Managing Your Estate
How to Handle an Estate After The Passing of A Loved One
What to do when dealing with the estate of a recently deceased loved one
When a loved one passes away, an executor is often chosen in their will. The executor’s role is to oversee the division of their estate.
The estate of a loved one is considered to be everything that was in their possession at the time of death. This can include:
- Finances, including all bank, cash or any life insurance policies and building society accounts
- Any money indebted to them
- Real estate property
- Personal possessions
In cases where money was owed to another organization or person, the sum should be subtracted from their estate. This includes rent, mortgages, and credit card bills.
The estate should only be divided up among the beneficiaries after these debts have been paid off. Usually, the closest family members are the primary beneficiaries, but this will be detailed in the will.
An executor or administrator will handle the estate after death. They will be responsible for the paying of taxes and the division of the estate among the entitled beneficiaries.
1. Informing governmental and local authorities of a death
As soon as the executor or administrator has been granted letters of administration or probate, they are required to inform the following governmental authorities of the death:
- HM Revenue and Customs (HMRC) – Call on 0300 200 3300, or +44 135 535 9022 from outside the UK.
- Department for Work and Pensions (DWP) – Call the DWP bereavement service on 0345 606 0265, Welsh language on 0345 606 0275, or textphone on 0345 606 0285.
- Passport Office – Contacting them online , call on 0300 222 0000, or write to: HM Passport Office, Southport, PO Box 767, PR8 9PW.
- Driver and Vehicle Licensing Agency (DVLA) – Write a letter including information on your loved one’s name, address, date of birth, date of death and your relationship to them. Send it to: DVLA, Swansea, SA99 1AB.
- Your loved one’s local council – Find your local council for further contact information.
- Armed forces or Public sector pension schemes – Look for the correct information in your loved one’s paperwork to contact their specific pension provider.
Alternatively, the Tell Us Once service may be able to inform all of these authorities on your behalf. This service is only available in certain locations throughout the UK. To find out if this service is indeed available to you, go to the Tell Us Once website.
You should inform the DWP Bereavement Service or by telephone on 0800 0224 250 of your loss if your loved one lived in Northern Ireland and was receiving benefits from the Department for Work and Pensions (DWP)
2. Debt owed by the estate
All of your loved one’s creditors need to be informed of their death. The debt owed to the creditors will be obtained directly from the estate. If, however, the value of the estate cannot cover the totality of the debt, the family is not required to pay off the debt from their personal savings.
If this is to occur, you should check whether your loved one had taken out any insurance to cover any debts outstanding at the time of their death.
The debt is required to be repaid by the surviving account holder, if the debt was from a joint account. Similarly, anyone who was living with your loved one is expected to continue to pay any council tax outstanding household bills.
3. Joint bank accounts
If one of the account holders of a joint bank or building society account is to pass away, all the remaining money in the account is inherited automatically by the surviving partner. The building society or bank where the account is held may require a copy of the death certificate before any transactions can be carried out.
4. Joint-owned property
There are two forms of joint-owned property for couples:
- Beneficial joint tenancies
- Tenancies in common
Beneficial joint tenancies
If both parties were beneficial joint tenants at the time of passing, the surviving party inherits the other’s share in the property automatically. In this case, probate and letters of administration will only be necessary if the parties jointly owned any other assets.
Tenancies in common
The surviving party from a tenants in common property agreement will not automatically inherit the other party’s share in the property. Within this agreement, probate or letters of administration will be needed so that the executor or administrator can divide the share in the property between those entitled as stated by the will.
5. Mortgaged property
If an inherited property is left with an outstanding mortgage, the mortgage provider will ask the heir to take over the mortgage or to pay the total amount of the mortgage directly.
If life insurance was taken out by your loved one, any endowment or mortgage protection policy may be able to cover the outstanding mortgage balance.
If the heir of the property prefers to sell, the payment of the mortgage will be required after the sale of the property.
