Estate administration - advice for personal representatives on the different processes and regulations involved in estate administration
Estate accounts are a complete financial summary of the estate (see ‘Estate accounts’ for a list of information to include). One of the duties of a personal representative is to produce a clear and accurate copy of the estate accounts. This will need to be provided to the beneficiaries in order to obtain their consent to the estate being distributed, and can also be requested by a beneficiary at any point during the estate administration. For more information about the importance of these documents, please see our 'Estate accounts' page.
When dealing with the terms of a will, it is important for personal representatives to be aware that there are several different methods by which assets can be transferred, each of which needs to be dealt with differently.
The most common ways to leave assets in a will is through specific gifts of a particular asset or item, pecuniary legacies of a set amount of money, or gifts which are held on trust until the occurrence of certain events. The differences between these forms of gift are important, as they impact the inheritance tax which will be liable, as well as what happens if gifts fail – either because they are too imprecise, or because the object of the gift no longer exists.
For more information on the different types of gifts and legacies, as well as the rules regulating them, please see our ‘Gifts and legacies’ page.
In the context of probate, beneficiaries are the persons entitled to inherit the estate under the terms of the will, or under the rules of intestacy if the deceased left no valid will or a will that did not fully deal with the estate.
It is the responsibility of the personal representatives to correctly identify any beneficiaries who are entitled to an inheritance from the estate of the deceased. While often this process will straightforward, it can be complicated if the will specifies a group of beneficiaries (e.g. ‘my children’), a charity, or a minor as a beneficiary.
Personal representatives must take particular care if any of the beneficiaries are insolvent. In this case, there is a risk of personal liability for the personal representatives if they make a payment to a beneficiary who doesn’t pass the money along to the trustee in bankruptcy.
For more information on all of these possibilities, please see our ‘Beneficiaries’ page.
Distributing the estate to the beneficiaries carries some risk for the personal representatives. If the estate is distributed to the wrong people, or in the wrong order, personal representatives can be personally liable. Fortunately, there are a large number of different checks and precautions which can be taken in order to help mitigate this risk, as detailed on our ‘Distribution of the estate’ page.
As soon as the personal representatives have obtained the grant of probate or letters of administration (see ‘Applying for probate’ for more information) they can complete either the sale or transfer of the deceased’s property. Before sale or transfer there are important checks to ensure there is no reason the sale cannot take place. The most common obstacles are mortgages or other joint owners, but personal representatives will also need to confirm that any inheritance tax or capital gains tax which may arise can be covered by the estate. If these charges are not paid, the personal representative may be personally liable. A fuller list of potential liabilities and how to protect personal representatives against them is available on our ‘Probate liabilities’ page.
For more information, please see our ‘Property sales and transfer’ page.
A Deed of variation is a mechanism which can be used to alter a will or the rules of intestacy to change who receives the estate or how much the beneficiaries will receive. Variations can only be done with the consent of the original beneficiary of the estate, but can be used in order to make the will more inheritance tax efficient.
Variations can also be used to convert a joint tenancy into a tenancy in common after the death of one of the joint tenants (see ‘Joint ownership’ for more information on joint tenancy). Once again, this process is most commonly used where it would have been more appropriate for inheritance tax reasons for the property to pass someone other than the other joint tenants.
For more information on either of these processes, please see our ‘Variations’ page.
Information for the purposes of completing probate, and guidance for personal representatives
Explanations of the different kinds of gifts and legacies which can be left under a will, and their different legal consequences
Information on estate accounts, including examples and the benefits of preparing estate accounts
Guidance on who the beneficiaries are under a will, and the checks which needs to be made before the estate can be distributed to them.
Guidance for personal representatives on the steps necessary to distribute the estate
Understand how to use a deed of variation to alter the distribution of the estate during probate
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