What to do when someone dies
When a loved one dies it can seem very daunting having to deal with their affairs. “For many people it is a case of knowing who to turn to and what to do next. It can be very easy to feel overwhelmed,” says Ben Holden, Wills and Probate Solicitor at MacDonald Oates. “If you are dealing with a loved one’s affairs there are a few immediate steps that you will need to take,” explains Ben.
Register the death
First and foremost, you will need to register the death at the Register Office for births, deaths and marriages. Unless the matter has been referred to the Coroner’s Office, you will be given a medical certificate setting out the cause of death. You will then need to take this to the Registrar who will issue a death certificate – it is usually advisable to get a number of copies. You can find your local register office at https://www.gov.uk/register-offices.
Arrange the funeral
One of the first people you will speak to will be the funeral director. You will need to establish your loved one’s wishes in respect of their funeral – do they want to be buried or cremated, do they want a religious service, etc? These wishes may be known to the funeral director (particularly if your loved one has prepaid). If not, the wishes may be detailed in a letter of wishes or in the Will (see below).
The funeral director may ask for a deposit upfront. Before you part with any money you should check to see whether there is a bond or policy that covers the cost of the funeral. It may be that your loved one’s bank is willing to release monies to cover this expense – do be very careful about handling a deceased person’s money prior to taking any legal advice. If you deal with their affairs without any authority you may be asked to account for your activities.
If you do part with any funds to cover the cost of the funeral, keep hold of your receipts as you could be reimbursed by the estate.
Locating the Will
The Will not only sets out the beneficiaries, but also the person(s) responsible for dealing with the estate – known as ‘the executor’. The Will may be kept with a solicitor, in a bank deposit box or at home in a safe. Always make enquiries and never assume the document you have is the last Will – people do change their Wills!
If the Will cannot be found you may consider using a commercial tracing agency. If your loved one did not make a Will or it has been lost, then a set of rules known as the Intestacy Rules will apply to the estate. These rules can be complex and you will need to get legal advice on this point.
Your obligations – tax, creditors, beneficiaries
If you are an executor, and you decide to take up the post, you will have to meet a number of obligations. In principle those obligations will be to HMRC, the creditors and, finally, the beneficiaries.
HMRC
You will have an obligation to settle all taxes. A primary concern is Inheritance Tax (IHT). IHT is not just a tax on the assets the deceased owned when they died but can also cover transactions going back 7 years (in some cases 14 years). If IHT is payable you will need to settle the first instalment by the end of the sixth month after the person has died.
Thankfully there are a number of exemptions and reliefs that can apply – although in many instances you will have a limited time frame to apply for those reliefs. Even where no tax is payable you may be obligated to submit an IHT Return.
You will also need to consider your loved one’s income tax affairs for the tax year leading up to their death and for the administration period. Income tax and capital gains tax liabilities do not stop on death. Even for modest-sized estates you may be obligated to register with and report to HMRC. To avoid interest and penalties (and in some cases criminal sanctions) it is essential that the information you provide to HMRC is submitted within the prescribed time frames and is accurate to the best of your ability.
Creditors
You need to ensure that all debts, liabilities and expenses are settled before you distribute the estate to any beneficiary. Some creditors may not be known to the estate. To avoid the risk of an unknown creditor making a claim you may wish to apply for a ‘statutory creditors’ notice’. Such notices offer an executor protection if a creditor of an unknown debt lodges a claim after the estate has been distributed.
Beneficiaries
You need to identify all the beneficiaries (this may not be obvious) and establish how much they will receive – are they getting a specific item(s), a flat-rate sum or a percentage share? If you are dealing with a minor or incapacitated beneficiary, the Will may contain a trust. You will need to be familiar with the terms of the trust and establish the identity of the trustees. If there is likely to be a dispute, you will need advice on the grounds for that dispute and the limitation periods for making a claim.
Getting legal advice
In almost every case it is essential to get legal advice. The obligations on executors are onerous and they are all too easy to miss. Get it wrong and you could be personally liable. Your trusted solicitor will be able to advise you of those obligations and will be trained and experienced to guide you through the process. A consultation at the outset is an absolute must!
If you need advice, please speak to a member of our team on 01730 268211 (Petersfield) or 01730 816711 (Midhurst)
About the author: Ben Holden is an Associate Solicitor at MacDonald Oates LLP Solicitors. He has over a decade of experience in Wills and Probate law and is also a qualified member of the Society of Trust & Estate Practitioners. Also, Ben is a Full Accredited Member of Solicitors for the Elderly. Ben takes a pragmatic approach and prides himself in taking the time to understand his clients’ needs.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.