6. Low-value estates
When the whole of the estate consists of a low sum in a bank or building society account, you may be able to access those funds without letters of administration or probate. The bank or building society that the account is within may have a different interpretation of what a small amount is than others, so you should reach out to them to find out what they consider a small amount to be.
Some banks or building societies even allow you to remove large amounts of money without having to apply for letters of administration or probate.
In most instances, however, letters of administration or probate are needed before any amount of money can be removed or transferred from an account. The exception to this is when the funds are needed to pay for probate fees, inheritance tax, funeral costs or other expenses associated with the estate and funeral administration.
To learn more about letters of administration, probate, and the roles of the executor and administrator, visit our managing an estate page.
What Is Probate?
Discover more on what probate is and who needs to apply for it
1. What is probate?
Probate is the process of proving that a will is valid and legal in the eyes of the law. Before distributing the estate of a person who has passed away, their will needs to be proven to be binding and legal in probate court.
2. What is an executor?
The executor is the person responsible for carrying out the last will and testament of a person who has died. They need to complete the probate process, after which they shall receive a grant of probate.
3. What is a grant of probate?
A grant of probate gives the executor of a persons will the legal right to administer the estate of and access the finances of, a person who has died. If a person died without leaving behind a will, the executor will need to obtain a grant of letters of administration.
4. What is a grant of letters of administration?
A grant of letters of administration allows a loved one of the recently deceased to access the finances of someone who has died in the event that they did not leave behind a will.
5. What is a grant of representation?
The legal authorisation to manage the estate of a loved one can be occasionally referred to as ‘grant of representation’. This term can be used instead of both letters of administration and probate.
6. How does one apply for probate?
To apply for probate you need to complete the necessary forms and deliver them to your local Probate Registry. You need to fill in a probate application form form C1 in Scotland or PA1 for England, Wales and Northern Ireland. You can reach out for advice on completing the form by calling the inheritance tax and probate helpline.
There can be more than one executor named in the will. If this happens, only one of the executors needs to fill in and send the forms to the Probate Registry.
7. What are probate fees?
If the estate being evaluated is valued under £5,000, you are not required to pay a probate fee. If the estate is valued at £5,000 or more, the executor will usually have to pay a £215 fee.
Normally, costs attributed to the managing of estates are paid by the estate. Although, as you will still not have access to the estate’s money, the executor will need to pay the fee. You may then be able to reclaim this fee from the estate once probate has been attained.
Executors that need to get financial assistance to pay for this fee will be able to do so by filling out the EX160 form.
8. Interview with the Probate Registry
The Probate Registry will contact the executor to arrange an in-person interview. During this interview, before swearing an oath, the executor will have to verify the information on the legal paperwork. This is a crucial part when applying for probate.
The executor must have all of the relevant letters and documentation regarding the estate to continue with this interview.
Instead of traveling to the local Probate Registry there is also the option for the executor to go to a probate solicitor’s office to recite the oath. This service will incur a casual fee, but can be more convenient for some.
Within 10 days of attending the interview, you will usually receive documents confirming that probate has been granted.
9. What happens after a grant of probate is issued?
The documents confirming that probate has been granted will be sent to the executor directly, as well as a letter stating how much inheritance tax is outstanding. Within these documents you will find information about the net worth and the gross worth of the estate.
The gross worth of the estate is the total amount before taxes and debts have been deducted from the amount, and the net worth is what remains after deductions.
The probate and will documents are considered public, so they can be examined by anyone who wants to see them. As soon as you obtain these documents, you can then start managing the estate.
10. What if a grant of probate is denied?
If the Probate Registry is not able to grant probate, you will receive the reasoning in writing. As the executor, without a grant of probate won’t be able to access the finances of the person who has died. You will need to address whatever issues stopped your grant of probate being issued and then re-apply.
