After someone’s death, their personal representative has the task of finalising their affairs, commonly referred to as winding up their estate. This task includes preparing estate accounts setting out details of all of the deceased’s assets and liabilities.
Where the deceased left a Will, their executor, appointed in the Will, has the task of dealing with the estate administration. If there is no Will, then a close family member, often a spouse or child, can take on the role of administrator.
For more information about the tasks involved, see Who to appoint as executor to your Will.
Drawing up estate accounts
The accounts should start with details of the deceased, to include their name, date of death, date of the Will, if there is one, names of the personal representatives, a list of the beneficiaries and details of the legacies.
All assets should be listed together with valuations where these have been obtained. If the estate includes property, a valuation will be necessary. Other valuable items should also be professionally valued.
Debts should also be included, such as mortgages, loans, tax liabilities and balances outstanding on credit cards.
The accounts should include a capital account with information about any change in the value of the estate during the administration period, for example, adjustments if assets have been either over- or under-valued.
There will also need to be an income account showing income and outgoings during the administration. Expenses such as estate agency fees, solicitor’s fees and valuer’s fees should be included here as well as any interest that is received in respect of the deceased’s investments or on money held in the estate account.
The accounts will include a distribution account showing how much each beneficiary will receive. This sum should be sent to the beneficiary with a receipt for them to sign and return. Residuary beneficiaries, ie. beneficiaries who are entitled to receive a share of the estate once all of the debts and specific legacies have been made, are entitled to see the estate accounts.
Dealing with an estate administration is often very time-consuming and long-running. It can also be complex, where the deceased’s estate is not straightforward. Personal representatives need to deal carefully with the estate administration as they can be held personally liable for any mistakes which are made and that cause loss to the estate. This is the case even if the error is genuine. If you act jointly with another executor or administrator, you will also have liability for any errors they make.
If you are responsible for an estate administration on the Isle of Man, you can ask us to deal with the process on your behalf. We can take on the whole task of winding up the estate, to include valuing and disposing of assets, preparing estate accounts and distributing the estate to the beneficiaries. For more information in respect of our services, see Isle of Man estate administration.
If you are dealing with an Isle of Man estate administration and you would like advice and assistance, our experienced probate advocates will be happy to hear from you.