How do I manage the money when someone dies?
When someone dies, their money and possessions have to be sorted out. If they had a Will, there will be named Executors who take this on.
If they did not have a Will, then usually the next of kin is the person responsible.
These people are legally allowed to manage the ‘estate’, and are known as the Personal Representatives (PRs).
Part of the job of the PRs is to collect in all the money and possessions belonging to the person who died. Then they must work out the value, pay off debts, and give out what’s left based on what the Will says. If there is no Will, then they will follow the Rules of Intestacy.
PRs can instruct Bicester Wills and Probate to manage some or all of this process for them. Sometimes the PRs are worried about getting caught up in family disputes because of the terms of the Will or Rules of Intestacy. Sometimes it is simply because the financial side of the process can seem a bit daunting.
One of the most important documents in this process is the Estate Accounts. We set them up at the very start. They list all the money and the value of all the possessions, all the debts that must be paid, and all the gifts that are to be made to loved ones out of what is left.
Estate Accounts can cause a great deal of worry and stress for the lay PRs whereas we are experienced and efficient as this is part of our day to day work.
Completing the Estate Accounts involves:
- Identifying, listing, obtaining valuations for the assets of the estate;
- Completing and submitting the Probate and Inheritance Tax paperwork;
- Maintaining a capital account to record details of changes to the initial valuations (eg. property may sell for more than the valuation);
- Maintaining an income account to record details of income generated/received by the estate post death (eg. on shares);
- Maintaining an administration account listing any expenses incurred in the administration of the estate (eg. Probate fees, professional fees);
- Gathering in the assets and providing receipts;
- Identifying, listing and discharging the debts owed by the estate;
- Calculating and accounting for any Capital Gains Tax;
- Calculating and accounting for any Income Tax;
- Calculating and accounting for any Inheritance Tax;
- Maintaining a beneficiary account and obtaining receipts for all gifts paid out under the terms of the Will or the Rules of Intestacy.