Losing a loved one is one of the hardest things someone can go through, not made much easier by the fact that there is now work to do. The deceased has left a life behind, and the financial side of that life needs dealt with. Homes need emptied, assets split, debts paid, etc. It’s rarely fun, it’s likely to be stressful, but it has to be done. To make things easier, take a look at our guide to see what is involved in winding up an estate.
Is there anything I have to do?
If you are not the executer but you are next of kin, such as in the instance that a solicitor is appointed as executer, there are a few practical things you need to do that aren’t the business of the solicitor. For example, you should be making plans for the funeral, sorting through, and splitting the belongings and property of the deceased.
What makes up an estate?
Everything and anything that is owned by a person is considered their estate, so that includes: money, whether cash or in a bank or life insurance policy, money owed to the deceased, shares and investments, property, like their home or land, and personal belongings like cars, jewellery, and the contents of their home.
If money is owed from the deceased, this will come out of the estate, including credit card debt, fuel bills, rent and mortgage payments.
What do I have to do first?
Your first move is to check if there is a will. There might be requests for end-of-life care or funeral plans, which makes it important to seek out before the funeral, but ultimately a will should detail what should be done with the lost ones’ estate and belongings.
Usually some of these first steps are laid out for you by the will, like who they want the executor to be and details of what to do with the estate and how to otherwise split it. Make sure to make a few copies so that, if you are the executer, you can prove it.
Modern wills have been updated to include money and possessions including property, savings, pensions, insurance policies, etc. but also digital assets. Social media account logins should be detailed if you want to allow access, but also access to music, photographs, online gaming accounts, etc.
If there is no will, contact the Scottish or UK Government or Citizens Advice Bureau for details on next steps.
Who deals with an estate?
An executer is someone who ‘executes’ the acts of the will. Typically, they are named in the will and usually come under the categories of a solicitor, bank, a member of the family, or a friend of the victim. There can be more than one executer, which means they will have to agree about the finer details of dealing with the estate. If they don’t a court might have to get involved if some requests by the will or a disagreement over the finer details of the plans of the will are disputed between the executers.
It’s advised to appoint more than one executer in case one of them isn’t available to do the work, for example if one of them dies. There can be up to four appointed to the job. As mentioned, social media is a common modern-day worry, so you can appoint someone to be your social media executer, to wipe your private conversations or obtain your online property, for example.
What do they do?
An executer has four main jobs: they are in charge of valuing the property and possessions of the deceased, paying any debts due from the estate, paying inheritance tax, and applying for confirmation.
You can find a detailed guidance on the HMRC website for applying for confirmation, which makes up an inventory list of possessions in the property. A small estate is considered anything less than £36,000 or less and will amount to a fairly quick confirmation. You might need to get legal help if the estate is worth more than £36,000 as it is a more involved. Make sure to look at all financial assets, including: bank accounts, cars, personal belongings, season tickets and rail cards, cash, employee benefits, foreign assets, gifts granted to others, investments, insurances, life insurance policies, national savings, state and private pensions, premium bonds, property, social security benefits, subscriptions and TV licenses.
Paying any debts involves looking at their credit agreements, their council tax, their electric and gas bills, the state of their mortgage, rent or factors fees, store cards or shop accounts, and their telephone and mobile use. Write to as many organisations as you can, letting them know about the death and for final balances on any accounts, but make sure you also ask for evidence of why it’s due.
For more advice on winding up your estate, get in touch today.