11. When is probate not required?
Probate will not be required if the person has passed away left what is referred to as a ‘small estate’ or if the estate only includes:
- Personal possessions such as cars, jewellery and, cash
- Property that is jointly-owned with a surviving spouse
- Bank accounts that are jointly-owned with a surviving spouse
- Debts that are greater in value than the actual assets
- Pension benefits and life insurance policies
12. What is a small estate?
An estate that totals £5,000 or less, is legally known as a ‘small estate’. In those cases, no further actions of probate are required.
Roles of Administrator and Executor
Find out the difference between the administrator and the executor
1. What is an executor of a will?
An executor is a person appointed by the person who has passed away to carry out the managing of their estate. In most circumstances, this role is appointed to a close family member or friend. The intended executor of a will is usually revealed before the actual writing of the will. If this doesn’t happen, in most cases the identity of the executor will be included in the will.
Before any of the estate can be distributed, however, probate needs to be granted to the executor so they can legally continue with their duties.
2. What is an administrator of a will?
The administrator is responsible for managing the estate when there has been no will left behind, the will doesn’t name an executor or the executor has abstained from his/her role. The administrator will only in these circumstances where there is no executor, take up the responsibilities of the executor.
To become an administrator of an estate, a close family member or friend has to apply for permission to adopt this task. Once accepted, they will receive letters of administration, which gives them the clearance to manage the estate as specified in the will.
3. Duties of an executor or administrator
Stated below are some of the most common responsibilities associated with being an executor or administrator of an estate:
- Sending copies of the death certificate to banks, building societies and other financial organisations so that the funds can be released
- Request banks, building societies and other financial organisations to freeze accounts so no money can be taken without the appropriate legal authorisation
- Open up a bank account for the estate
- Check for any past creditors and debtors
- Prepare a thorough list of all of the estate’s debts and assets
- Calculate the value of the inheritance tax and arrange to pay it off
- Send the relevant documents to HM Revenue and Customs and the probate registry
- Collect any funds indebted to the estate
- Pay any debts, fees and expenses owed from the estate
- Distribute the assets of the estate to the entitled people according to the will or to the rules of intestacy
The executor or administrator should contact a solicitor for professional legal advice, in the event that the total debts of the estate are greater than the total assets.
4. What to do if you do not want to be the executor of a will
If you have been identified as an executor in a loved one’s will and don’t want to act in this role, you have the choice of renouncing the role as this could be the last thing on your mind for what you want to be doing.
In order to relinquish the duties of an executor, you will have to fill in the ‘Form of Renunciation’. Once this form is filled, it needs to be sent to a Probate Registry along with the will.
Once that is completed, another friend or family member can apply for letters of administration to gain legal authorization to manage the estate as the administrator.
If completely renouncing is not what you want to do, you do have the option of naming someone else the executor of the estate on your behalf. In order to do this, you will have to put the person’s details into the PA1 form. The person you’ve named will then be sent a document that they will then need to sign to accept the role of executor.
The renunciation is valid from the time it is filed by the Probate Registry. If you wish to retract your renunciation after this time, only a registrar or district judge can grant you the status of executor back.
5. What to do if the executor of a will is not managing the estate appropriately
Beneficiaries in the will may be dissatisfied with the actions of the executor. If that is the case, you should first ask the executor to make a record of the estate’s administration.
If after that you are still unsatisfied, you can apply for the courts to remove or substitute the executor.
This process can be very difficult as even before the courts consider removing an executor from their role you must prove serious misconduct has been performed by the executor. Some of the most common examples of misconduct a court may consider include:
- Stealing from the estate
- Failing to keep accurate accounting records
- Not obeying a court order
- Not managing the estate properly
Sometimes misconduct is not always clear and the court may not remove an executor from their post.
6. How to remove or substitute an executor
The first thing you should do if the executor is not managing the estate appropriately is to write to them asking for an explanation for their actions.
