, passport or Translink Smartpass)
- the original will (a copy is not acceptable). No-one should write on the original will or attach staples or paperclips to it.
- a certified copy of the death certificate
- a copy of the marriage certificate if there is no will and the deceased was married
- a copy of the decree absolute if there is no will and the deceased was divorced
- the inheritance tax forms
- the probate fee. For more information about the probate fee, see nidirect.
Make sure you keep copies of the forms and anything else you have had to send with the forms.
At the appointment, a member of staff from the Probate Office will inspect the documents and prepare the probate forms. You will make an oath or affirmation that all the details in your application are true and correct and you will then sign the probate forms. If the Probate office is not satisfied with the documents you have brought, your personal application cannot proceed and you will have to instruct a solicitor.
For more information about applying for probate or grant of letters, see www.courtsni.gov.uk .
The probate fee
The fee for applying for probate or letters of administration depends on the value of the estate. There is no fee where the value of the estate is less than £10,000. There will be a fee where the value of the estate is more than £10,000.
You can apply to pay a reduced fee, or no fee, if you are on a low income or face financial hardship. You can find out more about probate fees at nidirect.
Whether or not probate or letters of administration is needed, you have to inform HM Revenue and Customs (HMRC) of the death, in case inheritance tax is payable.
Inheritance tax may have to be paid on the value of the estate. You can find out more about when Inheritance Tax is payable at www.gov.uk. There are some exceptions to this rule, for example, if the husband, wife or civil partner inherits the estate.
The tax form you need to complete depends on whether or not inheritance tax is payable on the estate. You can find out more about when Inheritance Tax is payable at www.gov.uk.
If inheritance tax has to be paid, some of the tax must be paid before probate or letters of administration is granted. Once probate or letters of administration has been granted, the final tax bill will be sorted out.
For more about inheritance tax, see Inheritance tax.
After probate or letters of administration has been granted
After the interview, you will get a letter saying how much inheritance tax is still left to pay.
Once this has been paid, probate or letters of administration will be sent to you in the post. It includes details of the gross and net estate, that is, the value of the estate before and after debts have been deducted. A photocopy of the will, stamped to prove it is an official copy, is also sent. Both the probate/letters of administration and the will are public documents and can be examined by anyone who wants to see them.
Once you have got probate or letters of administration, you can begin to deal with the estate and share out the property.
Even if you have been named as an executor in someone's will, you may not wish to, or be able to, act. You can appoint someone else to apply for probate on your behalf.
You may not want to appoint someone else to act for you. You can still refuse to act, as long as the person who made the will has died and you have not already started to deal with the estate. This is called renouncing. You can only renounce your role as an executor if you have not carried out any duties of an executor e.g. notifying a bank of the death. Arranging the funeral is not counted as part of the duties of an executor for these purposes.
To renounce, you fill in a form, called a form of renunciation. You can buy this form from a specialist legal stationers such as Oyez. You can order forms from their website at: www.oyezformslink.co.uk. You then file the form at a probate registry, together with the will.
This means that someone else could then apply for letters of administration.
The nidirect website has a useful checklist of what to do when someone dies. You can find this online at www.nidirect.gov.uk.
The Northern Ireland Courts and Tribunals Service produces a useful guide for people who are applying for probate or letters of administration. It is called Dealing with a deceased person’s estate – an information booklet for personal applicants. You can find the leaflet online at www.courtsni.gov.uk .
Cruse Bereavement Care supports people who are bereaved and produces useful information and advice. Go to their website at www.cruse.org.uk.
Age UK has produced a useful booklet on How to be an Executor which is available online at www.ageuk.org.uk .