How do you locate assets when dealing with an estate?

When someone passes away, their assets all require to be dealt with – and must of course all be taken into account when calculating any inheritance tax that may be due. This can be straightforward if those dealing with the estate (the Executor and/or any solicitor they have instructed) know about the estate, or if the deceased left a list of assets or even a good filing system from which the asset details can be taken.

Sometimes it is just not clear what assets make up the estate, whether that is because the deceased was a particularly private person, their organisational skills left a little to be desired, or perhaps even because everything was largely dealt with online, with no physical paperwork being accessible to provide details. Occasionally the appointed executor will just not have knowledge of the estate assets due to their relationship to the deceased, for example if a solicitor is appointed. So what can be done to try and locate all of the estate – and why does it matter so much?

When dealing with an estate, the executor has an obligation to report and administer all of the estate. When applying for Confirmation to the estate (the legal documentation which gives them authority to administer assets) the executor is declaring that the details given here are correct and complete – and there is a rather scary “warning” on the relevant form advising executors that they may be liable if they do not make full enquiries and include all property in the papers. In addition, the estate may be subject to inheritance tax and this is calculated on the value of the estate assets at date of death. The executor has a duty to calculate this – and of course their calculation would be incorrect if they have overlooked any assets.

What happens if an asset is missed after Confirmation is granted?

If assets are discovered after Confirmation has been granted and the inheritance tax implications checked and tax paid, some action is required to rectify matters. Firstly, the missed asset(s) will not be on the grant of Confirmation and, depending on the requirements of the asset holder, you may need to apply for an amendment (an “eik”) to be made to the Confirmation. This act will slow the estate administration and result in further expense. Secondly, the inclusion of an additional asset(s) will likely increase the IHT due and, there is potential for that additional tax to be paid late, which could lead to penalties and interest being levied by HMRC.

There is also the issue of closure. Dealing with a deceased’s estate can understandably be a difficult time for the family and those closest to the deceased.  If assets keep being discovered over time then matters will continue perhaps unnecessarily, so putting the time and effort in initially to ensure all assets are tracked down can save time, expense and upset later.

So how can an Executor be sure they have found all of the assets?

In order to meet their obligations and administer an estate as efficiently as possible, executors should exhaust all avenues to locate the deceased’s assets.  If they have reason to believe there might be other assets, they should endeavour to look into these. Papers should be checked, both existing papers and mail received post-death and bank statements reviewed to check for any indicators.  Debts and income sources, must also be ascertained. If there is a concern that the known assets possibly don’t represent a full picture of the estate, there is always the option of an asset search being instructed. There are a number of companies who provide such services, which can provide peace of mind, particularly when the Executor doesn’t know the deceased well.

It goes without saying that having your affairs in order and/or discussing matters with your Executor prior to your death can avoid issues once your Executor takes over the administration. Harper Macleod’s Private Client team are experts in the administration of estates and can advise on all aspects of the role of Executor.