If the executor’s explanation is unsatisfactory, you can apply to the courts for them to remove or substitute the executor. With this application you should include:
- A sealed certified copy of the grant of probate or letters of administration
- A statement made by a witness stating why the executor should be removed or substituted
- A solicitor’s signed consent to proceed with the removal or substitution of the executor
- A statement from a witness stating that the proposed executor is fit to act as executor
If you feel that an executor acting on the behalf of a loved one is managing the estate irresponsibly or inappropriately, contact your solicitor to discuss your concerns.
Letters of Administration
Discover what letters of administration are and who needs to apply for them
1. What are letters of administration?
Letters of administration allow a family member or friend to act as the administrator of an estate. An administrator will only become responsible for managing the estate when an executor has not been legally appointed and after the probate registry issues what is known as a grant of letters of administration.
The legal authorisation to take control of the estate of a loved one is sometimes referred to as ‘grant of representation’. This term can be used instead of both letters of administration and probate.
2. How to become an administrator of an estate
To receive the letters of administration and become the administrator of the estate, a probate application form has to be sent to the Probate Registry. Only in the following circumstances will someone have to apply to become the administrator of an estate:
- No executors are named in the will
- The executors named in the will do not to adopt the role
- The absence of a will
- Invalidity of a will
In the event that the entire estate is left to one person, the letters of administration can be sent to the sole benefactor even if there is a valid will with named executors.
3. Prioritising administrators
Normally, the role of administrator is intended to be the next of kin. Certain family members are prioritised when considering whether to send someone the letters of administration:
- Marital or civil partner
- Brother or sister
- Nephew or niece
- Another relative
Usually, an unmarried partner who has not been named as an executor in the will won’t be granted letters of administration. This intention has to be stipulated in the will.
4. Dealing with the Probate Registry
The Probate Registry will contact the administrator to arrange an interview. At this interview, the administrator will have to verify the information on the legal paperwork before swearing an oath. This is an important part of applying for probate.
The administrator of the estate is obliged to bring all of the relevant documentation and letters regarding the estate to the interview.
There is also the option for the administrator to go to their solicitor’s office to confirm the oath instead of the Probate Registry. This service will incur a small fee from the solicitor, but can be more convenient for some.
5. When the letters of administration are not required
In most cases, where there are properties in an estate, you will need to be granted letters of administration. However, you won’t need any of these documents if the estate consists of:
- Personal possessions such as cars, jewellery and, cash
- Property that is jointly-owned with a surviving spouse
- Bank accounts that are jointly-owned with a surviving spouse
- Debts that are greater in value than the actual assets
- Pension benefits and life insurance policies
6. How long does it take to get probate or letters of administration?
When there are no complications with your application for letters of administration, you could receive authorization to proceed as an administrator in 3 to 5 weeks. When there are complications, however, this process can take longer.
7. What happens after visiting the Probate Registry?
After the interview at the Probate Registry, a letter stating how much inheritance tax the estate has incurred will be sent.
Once the inheritance tax has been paid, the letters of administration will be sent to the administrator. Within these documents you will find the gross worth and net worth of the estate.
With these documents, a photocopy of the will with an authentication stamp that proves that it is an official copy will also be sent.
The will and letters of administration are considered public documents, so they can be examined by anyone who requests to see them. As soon as you receive these documents, you can start acting as the administrator.
Removing and Substituting Executors
What to do when the executor needs to be removed and replaced
1. Removing and substituting executors
You will find in this article the most common scenarios when there is a need to substitute the executor and the actions to be taken in each case.
2. What should I do if I do not want to act as the executor?
If you have been appointed as an executor on a person’s will and does not wish to act or cannot act, you have the choice of renouncing, which happens when all of the following are applicable:
- The person who made the will has died
- You have been appointed as an executor and do not wish to act
- You do not want to appoint someone else to apply for probate on your behalf
- You have not started dealing with the deceased’s estate
In order to renounce, you will have to fill in a document called a form of renunciation – which can be bought in specialist legal stationery retailers, such as Oyes – and signed by a disinterested witness. After this form is filled, it needs to be logged at a probate registry along with the will.
