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When someone dies, their estate must be correctly administered – their money, property, possessions and debts. Any failure to administer a family member's estate correctly may result in a personal liability for the administrator or executor, even though they have acted in good faith throughout.
If the deceased made a Will, this will explain what will happen to their estate. The Will should set out name name/s of the executors – these are the people who will sort out the estate. Often this is best left to a professional firm such as Agreements Limited.
Executors must apply for a Grant of Representation at the local Probate Registry to give them the legal right to administer the estate. The right to deal with the estate is known as ‘probate’.
However if the deceased did not leave a will, or the will is invalid or doesn’t specify the executors, the estate must then be dealt with by an administrator. They will need to apply for ‘letters of administration’ at the local Probate Registry. Again this is best left to a professional firm such as Agreements Limited.
Where there is no Will, the Rules of Intestacy sets out who will inherit the estate:
Inheritance Tax may have to be paid on the estate if it’s over a certain amount. The current threshold is £325,000. Anything over that threshold is taxed at a whopping 40%!
Most estates are valued at below the £325,000 limit so there would not be any Inheritance Tax to pay in those cases. There is also no Inheritance Tax to pay on estates left to a spouse or civil partner, or to charity.
However if the deceased had a spouse or civil partner who died before them, their threshold could be worth up to £650,000 (twice the current threshold).