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Dealing with an estate

If you’ve been asked to sort out the estate of a person who has died, here is some guidance on getting started. It includes the main things you’ll need to take care of and where to get further information on joint property, pensions and tax. For more, see our information on Wills, probate and inheritance.

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Your role as executor or administrator

You may be the sole executor or administrator, or there may be more of you. You don’t all have to take an active part in sorting out the estate, and can instead have ‘power reserved’ to you to act as executor or administrator at a later date.

There’s usually nothing complicated about being an executor but it can be time consuming. You can claim any reasonable out of pocket expenses you incur from the estate. You can’t charge for your time, unless the Will gives permission for this.

You can handle the whole job yourself or you may decide to pass some or all of it to a solicitor. The estate pays the solicitor’s fees.

Your role as executor or administrator is to:

  • trace everything the person who died owned (assets). This may include: bank accounts, savings and investments, property, cars, jewellery, other valuables, furniture, personal possessions, and debts owed to the person who died – for example, overpaid tax
  • trace every debt the person who died had (liabilities). This will include any mortgage, personal loans, credit card balances, unpaid household bills, unpaid income tax, and so on
  • create an accounts file for the estate. List all the assets and then take off all the liabilities and reasonable funeral expenses, to work out the total value of the estate
  • complete an inheritance tax form and pay any inheritance tax due. The tax must be paid before probate can be granted. The tax due on property can be paid in instalments
  • apply for probate or letters of administration (called confirmation in Scotland). This is a formal process to recognise the validity of the Will (if there is one) and to confirm your power to distribute the estate as directed by the Will or the intestacy laws
  • take control of the assets (using the grant of probate or confirmation)
  • pay the debts of the estate. These are normally paid from the estate
  • trace all the people, charities and other organisations that are to inherit (called the beneficiaries) and distribute their inheritances to them

Words you may hear

Will

This is a legally-binding document which explains what the person who died wanted done with their assets and possessions. It should also include details of who should sort out their affairs after death. These people are called the executors.

Probate

This is the process of proving the Will is valid and sorting out the person’s estate according to their last wishes. This is usually done by a lawyer and or the executors (or administrators, if there’s no Will).

Inheritance

This is when someone receives money, property or another personal possession from the person who has died. This can either happen when they’re mentioned in the Will (in this case it’s also called a legacy), or because the person who died didn’t make a Will and they’re the next closest relative.

Intestacy

This is when someone dies without making a valid Will – it’s also called dying intestate. The estate will still need to be sorted out and the person who takes on this task is called the administrator. Usually this will be the next of kin.

Deceased (the)

This is how the person who has died will be described in most legal documents.

Getting started

Here are some suggestions to make your job easier:

  • The government guide What to do after a death lists all the steps you will need to take, where to get help, and a list of who needs to be told about the death. There are versions available for England and Wales   (pdf), Scotland   and Northern Ireland  .
  • If you haven’t already, order multiple copies of the death certificate. You’ll need to tell every organisation that the person who died had dealings with about the death. Most will needto see an original death certificate. It speeds up the process if you can send out several certificates at the same time. Multiple copies can be provided later, but it’s cheaper to order them whenthe death is first registered.
  • Open an executor’s bank account. Normally, assets won’t be released to you until you have applied for a grant of probate or letters of administration (called confirmation in Scotland) from the probate court.

Find your local probate court or tribunal on the GOV.uk   site. In Northern Ireland, see nidirect.co.uk  . Applying for a grant of probate is a formal process to recognise the validity of the Will (if there is one) and to confirm your power to distribute the estate. But some money, such as a tax refund and pensions owed, may be available to the estate before then. You’ll also have expenses eg for certificates and postage. You’ll have to pay any inheritance tax   due before the assets are released. You may need to ask your bank for an overdraft to cover these costs in the meantime, or you may be able to make a loan to the estate.

If the person who has died had a bank account, the bank will usually allow funeral expenses and any inheritance tax that may be due to be paid from their account before you get a grant of probate or letters of administration. Talk to the bank about how to arrange this.

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Professional help

Even if you’ve decided to take on the role of executor or administrator without a solicitor, you may still want advice on a particular aspect of sorting out the estate.

Find a solicitor

Citizens Advice Bureau – to find your local branch

If the task starts to become too complicated, you can always change your mind and hire a solicitor to take over. The solicitor’s fees are paid from the estate.