The renunciation is valid from the time it was signed, although it may lose its effect at any time before it is filed with the probate registry. If you wish to take back your renunciation after the document has been lodged, only a district judge or registrar can grant you the status of executor back.
After that is done, someone can then apply for letters of administration to deal with the estate.
Instead of renouncing, you also have the option of naming someone else to act as an executor in your place – all you have to do is fill the person’s details in the PA1 form and they will be sent a form to sign.
3. What to do if the executor refuses to act?
If the named executor refuses to apply to probate one or more of the will’s beneficiaries or next of kin may write to them and put them on notice that an application may be sent to court to name someone else to manage the estate.
A court order may allow for a beneficiary or next of kin to apply for a grant of probate. In case the next of kin do not have a copy of the original will, which is in the executor’s possession, a subpoena should be served upon the executor so they are obliged to deliver the original will in up to eight days.
Eight days after the subpoena has been served, the next of kin can file a citation at court, which requires that the named executor accepts or refuses the grant of probate.
The court will issue the grant of probate to the next of kin if the named executor fails to apply or renounce. This process cannot be done in case the named executor has already started dealing with the estate.
Once the executor starts managing the estate they cannot renounce nor can they refuse to take the grant of probate. When that is the case and the executor refuses to take the grant, the next of kin may apply by summons to court for an order to make the executor take probate within a deadline or ask the court to order that a grant is issued for themselves or another person who was named in the summons. After this court order is issued, the next of kin may apply for grant of probate.
4. What can I do if the executor is not managing the estate correctly?
Beneficiaries in the will and next of kin may be dissatisfied with the actions of the executor. If that is the case, you must first ask the executor to make an account of the estate’s administration.
If after that you are still not satisfied with how the executor is performing their duties and you are a beneficiary or next of kin, you can apply to court to remove and substitute the executor.
This process can be very difficult as even before the court considers removing an executor from their post the interested parties must prove serious misconduct performed by the executor.
In most cases an executor is removed from their post by court order if the beneficiaries can prove one of the following:
- The executor is disqualified
- The executor is incapable of performing their duties
- The executor is unsuitable for the position
An executor becomes disqualified if they have been convicted of a crime and sent to jail.
When an executor is incapable of performing their duties it is proven by the beneficiaries that the executor has a physical and mental disability, which can be permanent or temporary, preventing them from properly managing the estate.
A conflict of interest or some form of serious misconduct make the executor unsuitable to perform his duties. If the reason is misconduct, the court will only consider removing an executor if the beneficiaries can provide proof that the misconduct is very serious in nature and the estate is suffering as a direct consequence of it.
Some of the most common examples of misconduct a court is likely to consider is when the executor:
- is stealing from the estate
- fails to keep accurate accounting records
- does not obey a court order
- wastes or does not manage the estate properly
Sometimes misconduct is not always clear and the court may not remove an executor from their post – for instance, if the executor is repeatedly refusing to give information to the beneficiaries or has been unfriendly or rude to the beneficiaries, or has been slow in settling the will.
5. Removing an Executor
The first thing the beneficiaries should do if they are not satisfied with how the executor is administrating the estate is to write them asking them to explain their actions.
If the executor does not explain their performance or the beneficiaries are not satisfied with the explanation given, the beneficiaries can make an application to court to remove or substitute the executor.
This application must contain the following:
1- A certified sealed copy of the grant of probate or letters of administration.
2- A statement made by a witness saying why the executor should be removed and substituted (giving as a reason their unsuitability, disqualification or incapacity), as well as names of the people in possession of documents that have a relation with the estate, the names of the beneficiaries and details of their interest, the deceased’s assets and liabilities and the name of the proposed person to substitute the current executor.
3- The official solicitor’s signed or sealed consent to act (unless the proposed executor is the solicitor).
4- A statement from a witness saying the proposed executor is fit to act.
