How to Administer a Relatives Estate

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25. INSOLVENT ESTATES KEY POINT: AN ESTATE IS INSOLVENT IF THERE ARE INSUFFICIENT ASSETS TO PAY ALL OF THE DEBTS ACTION: IF YOU ARE DEALING WITH AN INSOLVENT ESTATE THEN SEEK LEGAL ADVICE 25.1 INSOLVENT ESTATES If there are insufficient assets to pay the debts and liabilities, the estate is treated as being insolvent. An insolvent estate needs to be administered in accordance with the Administration of Insolvent Estates of Deceased Persons Order 1999. There is a set procedure for dealing with these and legal advice is often needed in this situation. 25.2 THE SOLVENT ESTATE An estate is solvent when the assets are sufficient to pay funeral, testamentary and administration expenses and debts and all other liabilities in full. 25.3 THE INSOLVENT ESTATE An estate is insolvent if the assets are insufficient to pay the funeral, testamentary and administration expenses, debts and liabilities in full. It is important for the Personal Representative to be aware that in the case of an insolvent estate, the creditors are entitled to be paid in a strict order of priority which is: (a) (b) Funeral, Testamentary and Administration expenses, and then Other debts in accordance with a bankruptcy order. For unsecured debts then on a pro rata basis in proportion to the net assets and the value of each individual debt. This order of priority of payment cannot be varied under the terms of the will or Intestacy Rules or by the Personal Representative. If the Personal Representatives, do not follow the statutory order they will incur personal liability for "superior" debts which have been left unpaid. Therefore, if there is any possibility that the estate may be insolvent then the Personal Representative should observe the statutory order when paying debts. 25.4 AN EXAMPLE If the total assets are say £10,000 and the funeral and testamentary expenses are say £2,000 and there are other unsecured debts of say £16,000 then the funeral gets paid in full and of the remaining balance of £8,000 then creditors that are owed a total of £16,000 will receive 50% of their outstanding debt. 25.5 USING SOLICITORS Please remember that at any time, you can simply delegate the task of sorting things out to a firm of solicitors such as ourselves who will deal with as much as you want them to on your behalf and therefore relieve you of any of the stress, hassle and worry of dealing with the administration of a loved one’s estate. _________________________________________________________________________________ Need a Grant of Probate? Need Help Administering An Estate? 28 Contact Seatons Now Need Call a Grant us today! of Probate? – 0800 310 Need 11 12 Help Administering An Estate? Call: 0800 310 11 12 1 Alexandra Road Corby, Contact Northamptonshire, Seatons Now. Call: NN17 08001PE 310 11 12 Email: adrian@seatons.co.uk www.seatons.co.uk 6 Market Street, Email: Kettering, adrian@seatons.co.uk Northamptonshire, NN16 www.seatons.co.uk 0AH Copyright: Seatons Law Limited www.seatons.co.uk © Seatons Law Limited
26. FINALISING ESTATE ACCOUNTS KEY POINT: WHEN ALL THE ASSETS ARE RECEIVED AND LIABILITIES PAID THEN A SET OF ESTATE ACCOUNTS SHOULD PREPARED 26.1 PREPARING ESTATE ACCOUNTS When the full extent of the estate is known then the Personal Representatives should prepare final accounts summarising all the assets received, debts and liabilities paid, and where the estate is being distributed. 26.2 FORMAT OF ACCOUNTS There is no set format. However something along the following lines for a simple estate might be sufficient: ESTATE ACCOUNTS FOR DEREK SMITH DECEASED ASSETS Anywhere Bank Account - A/C 12345678 £10,000.00 Nowhere Insurance Policy - Number - 567890 £5,000.00 TOTAL ASSETS £15,000.00 LIABILITIES RIP Funeral Account £3,000.00 Somewhere Loan - Number 0987654 £1,400.00 Miscellaneous Additional Expenses Etc £350.00 Probate Court Fees (Estimate) £250.00 TOTAL LIABILITIES £5,000.00 NET ESTATE FOR DISTRIBUTION £10,000.00 DISTRIBUTION John Smith - 50% £5,000.00 Delia Smith - 25% £2,500.00 Eric Smith - 25% £2,500.00 26.3 APPROVAL OF ESTATE ACCOUNTS It is always good practice to send the draft estate accounts to the main beneficiaries and seek their approval of them so as to avoid any issues in the future. 26.4 USING SOLICITORS Please remember that at any time, you can simply delegate the task of sorting things out to a firm of solicitors such as ourselves who will deal with as much as you want them to on your behalf. _________________________________________________________________________________ Need a Grant of Probate? Need Help Administering An Estate? 29 Contact Seatons Now Need Call a Grant us today! of Probate? – 0800 310 Need 11 12 Help Administering An Estate? Call: 0800 310 11 12 1 Alexandra Road Corby, Contact Northamptonshire, Seatons Now. Call: NN17 08001PE 310 11 12 Email: adrian@seatons.co.uk www.seatons.co.uk 6 Market Street, Email: Kettering, adrian@seatons.co.uk Northamptonshire, NN16 www.seatons.co.uk 0AH Copyright: Seatons Law Limited www.seatons.co.uk © Seatons Law Limited
Page 1 and 2: HOW TO ADMINISTER YOUR GUIDE TO BUY
Page 3 and 4: INDEX 1. FEELINGS FOLLOWING THE LOS
Page 5 and 6: 2. WHAT TO DO HAVING LOST A LOVED O
Page 7 and 8: 4. ARRANGING THE FUNERAL KEY POINT:
Page 9 and 10: 6. TELL US ONCE SERVICE KEY POINT:
Page 11 and 12: 8. ADMINISTERING THE ESTATE KEY POI
Page 13 and 14: 10. WHY USE SEATONS? KEY POINT: CHO
Page 15 and 16: 12. INHERITANCE TAX KEY POINT: INHE
Page 17 and 18: 14. WHO IS ENTITLED TO THE ESTATE -
Page 19 and 20: 16. COLLECTING THE PAPERS TOGETHER
Page 21 and 22: 18. IS A GRANT NECESSARY? KEY POINT
Page 23 and 24: 20. WHAT TYPES OF COURT GRANTS TO A
Page 25 and 26: 22. NEED TO ONLY OBTAIN A GRANT OF
Page 27: 24. PAYING DEBTS KEY POINT: MAKE SU
Page 31 and 32: 28. ADMINISTERING USEFUL ORGANISATI
Page 33 and 34: 30. 6. TELL TESTIMONIALS US ONCE SE
Page 35 and 36: 32. 4. ARRANGING STEP AND SFE THE F
Page 37 and 38: 34. OUR OTHER LEGAL SERVICES For mo
Page 39 and 40: 36. AND FINALLY.... PLEASE CONTACT

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