Dealing with finance is a difficult job and the task becomes all the more difficult if the finance you are handling is of a deceased person. This is so for the simple reason that you cannot ask them whom do they wish to give their assets to.
But here we have shared some of the common factors which you may come across while dealing with a deceased person’s finances. Firstly, everything that belonged to the death person is known as an estate. It can be property- home, shares, money owned, insurance policy, car, jewellery, etc.
Generally all the belongings of a deceased person are transferred to their family, close relatives or friends. In other situations, it can be divided or given off to people who have been mentioned in the Will.
This is one crucial reason why one should draft their Will in an appropriate manner. If you are not aware about the right process or essential factors which should be mentioned in it then you can refer to the DIY kits offered by companies.
Some individuals believe the misconception that drafting the Will is highly expensive. But, there are companies who offer the same services in reasonable prices all you need to do is ask them: how much does a Will cost?
Besides, you must look into the following factors when you are evaluating or looking into finances of the deceased person-
Essential Taxes and Benefits
The first thing that an individual must do is calculate the tax, benefits and National Insurance levied on the finance of the deceased. Sometimes, there are tax payables while in others there is tax receivable.
You have to inform the government authorities as well as the tax office or a particular company about the death of that person. This task has to be carried out as soon as possible to avoid tax issues. The best time is perhaps once you get the death certificate or any other valid evidence about the demise to submit to the authorities.
Letters of administration
There are some situations wherein an executor or the person dealing with finances of the deceased has to apply for letters of administration. You can apply for letters of administration when-
- In absence of a valid Will
- There is no Will
- Executors are unwilling to act
- There are no executors mentioned in the Will
- If the deceased person all their estate in your name
The person who applies for letters of administration is referred as the administrator but there are some strict rules to become one.
On the other hand, if there is no specific Will then you can initiate and apply to be an administrator. You have to follow this priority order:
- You are either civil partner or married to the deceased
- The deceased person is your parent
- You are grandchildren of the deceased
- You are parent of the deceased person
- You are sibling of the deceased person
- You are nephew/niece of the deceased person
- You are another relative of the deceased person
Any unmarried or same-sex partner who has not been legally registered or mentioned in the Will cannot act as an administrator.
You have to apply for a probate if you have been mentioned in someone’s Will as an executor. Probate is a legal document which offers you the authority to allocate the estate of the person of the deceased as per the instructions in the Will. However, there is no thumb rule that you necessarily need a probate to deal with the estate.
Besides, even though you have been mentioned in the Will but if you do not wish to take up the responsibility then you don’t have to act upon it.
Irrespective of nature of the death, the person is likely to have certain debts in form of overdraft or credit agreement not paid off. In such circumstances, you need to inform all the creditors about the person’s death.
As a matter of fact, the creditors cannot regain their sum if the deceased person does not have enough estate to repay them. However, creditors can get in touch with the person’s relatives to acquire their pending amount.
You can also run a check if the individual had an insurance policy and if that could be utilised to pay off the creditors. For instance, if the individual had been mis-sold PPI policy then they are entitled to compensation. This compensation can be transferred to the creditors and get rid of the debts.
If the debt belongs to a partnership or joint account then the debt amount can be recovered from the other partner or account holder who is alive.