To find a specialised solicitor you should search:
Browse this comprehensive guide to Inheritance Tax for further information
1. What is Inheritance Tax?
Inheritance Tax is a tax which needs to be paid on the estate of your loved one.
2. What are the Inheritance Tax rates?
The rate is 40% on values above the Inheritance Tax threshold of £325,000. However, the rate may be reduced to 36% if at least 10% of the estate is donated to charity.
3. Who should pay Inheritance Tax?
Normally the executor or administrator pays Inheritance Tax using money from the estate. In case there is Inheritance Tax to be paid on trusts, the trustees are the ones responsible for the payment.
Although you may have to pay for other taxes, you usually do not have to pay the Inheritance Tax if you have received an inheritance (there are some exceptions to this, however).
You may also have to pay Inheritance Tax if your loved one gave you a gift before they died.
4. When do I need to pay for Inheritance Tax?
There is an Inheritance Tax allowance, or threshold, of £325,000. If the estate is valued at over £325,000, Inheritance Tax needs to be paid – except in some cases, such as when the husband, wife or civil partner inherits the estate. However, thresholds may vary for previous years.
There are also other Inheritance Tax exemptions and reliefs, for example for businesses and agricultural property.
If you need to pay Inheritance Tax, you should inform HM Revenue and Customs (HMRC) of the death, regardless of probate and letters of administration.
When the Inheritance Tax needs to be paid, some of it must be paid before probate or letters of administration are granted. After those documents are granted, a final tax bill will be underway.
5. How do I know if I have to pay for Inheritance Tax?
First of all, you will have to calculate the value of the estate. If it is valued above the Inheritance Tax threshold, you will have to pay the tax. If it is below, there is no need to pay for it.
Depending on the case, you will have to send other forms as well.
You or your solicitor will have to send the form(s) along with an application for probate, also known as a ‘grant of representation’ (called ‘confirmation’ in Scotland).
The grant of representation or confirmation gives you the right to act as an executor or an administrator to deal with your loved one’s estate.
6. What is the deadline for paying Inheritance Tax?
The deadline is six months after the death and the amount is usually paid by the executor or administrator of the estate – if it is after this period you will have to pay interest.
There is the option for you to make early payments (with no interest charged) before you know how much Inheritance Tax is owed.
If the estate has assets that may take a long time to sell, such as property or shares, you can pay the Inheritance Tax in instalments for more than 10 years on those assets.
7. How to pay Inheritance Tax
Once you have your reference number, there are several ways to pay Inheritance Tax to HMRC. The most common of these are:
- Through your bank or building society
- By cheque through the post
- From your loved one’s bank account – this is known as the ‘Direct Payment Scheme’ and you will need to ask the bank or building society to make you a ‘personal representative’ of the account.
For more Inheritance Tax advice you may wish to consult the HMRC website, or seek help from a financial advisor or solicitor.
What is a Lasting Power of Attorney?
How to make an LPA and what the role of attorney entails
If you lose the capacity to make important decisions at the end of life, due to an illness or other life-threatening conditions, a lasting power of attorney (LPA) gives someone else the responsibility to make decisions on your behalf.
Formerly known as enduring power of attorney, LPA is most commonly given to a loved one or relative. They will act in the role of attorney and make decisions should you be unable to do so. There are two types of lasting power of attorney:
- Health and welfare (including decisions about your daily routine, medical care, moving into a care home, life-sustaining treatment)
- Property and financial affairs (including managing a bank account, paying bills, collecting benefits and selling property)
You can choose to appoint an attorney for just one type of LPA or both.
1. The role of attorney
When your loved one takes on the role of attorney, they will be responsible for your estate and medical care. They will have the legal authority to make important decisions on your behalf, as long as these decisions do not conflict with any advance decision you may have made.
Therefore, it is vital that you choose someone you trust to act in your best interests. You may also want to make an advance care plan to clarify your end of life wishes.
2. How to make a lasting power of attorney
You must be 18 or over to make an LPA.
