Death of surviving parent what to do ?

TattyP

Looking for some guidance please …… 
Dad passed away in 2004 leaving his entire estate including his main residence to mum. Mum passed away last week without a will. I have 3 siblings. Does her estate automatically pass down to us 4 & what is the likelihood of inheritance tax. Property value approx 700k with a small outstanding mortgage of 50k she also has approx 100k in her accounts. 

If it does pass down to us what is the process that we need to follow regarding probate etc? Do we need to involve a solicitor or is it possible to sort everything out between us ? 

Thank you in advance 

poppystar

Under intestacy the estate would be shared by the children, so yes.
Assuming mum and dad were married then there should be no inheritance tax to pay.
You will need to fill in full inheritance tax forms because you will need to claim residential tax allowance as well as the allowance transferred from dad. This will give you a total allowance of £1m 
One of you will have to apply for Letters of Administration in order to deal with the estate too ( that is the equivalent of Probate but applies where there is no Will) 

Hopefully you have a good relationship between the siblings so can find the best fit for taking on the responsibilities, clearing the house etc. lots of help here when you need it.

Keep_pedalling

Her estate passes by the laws of intestacy so it will to the four of you (assuming you have no deceased siblings who had children). There will be no inheritance tax as you will be able to claim the transferable nil rate bands from your father (assuming there were married at the time of his death) but because you are going to have to claim at least one residential NRB you are going to have to complete a full IHT return.

Because she did not make a will you will need to apply for letters of administration rather than probate although the process is almost identical. Although this might seem daunting you should be able to do this yourselves and you will get lots of help on here if you get stuck.

A good tarting point would be to read through IHT400 to see what information you will need to provided and what supplementary forms will be required.

pjs493

Others have answered up above so I won't repeat what they've posted. 

But one tip to keep in mind (once you've decided which sibling is going to deal with the finances) is to keep paying the mortgage. Any credit cards or loans will freeze on the date of death so no interest will accrue on those, but the mortgage still accrues interest even after death. The mortgage company may offer to freeze repayments, but, if you are able, I'd suggest continuing to make regular payments or make the maximum overpayment that they will allow to keep the interest down.

My husband recently died and everything was left to me in his Will (except a charitable donation and some sentimental bequests). He had a rental property with a small mortgage left on it and I made the maximum overpayments to reduce the interest. I could have cleared the mortgage immediately but would have had to pay the exit and admin fees. I've just been granted Probate so once the mortgage company receives a copy, I can pay off the mortgage without attracting the fees.

Every mortgage company will be different and it might be a case of weighing up what makes most financial sense, re: interest rates, exit fees, etc depending on what the mortgage company's policy is. Often mortgage companies will allow the balance to be paid in full if it's coming to the end of the mortgage period (eg if your parents had a 25 year mortgage and only had 5 years left to go), so it's worth exploring your options. I looked into it and worked out that what I did made the most financial sense for my situation. It's ultimately saved me about £3000.

Flugelhorn

You mentioned that Dad;s estate was all left to mum - was this via intestacy or via a will? if it was a will, are you absolutely sure she didn't have a will too as they are often done for couples at the same time

TattyP

Thank you for the above advice at least we now have a starting point but one other question (at the moment I’m sure there’ll be more…..) at the point at which we notify the bank what happens to the payments for utilities for the house until it is sold & the mortgage payment? Do one of us have to pay them or will it be allowed for them to still come from mums account ? 

Thanks again 

RAS

Mum's accounts will be frozen.

How much did mum have in the account? Even without probate, many banks will release quite large sums, up to £50k without probate. If you have a spare account or can set up one with allows a couple of administrators to view it, you transfer money from one or existing accounts and sort out the mortgage.

Utilities will freeze collection until probate is granted. 

Make absolutely sure you have unoccupied building and contents insurance and understand what the requirements round heating, water and visiting are, particularly at this time of year.

kipsterno1

Sorry for your loss. I found this forum an excellent point of reference and spent along time reading past posts and asking the odd question enabling me to work through the probate process.

Any organisation you need to contact go via their bereavement department. Most have one and banks and utilities definitely do. Utilities will put a stop on the accounts and then any payments owed can be paid via the estate once everything is in place.

Most important take time for yourself and accept that sometimes the wheels of administration turn very slowly.

thegreenone

Sorry for your loss.

Do you and your siblings all get on well?  I ask this because it would be advisable to sit round a table and go through everything.  Give everyone a job and everyone reports back, perhaps set up an email address to report into?

My husband and his sister did this when their Dad died and it worked well.  Just a thought.

SacredStephan

RAS said:

Make absolutely sure you have unoccupied building and contents insurance and understand what the requirements round heating, water and visiting are, particularly at this time of year.

My unoccupied buildings policy specifies two working smoke alarms.

To the OP, if Mum had a car, be aware that the insurance will cease on the death of the policyholder.