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Settling someone’s financial affairs after
their death can be traumatic.Here we
will look at how to manage the process as when you lose someone close to you,
working through piles of paperwork and talking to a whole host of financial
providers is probably the last thing you’ll feel like doing.However, if you are the named executer of
your loved one’s will, you will have to distribute their estate and,
unfortunately, that makes these tasks unavoidable.
During this difficult time, the least you
should be able to expect is that firms treat you with compassion and
respect.However, a recent survey by
Which? readers showed that this is by no means guaranteed – in nearly one in
five cases (18%), people said the providers they dealt with were unhelpful, and
13% said they weren’t treated sympathetically.
Within this article we will try and outline the
steps you need to take after a death to ensure the process of settling
financial affairs goes as smoothly as possible – from closing accounts to
handling probate.We will also address
what you can do if the companies you deal with along the way fail to manage your
Before starting to think about executing the
will, you will need to register the death.This must be done within 5 days (eight in Scotland), and you will need
to bring a medical certificate from a GP or hospital doctor.
You can go to any register office, but if you
use the one in the area where the person died you’ll receive the death certificate on the same
day, instead of having to wait for it to arrive in the post.
When you register the death the registrar will
ask a series of straightforward questions about the deceased – and the whole
process will take around half an hour, after which you will receive the death
certificate and as many certified copies as you need.
You’ll need these certified copies to notify
banks and other institutions of the death, so it is a good idea to request
several at once to avoid having to order more later.If you do this at the time of registering the
death, the cost for each certified copy is £4.
You will also be told about the “Tell us once” service, which informs
other government departments – HMRC, DWP, Passport Office and the DVLA, as well
as the deceased’s local council office about the death in a single
notification.You should receive a
reference number which will allow you to access the service online or by phone.
Once the death has been registered you will be
able to notify and start settling financial accounts.
Banks and building societies
Most banks and building societies have
bereavement teams that you can notify when someone dies, this can be done in
branch, over the phone or by post.RBS,
Barclays and HSBS also have an online form you can use.
After you have notified the bank or building
society they will need to see certain documents, these are likely to include:
death certificate or coroners certificate
forms of ID confirming who you are and where you live (especially if you don’t
bank with the same bank)
original or certified copy of the will to confirm you are responsible for
dealing with the estate
there is no will, a Grant of Probate or letter of representation
The bank will freeze the account, unless it is
in joint names, in which case it will amend its records but allow the other
person to continue to use the account.
You should expect the bank or building society
to deal with your situation sensitively and effectively given their dedicate
bereavement team, but sadly this isn’t always the case.According to a recent survey over a third of
people stated that notifying financial providers and other companies was the
most stressful part of organising their loved one’s affairs after they had
died.Lloyds bank recent were reported
as they had left a customer feeling shaken due to their insensitive and intrusive
questioning.When being notified
of the death of a customer the bank asked for the customers will, copy of death
certificate.All the executor was doing
was the initial notification.Then staff
at this branch of Lloyds wanted to know the exact value of the estate –
something that was irrelevant to them.After conducting this meeting within the main area of the bank, staff
proceed to ask to speak to the deceased’s husband who had died a year earlier,
which they had been notified about at the time.
Home Insurers and Utility
If the deceased was living alone, it’s likely
you will have to deal with an unoccupied property until the house sale is
completed.Four companies were asked
what a family should do and what were the options available if they wanted to
keep the property insured.
Lloyds – explained that some families prefer to
continue making payments while waiting for probate to be granted.Other people choose to wait, but Lloyds said
that it does expect ‘some premiums’ to be paid within three months of death.
Aviva – arranges a ‘promise-to-pay’ day, which is
usually 60days from date of death.
Direct Line – also lets you suspend payments
until probate has been granted.
RSA – requires you to pay even if waiting for
probate – though payment method can be altered.
Insurers also vary in documentation
requirements.Lloyds said that if the
customer was a home insurance customer only they wouldn’t need to see a death
certificate, but RSA would if the person notifying wasn’t named on the
policy.Aviva doesn’t require
documentation, but Direct Line said it would always need to see a death
As for utility firms – British Gas, EDF and SSE
will continue supply a property after death unless asked not to and will wait
for probate to be granted until they ask for payment.
Before being able to distribute the estate, you
are likely to need to get a grant of probate (known as a certificate of
confirmation in Scotland).
Exceptions include where the estate is valued
at less than £5,000, or everything has been left to the surviving spouse.
If the estate is particularly complex, or you
can’t commit time to what can be a laborious process, you might decide to use a
solicitor to help you manage.
But whether it’s to cut costs or keep a higher
control, many executors choose to handle probate themselves.Here is what the process involves…
Step 1 - Assess
The first thing you will need to do is go
through the deceased’s papers (bank statements and investments) and assess the
value of the estate.You should ask the
relevant financial providers for current statements and you’ll also need to
ensure the property is valued accurately, to avoid delays.Use an estate agent or surveyor to give you a
written valuation of the property.There
will be a fee, but you can claim this as an expense against the estate.
Step 2 -
Apply for probate
Once you have assessed the estate you will be
in a position to begin filling in the documentation.
The Probate Application Form (PA1) can
be downloaded from the HM Courts and Tribunals Service via the gov.uk website,
or you can get the forms from the Probate and Inheritance Tax helpline, which
can also answer any questions.
You will need to outline details of all the
In Scotland you complete a C1 form and
send it to the High Sheriff.
You will also need to complete a form to
establish level of Inheritance Tax, if any, the estate is liable for.
Both forms will need to be sent to the Probate
Registry with the following
Original Will (plus 3 copies)
The application fee is £215, but is set to
change under the Governments plan’s for a sliding scale.
Step 3 -
Pay inheritance tax
If, HMRC agrees with your valuation of the
estate, the Probate Registry will be able to send you the document you need – a
Grant of Probate.This will
enable you to begin the next stage, but before then you will need to take an
oath at a local probate office or solicitors for a fee of £5.Within 5-10 days of taking the oath you
should receive the Grant of Probate, it is advisable that you order additional
copies (usually 50p each), so that you can send all the providers a copy.
Paying Inheritance Tax can seem like a catch-22
You must settle up before probate can be
granted but you need probate to be granted to access the deceased’s
accounts.However, there is a scheme
called the Direct Payment Scheme, the bill can be paid directly from the
deceased’s account.You’ll need to
complete form IHT24 and send it to the bank where the account is
held.Once the bank receives this and a
certified copy of the grant they should release the funds in the Executor
Account you will have set up.
Step 4 -
You will now be in a position to distribute
funds in accordance to the will and wishes of the deceased.
Probate is not necessary for estates under £5,000