In England and Wales, you can make an LPA by registering it with the Office of the Public Guardian. You can download the appropriate forms online. It will cost £82 to register an LPA, unless you are entitled to an exemption or reduction.
Once you have registered an LPA, the attorney can be substituted with another at any time.
In Scotland, a power of attorney (PoA) must be drafted and signed by a solicitor, before being registered with the Office of the Public Guardian (Scotland). The registration fee is £75, unless you are entitled to an exemption.
In Northern Ireland, power of attorney may be referred to as enduring power of attorney (EPA), and should be made with the advice of a qualified solicitor. The Office of Care and Protection can provide more information on creating an EPA in Northern Ireland.
Living Wills: A Guide to Advance Directives
An overview of advance directives (living wills) and why they are important
When you’re in relatively good health, advance care planning is something you may not have thought about.
But it’s sensible to plan for end-of-life care by creating a living will or advance directive even though this could be years into the future.
This guide will take you through advance care planning and what you need to do make an advance directive.
1. What is an advance care plan?
Advance care planning allows you the chance to make decisions about the care you wish to receive to maximise your independence and health as you near the end of your life.
An advance care planning document which also known as a living will, will cover big decisions, from refusing certain life-prolonging interventions that you would not wish to have to expressing more personal wishes for your comfort.
Making an advance care plan should involve having a number of conversations with health workers and loved ones about what you want to happen, should you lose the ability to make those decisions later in life.
It is important that you write down or record these conversations so that your intentions are made clear to everyone before your end of life care begins.
2. What are the benefits of advance care planning?
Advance care planning goes a long way in reducing the anxiety of having to make rushed, impulsive decisions about your care as you near the end of your life.
It may also be helpful for your loved ones who may feel comforted knowing that with the care plan in place, you have the freedom to live your final days as you choose to.
3. What is a living will or advance directive?
A living will or advance directive allows you to write down the actions that your family or healthcare professionals must take when you are unable to communicate with them due to a terminal illness or condition.
Also known as an advance decision to refuse treatment (ADRT), it outlines the medical treatment you wish to receive after you become unable to make the decision for yourself.
When properly signed, this kind of living will is legally binding. You can choose to:
- Specify certain treatments that you want to refuse.
- Mention the circumstances under which this would apply.
- Refuse certain life-saving or life-prolonging treatment such as CPR or a ventilator to help you breathe.
- Donate your tissue and organs when you die.
- Make a lasting power of attorney.
Bear in mind that an ADRT cannot be used to end your life, request certain treatment or care to make you feel comfortable.
4. What to consider before making an advance directive?
- Think about potential situations where you might want to refuse treatment.
- Spend some time with healthcare professionals or your doctor or nurse to understand different options, the risks, benefits and consequences of refusing treatment.
- Discuss your wishes with family members.
5. How do I make an advance directive?
Once you have decided what you want regarding treatment options, and have understood and discussed the consequences with your health care team and family members, you can:
- Fill in the Advance Decision form, outlining your decisions.
- Sign and date it, in the presence of a witness who will also sign and date it.
- Once it has been signed, the advance directive or living will is then legally binding, and your loved ones cannot overrule what you decide in this document.
If you are undergoing treatment at the stage you write your advance decision, it is important to talk with healthcare professionals about your condition and the outcome of any treatment, so you fully understand the decisions you are making.
An advance care decision has to be valid which means that you were fully capable of decision-making and were not influenced by other people in any way. In order to be carried out, an advance directive also has to be applicable meaning that the way it is written is specific about the medical circumstances that your wishes refer to, leaving no room for doubt.
6. Who should see your advance directive?
It is important that your family or those involved in your care including your GP or healthcare providers are aware and have access to your living will.
- Give a copy of your advance care planning documents to close family members and emergency contacts.
- Have your GP file it with your medical records.
- Leave a copy with any others involved in caring for you such as a nurse, care worker or other health or social care professionals.