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Dealing with benefits, pensions and life insurance

If the person who died had been receiving a state pension or other benefits, you will need to let the Department for Work and Pensions (DWP) Bereavement Service   know.

In Northern Ireland, contact the Social Security Agency  . These services will pay any pension or benefits owed, stop future payments and advise on whether any surviving family are now eligible for benefits themselves.

If the person who died belonged to a workplace pension scheme or personal scheme, you need to contact each pension provider. This is so that:

  • any amount outstanding can be paid to any beneficiary nominated by the person who died or their estate
  • any future pension payments stopped
  • arrangements made for the payment of any lump sum or survivors’ pensions. If you’re having problems tracking down these pension schemes, the Pension Tracing Service   may be able to help.

If you find any life insurance policies, contact the insurance company for guidance on how to make a claim.

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Dealing with tax matters

The person probably died part-way through a tax year (which runs from 6 April to the following 5 April), so you’ll need to finalise their tax affairs for the year. HM Revenue & Customs   (HMRC) should have been informed about the death by the registrar and will normally contact you within six weeks to tell you what to do.

You may have to complete a tax return detailing all the sources of income of the person who died and claiming any tax relief. If they were self-employed, there may be some outstanding National Insurance to pay.

There might also be some capital gains tax due. This is a tax on the increase in value of an item during the time a person has owned it. However, nearly everyone is entitled to £11,000 in profits each year (in 2014-15) before the tax applies.

The estate is not liable for capital gains tax on the person’s property or belongings which made gains before their death.

For example, suppose the person who died had bought a holiday home for £45,000 and it was worth £100,000 by the date of death. There would be no capital gains tax on the £55,000 gain and whoever the property was passed on to would inherit it at a value of £100,000.

You can find out more about capital gains tax   on the HMRC website.

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Tax and the estate

Don’t confuse sorting out the person’s tax affairs with tax on the estate. Quite separately, but later on, you’ll need to deal with:

  • Income tax on the estate if, for example, savings and investments have earned income between the date of death and the inheritance being paid out.
  • Capital gains tax on the estate if in your role as executor (administrator) you sell assets that have risen in value between the date of death and the date the assets are sold.
  • Inheritance tax on the estate if it’s large enough (see the section Wills, probate and inheritance for more information).

As an executor of the estate, you may be held responsible by law if the estate is distributed before the person’s tax affairs are settled. If a refund was due to them from HMRC, you might also have to repay the loss to the estate yourself.

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Jointly owned assets

In general you pass on the estate according to the instructions in the Will or the intestacy rules if there is no Will. However, this may be overridden where assets were jointly owned.

For example, there are two ways that an asset (which may be property but could be another type of asset) can be owned jointly with someone else:

  • As tenants in common (called common owners in Scotland). Each owner has their own distinct share of the asset (which doesn’t have to be equal). The share owned by the person who died is passed on according to the terms of the Will or intestacy rules.
  • As joint tenants (called joint owners in Scotland). Each owner has equal rights to the asset and there are no distinct shares. When one owner dies, their share automatically passes to the remaining owner(s) without becoming part of the estate. This puts it outside the scope of the Will or intestacy rules. However, the value of the deceased’s share of the asset (all interests are taken to be held in equal proportions for this purpose) must still be included in the valuation of the estate for inheritance tax purposes.

For each joint asset, you will need to check which type of ownership applies. Joint bank accounts are usually owned as joint tenants, except in Scotland.

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External websites

Citizens Advice Bureau England   – death and wills

Citizens Advice Bureau Scotland   – death and wills 

Citizens Advice Bureau Northern Ireland   – death and wills

Citizens Advice Bureau Wales   – death and wills

Court tribunal finder   – find your local probate court or tribunal in England, Scotland and Wales

GOV.uk   - Pension Tracing Service

HMRC   – capital gains tax

HMRC   – inheritance tax

Find a solicitor   – England and Wales

Find a solicitor   - Scotland

Find a solicitor   - Northern Ireland

Scottish Courts   – Small estates

GOV.uk   – what to do after a death (England and Wales)

GOV.uk   – what to do after a death (Scotland) 

NI Direct   – what to do when someone dies

NI Direct   – applying for probate in Northern Ireland


This content is provided for general information purposes only. It's not medical, financial, legal or personal advice. We suggest that you consult with a qualified professional about your individual circumstances. How our information is created and how it's used.

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