Financial decisions to avoid immediately after someone dies

General

It is always an emotional time after someone passes away. Before any decisions are made with regards to the administration of the estate, it is of paramount importance to establish who the executors are. You could be personally liable if you are not an executor of an estate but try to undertake some administrative tasks. The executors will be named in the Will and it will be important to establish that it is the last Will the deceased made.

When it comes to selling assets, the executors should be working closely with the benefi ciaries to see if they do want to liquidate some or all of the assets or whether they would rather have the assets transferred to them

Selling investments

There is no requirement to sell investments simply because you have inherited them. Before making any decisions, consider their value, your fi nancial goals and any potential tax implications. Selling investments that have increased in value since the date of death can trigger Capital Gains Tax, so seeking legal and fi nancial advice is recommended to ensure tax implications and any upcoming legislative changes are clearly understood.

Selling the family home

Before any sale is considered, I'd advise executors to get three market appraisals and then to liaise with the beneficiaries about which estate agents to instruct. For many people, inheriting a property can mean suddenly finding themselves responsible for a second home. Unlike cash or investments, a property can be difficult to divide between beneficiaries and often comes with emotional attachment, as well as ongoing costs such as mortgage payments, insurance, maintenance and council tax. For example, if several family members inherit a property, it may be worth agreeing whether one beneficiary wants to buy the others out, rather than automatically putting it on the market. Executors should also establish what debts, taxes and other costs need to be paid from the estate before distributing the proceeds.

Closing or moving money from bank accounts

The executor or administrator is responsible for the estate during the administration period, and funds may need to remain available to cover debts, expenses and tax before the estate is distributed.

Giving away money or belongings from the estate

The executors need to make sure all debts, taxes and any other liabilities have been discharged first. An inventory of contents and belongings should also be prepared. Only once this has happened can the money or belongings be distributed in accordance with the Will. However, it might be that the beneficiaries are happy for belongings to be given to charity rather than inheriting themselves. However, the executors should get the express consent of the beneficiaries to do so.

Cancelling insurance policies immediately

Insurance should not simply be cancelled without checking what protection is still needed. Some policies end when the policyholder dies, while others may need to be transferred or updated. In particular, properties can remain part of the estate for some time, so appropriate cover may still be essential while they are being dealt with.

Rushing to invest an inheritance

Receiving an inheritance can be an emotional experience, so there is no need to make major financial decisions immediately. Take time to understand what you have received, consider your wider financial position and think about what you want the money to achieve before investing.

If you need help understanding what to do next, our Private Wealth & Succession team can guide you through the process.

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