While a living will is different from a will, it is sensible to prepare both when you are planning for end of life care. Read our blog on why it is a good idea to write a will.
Does Debt Die With You?
A guide to paying debts after someone dies, and what happens to an insolvent estate
1. What happens to debt when you die?
When you die, your debt does not die with you. Whenever someone dies, their estate is liable for any unpaid debts. The debt is not inherited by their next-of-kin, but the executor of their Will is under contract to distribute it to the rightful recipients and can be liable for paying a debt if they make an error. If the debt is larger than the value of the estate, the estate can be declared insolvent and nobody else is responsible for paying it, provided it is administered correctly.
If you are writing a Will and worried about passing the responsibility of debt on to your next of kin after your own death, you might want to consider appointing a professional executor in your Will.
Paying off as much debt as you can before you die should make things easier for your loved ones. Everything else depends on the actions of the executor of your estate.
Our guide to administering the estate of someone who has died in debt might help you handle this process, but it can become very complicated and it is a good idea to consult a probate solicitor.
If you are the executor of an estate with substantial debts you might want to consider renouncing the role. You will lose the right to administer the estate if is insolvent.
2. When are creditors notified of a death?
The executor of the estate must make a reasonable effort to notify potential creditors of the death of their loved one. Placing a death notice in The Gazette, the official newspaper of the British Government, and also in a local paper, would satisfy this requirement.
After the announcement of a death creditors have two months and one day to make any claims on an estate. If there is no death notice, the executor of the estate is usually not liable for any debts if they wait six months before distributing the estate. If there is no death notice and the estate is distributed within 6 months of the grant of probate the executor and beneficiaries can be liable for paying the debt.
It is important to do a thorough search for resources, such as insurance, that can be used to pay debts on an estate before deciding if the debts are payable.
3. What happens if an estate is unable to pay its debts?
If the executor of an estate discovers that the estate is unable to pay its debts they can apply for it to be declared insolvent, which is similar to bankruptcy.
In England and Wales, they should apply to the court for an Insolvency Administration Order. The estate is passed to a Trustee-in-Bankruptcy who has more powers to claim money that can be used to pay debts.
In Scotland, the executor should apply to the Accountant in Bankruptcy (AiB) for the estate to go through a process called ‘sequestration.’ Anyone who would be legally entitled to act as an executor, such as another close family member, can also apply to the AiB for the estate to be sequestered. A creditor who is owed more than £3,000 from the estate can also apply for sequestration, but they must do so via the courts. A sequestered estate is also handed over to a trustee.
4. How are debts paid on an insolvent estate?
The Administration of Insolvent Estates Act (1986) specifies an order of payment for debts, to ensure that the money that the estate does have is paid to the highest-priority creditors first. Reasonable funeral expenses are usually exempt from this, and can be paid before the lowest priority debts.
If this process is handled correctly and it becomes clear that the money in the estate, or that can be claimed by it, does not cover all of its debts then the ones that aren’t payable can be written off and no one else is liable to pay it.
If the person who has died in debt gifted a large sum of money to someone who they wanted to inherit their estate before their death this might be interpreted as an attempt to avoid the debt. Creditors might be able to apply to the courts to have the beneficiary pay the money to them.
5. Who can help pay debts on an estate?
If you do become liable for a debt because of incorrect administration of an estate, or because you are solely responsible for paying bills you previously shared with a loved one who has died, a debt adviser can help you.
A debt advisor can explain your legal obligations, rights and any options you might not have considered before. Make sure that whatever action you take is the most effective option for you and your family, and do not let yourself become pressured into making any decisions by creditors who might mislead you.
There are many free debt advice services in the UK who can help you.
- National Debtline
- Debt Advice Foundation
- StepChange National Debt Charity
- Citizens Advice Bureau
- National Debt Advisors
There are also many bereavement support and grief counselling organisations in the UK that can help you with the emotional distress of losing a loved one during this period. We have a full guide to managing an estate if you need more information on the subject.
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