Can I do this estate administration myself?

phillips101

First time administering an estate so please bear with me.

My father passed, his wife (my mother) survives. He owned the house outright, and all savings and house were in his name only. The estate is over the IHT threshold.

I have three siblings.

My father did not leave a will.

My siblings and I have agreed that my mum should inherit everything, against the rules of intestacy.

The assets and debts are relatively simple: House, cash, premium bonds, minor credit card debt, car mechanic 0% loan.

We have all agreed that I will be administering the estate, not my Mum who we know has "first refusal".

So as I understand it my todo list is:

1. Get my mum to sign something (?) saying she agrees I should be the administrator
2. Get a deed of variation for me and all siblings
3. Value the estate
4. Submit letters of application 
5. Wait
6. When granted, contact all relevant parties and distribute everything (all to my mum)
7. Deal with the land registry, changing name from dad -> mum

My questions:

1. Are these all steps I can do myself? I have received absolutely ludicrous quotes from solicitors for even the most minor of help. I think they hear "above the IHT threshold" and see £ signs, despite the fact the estate is cash-poor
2. Is there a specific format or template I can use for 1&2?
3. What do I do with debts in the meantime, before anybody has the power to administer the estate? EG credit card payments, or monthly loan repayments. Do they stop? Does interest accrue? Or should we let them tick along?
4. How do I "submit" deeds of variation? Alongside the letters of administration? Ideally we wouldn't pay IHT at all, rather than pay it and then get a refund later, but I don't know

Thank you for any help, I am absolutely lost

phillips101

Sorry I should also ask:

1. What exactly are the risks of being the administrator/executor? I know I may become liable for IHT, but even if the deeds of variation are invalid I can afford that and it would be relatively minimal anyway. Are there any other risks?
2. An additional complexity is a historic IHT-relevant gift 5 years ago, but I assume that will be easy to specify on a form somewhere

AP3

My take on this is if everything is being left to a surviving spouse (i.e. married) then it is an exempt excepted estate and no IHT is reportable or payable. You'll still need to provide the estate values, but that is simply done when applying for probate.

phillips101

AP3 said:

My take on this is if everything is being left to a surviving spouse (i.e. married) then it is an exempt excepted estate and no IHT is reportable or payable. You'll still need to provide the estate values, but that is simply done when applying for probate.

That is correct as I understand it too. But there is tax due to the intestacy default rules, and a historic gift. I am struggling to piece together how deeds of variation come into it, and where or when they are submitted.

All info I can find about them seem to imply you do them later, long after you are the executor, which means they come long after the declaration of what IHT is payable.

Keep_pedalling

phillips101 said:

First time administering an estate so please bear with me.

My father passed, his wife (my mother) survives. He owned the house outright, and all savings and house were in his name only. The estate is over the IHT threshold.

I have three siblings.

My father did not leave a will.

My siblings and I have agreed that my mum should inherit everything, against the rules of intestacy.

The assets and debts are relatively simple: House, cash, premium bonds, minor credit card debt, car mechanic 0% loan.

We have all agreed that I will be administering the estate, not my Mum who we know has "first refusal".

So as I understand it my todo list is:

1. Get my mum to sign something (?) saying she agrees I should be the administrator
2. Get a deed of variation for me and all siblings
3. Value the estate
4. Submit letters of application 
5. Wait
6. When granted, contact all relevant parties and distribute everything (all to my mum)
7. Deal with the land registry, changing name from dad -> mum

My questions:

1. Are these all steps I can do myself? I have received absolutely ludicrous quotes from solicitors for even the most minor of help. I think they hear "above the IHT threshold" and see £ signs, despite the fact the estate is cash-poor
2. Is there a specific format or template I can use for 1&2?
3. What do I do with debts in the meantime, before anybody has the power to administer the estate? EG credit card payments, or monthly loan repayments. Do they stop? Does interest accrue? Or should we let them tick along?
4. How do I "submit" deeds of variation? Alongside the letters of administration? Ideally we wouldn't pay IHT at all, rather than pay it and then get a refund later, but I don't know

Thank you for any help, I am absolutely lost

I think you are all doing the right thing here in letting your mother benefit from all the marital assets. Yes you can do this yourself, but I would have a second sibling on the application just in case something happens to you during the estate administration.

Your mother does not need to sign anything, but the deed of variation needs to be made. You can get on line templates but I would get a solicitor to draft this. It must be done within 2 years but I would get that done early as it is the thing that prevents you having to do an IHT return. 

As for debts, write to the creditors to inform them of his death and that you are administering the estate and applying for probate. Ask for a final statement of the debt and include a copy of the death certificate. 

You will probably need probate to get the premium bonds released but any cash accounts in banks or building society accounts should be released without it which will hopefully cover any funeral costs.

Once you have the all the values for assets and debts you can apply for letters of administration (probate for estates with no will) on line. 

https://www.apply-for-probate.service.gov.uk/start-eligibility

Keep_pedalling

phillips101 said:

Sorry I should also ask:

1. What exactly are the risks of being the administrator/executor? I know I may become liable for IHT, but even if the deeds of variation are invalid I can afford that and it would be relatively minimal anyway. Are there any other risks?
2. An additional complexity is a historic IHT-relevant gift 5 years ago, but I assume that will be easy to specify on a form somewhere

The main risks are with insolvent estates which this is not. 

As long as the total gifts in the last 7 years do not exceed £325k there will be no IHT complications. All they will do is reduce the amount of transferable NRB available for your mother’s estate. The gifts do get added to the gross value of the estate for IHT purposes and you need to provide this on the probate application.

phillips101

Thanks for your replies I appreciate it.

I've contacted a solicitor about only drafting the deeds of variation - will see what the quote is.

> As long as the total gifts in the last 7 years do not exceed £325k there will be no IHT complications. All they will do is reduce the amount of transferable NRB available for your mother’s estate. The gifts do get added to the gross value of the estate for IHT purposes and you need to provide this on the probate application.

This is great, I did not know this. Should make everything simpler.

Thanks again for your advice