Managing finances in bereavement

At a glance

• The executor is the person responsible for carrying out the wishes set out in the Will.
• Probate is the legal process of distributing someone’s estate (their cash, property, assets and possessions) after they die.
• If inheritance tax (IHT) is due on an estate, this must be paid to HM Revenue and Customs (HMRC) by the end of the sixth month after the person died (interest accrues on an unpaid bill after this deadline).

After losing someone close to you even simple tasks can feel overwhelming – and dealing with finances can be hardest.

But you don’t have to tackle everything at once. When you feel ready ask a family member or friend to help you.

There are some practical and legal steps to go through. While these can feel daunting, taking it one step at a time can make things more manageable.

What is an executor?

Being named as an executor is an important role, and it can feel like a big responsibility — especially at an already difficult time.

It involves tasks such as organising the funeral, managing assets, settling any debts, paying any inheritance tax due and distributing what’s left to beneficiaries.

Many people choose to get support from a solicitor, accountant or financial adviser, particularly if the estate is complex. You don’t have to do everything on your own.

If someone dies without a Will (known as dying intestate) an administrator will need to be appointed. This will usually fall to the closest living relative.

Here are the steps involved when dealing with an estate:  

Step one: Tell financial providers

Among the first jobs for an executor is to get the death certificate and organise the funeral (the expenses for which can be taken out of the estate if there are sufficient funds).

The executor should inform all relevant bodies and organisations, such as banks, insurers, pension providers, and local and central government (for State pension, benefits and tax, for example).

This task can be incredibly difficult, depending on the circumstances, so getting someone to help you and taking your time, working through a list of priorities, can make things easier.

Tell providers if you need more support. Last month the regulator, the Financial Conduct Authority (FCA), said it was reviewing how investment companies deal with bereaved customers. It follows the FCA’s previous work with banks and building societies, which found problems and delays are common across the industry when dealing with vulnerable and bereaved customers.¹

The government’s ‘Tell Us Once’ service is a way to inform local and national government departments about a death, without having to inform each organisation individually. It covers local council tax departments and the electoral register, as well as HMRC, the Department for Work and

Pensions, the DVLA, and the Passport Office, among others.

For bank accounts, savings, investments and pensions, you’ll need to show the provider the death certificate so it can begin the process of closing the account and transferring funds to the executor. 

Each provider will have their own process, and many will have a dedicated bereavement team who can help you through the necessary steps. Ask for extra help if you need it.

Extra paperwork may be needed for some types of assets, such as ISAs and pensions. ISA savings can usually be transferred to a spouse or civil partner, preserving their tax-efficient status, for example. But there are specific rules and requirements for this.

Step two: Value the estate and apply for grant of probate

Probate is the formal, legal process by which an estate is passed on to beneficiaries.

If a spouse dies and leaves their estate (including shared property and shared accounts) to their surviving spouse (or civil partner) then sometimes probate may not be needed. But in most situations probate is necessary and advisable, even for smaller-sized estates. This is because probate is legally binding and protects beneficiaries from subsequent disputes by other potential heirs. 

Probate is also usually required for solely owned and higher value assets, even where the intention is that they are passed to a surviving spouse.

However, before the executor can apply for the grant of probate (grant of confirmation in Scotland) they’ll need to value the total estate. If inheritance tax (IHT) is due on the estate, the estate valuation must be provided to HMRC within one year of the death. Despite this, the tax itself is due six months after the death, in some cases before people will have secured a formal valuation. There is more on IHT below.

There are a range of other circumstances where an estate value will need to be reported to HMRC, including where substantial gifts have been made within seven years prior to the death, or where the deceased had foreign assets worth more than £100,000, for example. More information on when an estate must be reported to HMRC is available on its website.

You can apply for probate online or by post (noting that depending on the circumstances, such as not having the original Will, it may sometimes not be possible to apply online).

At this point it may be preferable to set up an executor’s bank account. This is to keep any money from the estate (which is in the process of being transferred to the executor) separate from the executor’s own finances.

Step three: Payment of inheritance tax

Executors of an estate are responsible for reporting when inheritance tax (IHT) is owed on an estate, as well as paying the tax bill.

IHT must be paid to HMRC by the end of the sixth month after the death. If payment is late interest will accrue on the tax bill. The current interest rate (accurate as of date of publication) is 7.75%.

The exception is where the executor makes a request to pay the IHT in instalments. This may be necessary where assets, such as a property, take some time to sell and there are insufficient funds to pay the tax bill. HMRC will accept payment by annual instalment for up to 10 years, where a request is made, but interest is charged on the instalments.

For IHT on estates for deaths after 6 April 2026 onwards, instalments are interest-free if the asset qualifies for agricultural relief or business relief.

Pensions and IHT

From April 2027, unused pension assets will fall into a deceased’s estate for IHT purposes. This means executors (and administrators of an estate) will need to get valuations of all eligible pension assets before calculating the tax due on the total estate.

Step four: Distribution of the estate

Once IHT has been paid in full the executor can distribute the estate to beneficiaries as laid out in the Will. This is likely to involve transferring ownership of some assets, for example, which can be done by sending the grant of probate to the relevant providers.

Consider closing the executor bank account once the estate has been distributed. This avoids the potential for fraudsters to access the account.

Asking for help

If you have recently lost someone close to you, it is likely to be particularly difficult dealing with their finances on top of everything else.

Ask for help when you need it, whether that’s from individual financial providers, such as banks and insurers, your financial adviser, or a solicitor.

Advice in relation to probate involves the referral to a service that is separate and distinct to those offered by St. James’s Place and not regulated by the Financial Conduct Authority.Tax treatment depends on individual circumstances and may change over time. The value of any tax benefits or reliefs will therefore vary from person to person and cannot be guaranteed.

Source

¹ FCA reviews whether investment firms are doing enough to support bereaved customers. Financial Conduct Authority – 13 May 2026.

SJP Approved 18/06/2026