Guide to Estate Administration

Introduction

In anything other than the smallest estates, or estates where everything is held in joint names, it is usually necessary to obtain a grant of representation (either a grant of probate or a grant of letters of administration) in order to access the assets of the deceased person and to distribute the assets to the beneficiaries entitled to them. The purpose of this guide is to explain some of the jargon and to tell you what is involved with obtaining a grant of representation and administering an estate.

What is a grant of representation?

A grant of representation is an order, issued by one of the probate registries of the High Court, which confirms or confers the authority of the “personal representatives” (i.e. the executors or the administrators) to administer the estate of the deceased person. There are three types of grant of representation:

• A grant of probate: This is issued to one or more of the executors nominated in the will to deal with the estate. It confirms or “proves” the authority of the executors appointed by the will.
• A grant of letters of administration with will annexed: This is issued when there is a will but there is no executor named in the will or all the named executors are unable or unwilling to act as executors and to deal with the administration of the estate.
• A grant of letters of administration: This is issued when the deceased died without leaving a will (which is known as being “intestate”). The persons who obtain a grant of letters of administration are known as administrators and must establish their entitlement to apply for a grant.

The duty of the personal representatives is to administer the estate. This includes collecting all the assets, settling all the liabilities, exercising any available powers and discretions and then distributing the rest of the estate in accordance with the terms of the will or the rules of intestacy. It is normally not possible to collect assets (apart from joint accounts which pass automatically to the survivor) or to pay liabilities of the estate out of the assets of the estate until the grant of representation has been obtained.

What is needed to obtain a grant of representation?

The personal representatives must swear an oath for the court. The executors must say that they are the executors appointed by the will. The administrators must establish their entitlement to take out a grant. In both cases, the personal representatives must state the value of the gross and net estate of the person who has died and they must swear that they will ensure that his or her property will be distributed in accordance with the law and with the will, if there is one.

Therefore, one of the first steps in this process is to obtain and collate details of all the deceased’s property and all the debts or liabilities. The property will include any house, car, furniture, savings, life insurance policies, personal possessions, jewellery and anything else capable of being valued and of being transferred from one person to another. The liabilities may include a mortgage, outstanding bills, etc. and will also include the funeral expenses.

How is a grant of representation obtained?

An oath for executors or an oath for administrators must be lodged at one of the probate registries of the High Court. It will generally also be necessary to submit an HMRC account setting out all the assets and liabilities. Once the registry accepts the papers, they will issue the grant of probate or the grant of letters of administration. In either case it is that document which allows the executors or administrators to administer the estate.

This means, for example, that the grant will be registered with companies in which there were shares, or with building societies or banks in which there was an account in the deceased’s sole name. After the grant has been registered, it will be possible for the property or the money to be transferred to the personal representatives, so that they can deal with it in accordance with the will, or in accordance with the intestacy rules if there is no will.

Of course, a final distribution of all the assets can only be made when all the liabilities, especially tax liabilities, have been ascertained and settled. This can take some time, particularly where values are uncertain and have to be agreed with HMRC. However in most cases it is possible to make interim distributions to the beneficiaries on account of their entitlements.

The final winding-up

There comes a point at which all the assets will have been collected (and if necessary any properties sold) and all the liabilities will have been discharged. The balance of the estate will then be ascertained and can be distributed or held in trust for the beneficiaries under the terms of the will or the rules of intestacy. At this time, we prepare estate accounts setting out full details of the assets and liabilities and all payments and receipts. This gives the executors and beneficiaries a comprehensive record of the administration of the estate.

Estate administration case studies

To see some examples of how different executors approached using our services to help with estate administration please read our explanatory case studies:

• Case study: Full probate administration (estate value £279k)
• Case study: Grant only (estate value £147k)
• Case study: Grant only (estate value £1.2m) 
• Case study: Full probate administration (estate value £800k)

Get in touch

Please contact us if you would like to learn more by speaking to one of our experienced team members.