Administration of Estates in Northern Ireland

The process of administering someone’s estate can be a lengthy and laboured process. There are many steps to take between someone being left a legacy gift in a Will, to them finally receiving it. The person with the responsibility of ensuring that the estate is administered correctly is known as the ‘executor’ (if the deceased made a valid Will) or the ‘administrator’ (if the deceased did not leave a Will or their Will is invalid). The person in charge of administering the estate is personally liable to discharge the money owed by the estate, to ensure that all gifts have been allocated to the intended parties, and to make suitable provisions if they are unable to do so. Understandably, this can cause many headaches to arise for the executor/administrator appointed.

The Role of Executor

A personal representative appointed by the deceased’s Will is known as an ‘executor’. The role of executor is an onerous role. There is no limit to the number of executors one can appoint. It is good practice, when the testator initially drafts their Will, to ensure that the appointed executor(s) are aware that they are to be appointed and to let them express whether they wish to accept the responsibility or not. This can help avoid the issue later down the line, when the estate is being administered, of the appointed executors declining to act.

However, instances do arise where executors reserve the right to not act upon the death of the testator. Provided that the executor has not already intermeddled with the estate, and their renunciation is provided in writing, all executors are able to decline the role. If all executors (or the sole executor, such as the case may be) reserve their right not to act, then the next entitled person under the Non-Contentious Probate Rules 1987 will then be free to apply to be executor.

The executor is elected to manage the testator’s estate and ensure that everyone who is entitled to a share of the estate receives what they are due. This not only includes people who have been gifted part of the estate under the Will, but also people or organisations to whom the deceased owes money at the time of their death. This can include things like nursing home fees, credit card statements and utility bills. It is important to note that the executor is personally liable for the debts of the estate and must act on behalf of the estate in any legal proceedings which arise. The executor must take a detailed inventory of the items belonging to the deceased and have this list to hand in case any queries arise. The executor must take out the Grant of Probate on behalf of the deceased to begin the process of administering the estate, and an Inheritance Tax form must be submitted before this can be taken out. This task can be delegated to our Private Client solicitors who would be happy to accept instruction in dealing with the administration of an estate.

The Role of Administrator

Unlike an executor, the administrator of an estate is not appointed by the deceased, but rather has to apply to the court to act as administrator. This arises when the deceased dies without a Will, and their estate is therefore governed under the rules of intestacy. Anyone with a satisfactory entitlement to act – such as a spouse, a child or close relative – can apply to the Court to act as administrator, and the Court may appoint more than one administrator to act jointly. The responsibility to administer the estate is similar to the responsibilities bestowed upon the executor of an estate, with the primary difference being that the administrator has to apply to the court for a Grant of Letters of Administration, instead of a Grant of Probate. The administrator is also obligated to divide the estate in accordance with the intestacy provisions under the appropriate legislation, depending on the jurisdiction in which the individual died.

Inheritance Tax

Most estates of a modest value do not have to pay any inheritance tax, but due to the modern value of property, many estates still have to submit an Inheritance Tax return. If there is an inheritance tax form to submit, then this must be stamped by the Revenue authorities and returned before the Grant of Probate or Grant of Letters of Administration can be extracted. This can pose a substantial bottleneck to proceedings, especially if you are unaware of the extent of the deceased’s possessions. Private Client solicitors are trained in the intricacies of Inheritance Tax law and will be able to assist in the submission of an Inheritance Tax return; they will be aware of which exemptions and reliefs may apply in each case, and will facilitate the payment of any tax due from the estate.

Trusts

Occasionally, the Will of a testator will leave certain property or assets under trust. Holding property or assets under trust is a complex legal principle. Essentially, the settlor (the person who owns the property) transfers their property to a third party (the trustee) for the benefit of their desired beneficiary. Trusts can exist to cover any type of property, pension funds, bank accounts or stocks and shares. Trusts are important for estate planning, as they may be treated differently in terms of tax liability. This is because the trust property may be held as a separate entity outside of the deceased’s estate. Trusts can also safeguard assets for children who are too young to inherit, with the property being retained until the beneficiaries reach a specific age. The trustees may have the power, for example, to invest or dispose of trust property, depending on the provisions of the trust. This is a very general overview, with the specifics depending on the individual circumstances of each trust. Our Private Client team will be able to best advise in relation to which trust will work best for your individual circumstances, as well as ensuring that the correct powers are bestowed upon the trustees.

The administration of the estate of a loved one can be a lengthy and emotionally taxing process. The burdens placed upon the shoulders of the executor or administrator of an estate are heavy, and the responsibility of an executor should not be underestimated. However, this burden does not need to be carried alone — our Private Client team are well-versed in the administration of estates, the steps which must be taken throughout the process, and the eventual distribution of assets. Instructing a solicitor to assist with the administration can help streamline the process and protect your interests as executor or administrator from any legal or administrative challenges which may arise.