5. Deal with the money
Make a plan
This is the time to get final answers on any legal rights claims.
If the estate owes more than it has in assets, the estate is considered to be insolvent. In this case, you must be very careful which order things are paid in. You may want to hire a lawyer.
Assuming there is enough money in the estate to cover all debts and expenses, you should find out if any residual beneficiaries would like any of the assets as part of their inheritance before you sell them.
Do not pay out any money or transfer anything to anyone yet.
Changing a will
At this stage, it’s worth considering whether it would be advantageous to change the terms of the will if there is one.
Sell or transfer assets
Once you’ve worked out which assets you are going to sell and if any are being transferred into someone else’s name, you can go ahead and do it. Often companies will want you to fill in a form that clearly indicates what is supposed to happen to the money/asset.
If you’re dealing with a property sale or transfer, it is highly recommended to seek professional help. For selling properties, the market is very competitive so it’s worth shopping around. There are some online options that allow you to do most of the legwork yourself, meaning the price is very low.
Pay off expenses and debts
If you, or anyone else, paid for anything to do with the estate out of your own pocket, now is the time to pay those expenses back.
This could include:
- any funeral or wake costs
- stationery and stamps
- professional, court or other service fees (like our confirmation forms service)
- anything else related to dealing with the estate
After expenses, come debts (including taxes). It’s likely that interest has been accruing on certain types of debts so you’ll need to ask for an up-to-date balance. Companies usually make it very easy to pay off debts so if you’re unsure of what to do, call them. For your records, try and get some kind of proof that the debt has been paid.
If there isn’t enough money in the estate to pay off all the expenses and debts, you need to be careful about the order you pay debts off in. It can be a good idea to hire a lawyer in these types of cases.
It’s worth noting that usually individual debts do not get passed on. Joint debts will, however, pass to the ‘survivor’.
Unless you were in control of the deceased’s finances before they died, it is recommended to wait a minimum of 6 months from the date of death before paying out ANY inheritances to allow unknown creditors to make a claim against the estate. After this time period, they will have to try and recover the money from the beneficiaries instead of you.
For this reason, unless you are certain there are no unknown debts, it can be worth waiting the 6 months to transfer any assets to beneficiaries in case they are needed to pay off debts.