What is meant by the administration of an estate?

When someone dies, everything they owned (money, property, possessions, and other assets) becomes part of their estate. The process of dealing with these assets and liabilities, following the law and the wishes set out in the Will, is called administration of an estate. It is a legal and often detailed process that ensures debts are settled, taxes are paid, and the remaining assets are passed on to the people entitled to inherit them.

Who carries out the administration?

The person responsible depends on whether there is a valid Will or not.

• If there is a Will, the named Executor is responsible for administering the estate.
• If there is no Will, the court appoints an Administrator (usually the closest relative) to take on the role.

Executors and Administrators have similar responsibilities, but their authority comes from different legal documents. An Executor’s authority comes from the Will, confirmed through a Grant of Probate. An Administrator’s authority comes from Letters of Administration. 

What does the process involve?

Estate administration can be broken down into several key steps:

1. Identifying assets and liabilities - This means locating bank accounts, investments, property, pensions, and personal belongings, as well as confirming any debts such as loans, mortgages, or credit cards.
2. Valuing the estate - Accurate valuations are essential for calculating Inheritance Tax and for fairly distributing assets.
3. Applying for the right to administer the estate - This usually means applying for probate (if there is a Will) or letters of administration (if there is not).
4. Paying debts and taxes - All outstanding debts, funeral costs, and any Inheritance or Income Tax due must be settled before distributing the estate.
5. Distributing the estate - The remaining assets are distributed according to the Will or, if there is no Will, according to the rules of intestacy.

How long does it take?

The administration process can take months or even more than a year. Factors that can extend the timeframe include:

• Complex estates with multiple properties or investments;
• Disputes between beneficiaries;
• Delays in selling property;
• Waiting for HMRC to confirm Inheritance Tax clearance.

Why is estate administration important?

Administration ensures that:

• Beneficiaries receive their correct inheritance.
• All legal and tax obligations are met.
• The deceased’s wishes are respected.

Without proper administration, disputes can arise, assets can be mismanaged, and Executors or Administrators may face legal consequences.