An Administrator of an Estate is a person legally appointed by the Court to deal with the Estate of a deceased person.
This could be because the deceased didn’t leave a Will. There was a Will, but there was no appointment of Executors because the Executors named were unable or unwilling to act.
The role involves tax, legal and administrative work. This includes valuing the Estate, calculating and paying Inheritance Tax, contacting the beneficiaries, settling outstanding debts, collecting assets, and distributing the Estate to the beneficiaries.
Who Takes on the Role of Administrator?
The person entitled to be the Administrator is determined under the non-Contentious legislation Probate Rules 1987 and principally under the Administration of Estates Act 1925. Commonly, this is referred to as the Rules of Intestacy.
These rules consider the value of the deceased’s Estate and the family members they left behind.
Under the Rules of Intestacy, relatives of the deceased will be placed in order of priority. Starting with their spouse or civil partner, the person at the top of the list is entitled to take on the administrator role.
This differs from the appointment of an Executor, who is appointed under a Will. The role of Executor and Administrator are the same. The only difference is how they are appointed.
Administrator Tasks Explained
Valuing the Estate
One of the first tasks of the Administrator will be to value the Estate. To do this, they will need to contact the various asset holders (such as banks, pension providers, etc.) to obtain the asset’s value at the date of death.
In addition, the Administrator will need to go through all of the paperwork the deceased holds to ensure that all assets are identified.
They will also need to arrange any professional valuations which may be required, such as for property or high-value personal items.
They will also need to make sure that the assets are secure. For example, if there is a property in the Estate, they will need to ensure that there are sufficient buildings and contents insurance in place. Therefore, the insurer must be made aware if the property is unoccupied.
They will then need to calculate the value of any liabilities (debts and mortgages) of the Estate. The value of these liabilities will need to be deducted from the value of the assets to calculate the overall Estate value.
When the Estate has been valued, the Administrator can then calculate whether any Inheritance Tax is due.
Applying for the Grant of Letters of Administration
Once the Inheritance Tax has been calculated, the Administrator can complete the relevant Inheritance Tax Return and apply to the Probate Registry for the Grant of Letters of Administration.
This document gives the Administrator the legal authority to deal with the Estate, including closing the deceased’s bank accounts and selling their property.
When the Grant of Letters of Administration has been issued, the Administrator has a legal duty to administer the Estate correctly and efficiently.
Placing a Statutory Advertisement
To protect the Administrator from liability, they should consider advertising for potential unknown beneficiaries and creditors to come forward.
This can be done by placing a Statutory Advertisement in the London Gazette and a local newspaper where the deceased lived.
The advert must give potential claimants at least two months to come forward. The crucial point is that the Administrator must not distribute the Estate until the adverts have expired.
Collecting in Assets
The Administrator will be responsible for collecting all of the assets of the Estate. This may include selling any property which forms part of the Estate.
The formalities for collecting the assets will vary depending on the type of asset. For example, bank accounts can usually be closed by completing the closure form issued by the bank.
This will need to be signed by the Administrator and submitted to the bank with a sealed copy of the Grant of Letters of Administration.
Settling Debts and Paying Inheritance Tax
The Administrator must also pay any debts as quickly as possible, including settling any Inheritance Tax that may be due.
The debts of the Estate must be paid before any distributions are made to the beneficiaries.
The Administrator is responsible for calculating any outstanding income tax liability of the deceased up to the date of death, so they will need to ensure this is paid out of the Estate.
The calculated outstanding income tax that the Estate has incurred during the administration period.
Equally, suppose any assets are sold during the Administration which has had a significant gain from the date of death. In that case, the Administrator is responsible for calculating and settling any Capital Gains Tax.
Distributing the Estate
Finally, the Administrator ensures the Estate is distributed correctly to the beneficiaries. In addition, they should keep detailed Estate Accounts which give a clear and accurate statement of the Estate.
The accounts should detail all of the assets of the Estate and what has happened to each one, as well as any expenses and liabilities that have been settled from the Estate.
The residuary beneficiaries should be given a copy of the Estate Accounts for their records.
Help and Advice from a Probate Specialist
It’s important to note that whoever takes responsibility for conducting the role of Administrator could be held personally liable for any mistakes made.
The above is general guidance of what an Administrator is typically required to do during Probate, but these tasks can vary depending on the circumstances of each individual Estate.
If you are acting as the Administrator of an Estate and you’re unsure of what’s involved, or you need help with the Probate work, our Probate Specialists are on hand to help you.
Our Probate Advisors can provide you with the initial advice. With our Probate Complete Service, we can take full responsibility for conducting the tax, legal and administrative work on your behalf.
