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Dealing with the financial affairs of someone who has died

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Dealing with the financial affairs of someone who has died

People often have multiple assets, policies and debts that need to be dealt with when someone dies. In the majority of instances, people do not have a file or comprehensive list of these assets making handling financial affairs quite a time consuming process for the executors. However, it is important that these assets are dealt with appropriately. Everything that a person owns is called their estate and it is this that the executors must handle once they have a Grant of Probate or a letter of administration.

The estate will be distributed according to the person’s Will or according to the rules of intestacy (if they die without making a Will). In order to understand and have a comprehensive knowledge of the estate the following assets need evaluation:

  1. There may be some money and cash at the person’s home - this forms part of the estate
  2. Did they have any premium bonds?
  3. They may have also held shares, you will need to look for the share certificates
  4. You will need to find out where the deceased person banked, which includes banks, online banks and building societies
  5. In some instances people lend money to others, this may need to be collected
  6. Specific possessions such as furniture, jewellery, cars, boats, motorbikes
  7. Other properties
  8. Insurance policies

Each of these organisations will need to be contacted and they will need to see the death certificate. You will need to ask for details of the value of each specific asset. In the case of some assets for example pensions or shares, income may have been received in the last year and you will also need to ask for the details of this. Bank accounts and building societies also need to be frozen. The first stage is to establish the value. Once you have the death certificate it can be helpful to use the government Tell Us Once service which notifies government organisations such as the Department for Work and Pensions, the Passport Office, the DVLA etc of the death and will stop any further benefits being received. 

Where property is concerned it may be jointly occupied. There are two types of tenancy and their treatment is different. The two types are beneficial joint tenancies and tenancies in common. If the partners were beneficial joint tenants when the person passed away, the surviving partner will automatically inherit their partner’s share of the property. However, with tenants in common the property does not automatically pass to the surviving partner and it will form part of the estate and will need to pass to the beneficiary as defined in the Will or under the rules of intestacy.

Where possessions are specified in the Will to pass to a beneficiary they will be distributed accordingly otherwise they will need to be sold.

Once the asset information is gathered in it is a good idea to make a summary of it. You will also need to find out what money the person owes for example, mortgages, car loans, credit cards etc. this can also be recorded in the summary.

Any secured debts such as a mortgage or some loans will need to be paid after funeral and testamentary expenses.  Any inheritance tax due on the estate will need to be calculated and the relevant HMRC form completed (there are 2 different forms depending on the level of tax due).  Once a receipt has been obtained from HMRC for the payment and the Grant of Probate or grant of letter of administrations has been received it is then possible to request the asset transfer into the newly created Executors account to receive the value of the assets into.

After debts and tax is paid the estate can then be distributed. If you need help or advice in relation to handling a the financial affairs of an estate call us today on 0161 696 6229 or complete our online enquiry form and a member of the team will contact you to discuss your requirements.

Our legal experts can also assist with related areas including making a Will or Lasting Power of Attorney.