How to wind up an estate: a step-by-step guide for executors

What an executor is responsible for

An executor is appointed by the will to carry out its terms. Your duties begin when the person dies, not when probate is granted. From that point, you are personally responsible for:

• Identifying and protecting all estate assets.
• Paying all valid debts and liabilities.
• Dealing with all tax obligations.
• Distributing what remains to the beneficiaries in accordance with the will.

You can be held personally liable if you distribute the estate incorrectly, miss a creditor, or make errors in tax returns.

Step 1: The days immediately after death

Before you can do anything formal, you need the death certificate. The death is registered with the local register office. You will need certified copies, not photocopies. Order more than you think you need.

Your first practical tasks:

• Secure the deceased's property. Change locks if necessary and ensure any property insurance remains valid. Many policies lapse or are void for unoccupied properties after 30 days, so contact the insurer immediately.
• Cancel regular outgoings such as direct debits where it is safe to do so, but do not close accounts yet.
• Forward post if the deceased lived alone.
• Notify the deceased's bank that the account holder has died. Accounts will be frozen pending probate.

Step 2: Locate and secure the will

Confirm you have the most recent, signed original will. Check for any codicils (formal amendments to a will). A later will or codicil may revoke earlier provisions.

If you cannot locate the original, check with the solicitor who drafted the will, the National Will Register (Certainty) at certainty.co.uk, or among the deceased's personal papers. If you find multiple wills, the most recent one that was validly executed takes effect.

Step 3: Identify and value all assets and liabilities

You need to build a comprehensive picture of everything the deceased owned and everything they owed. This is called the estate inventory.

Assets to identify

• Property. Obtain the Land Registry title register. Note whether it was held as joint tenants (passes automatically to the survivor) or tenants in common (the deceased's share forms part of the estate). You will need a formal valuation for probate purposes.
• Bank and building society accounts. Write to each institution with a death certificate and ask for the balance at date of death.
• Investments and shares. You will need a date-of-death valuation for each holding. For shares listed on the London Stock Exchange, the probate value uses the “quarter-up” rule. This applies to listed (quoted) shares only. Unquoted shares, unit trusts, and OEICs require a different valuation method; seek advice from a specialist share valuation expert or contact HMRC's Shares and Assets Valuation team.
• Life insurance and pensions. Policies written in trust do not form part of the estate. Pension death benefits are usually discretionary and also typically sit outside the estate.
• Personal possessions. Household contents, vehicles, jewellery, and other personal effects must be included.
• Digital assets. These include cryptocurrency, online savings accounts, and digital business interests. Check the deceased's email and browser bookmarks for clues.
• Money owed to the deceased. Outstanding loans, unpaid salary, benefits, or tax refunds.

Liabilities to identify

• Mortgages.
• Credit cards and personal loans.
• Utility arrears.
• Outstanding tax liabilities.
• Funeral costs (a priority debt paid from the estate).

Step 4: Inheritance Tax

Inheritance Tax (IHT) applies when the net value of the estate exceeds the nil-rate band. The standard nil-rate band is £325,000 (as of May 2026; frozen until at least 2030 under current legislation — verify the current figure at gov.uk/inheritance-tax). A residence nil-rate band of up to £175,000 may also apply where a main home is passed to direct descendants. The RNRB tapers by £1 for every £2 by which the net estate exceeds £2 million, so it may not be available for larger estates. Always verify current thresholds at gov.uk/inheritance-tax before submitting any IHT return.

Assets passing to a spouse or civil partner are generally exempt from IHT. For estates where IHT is due, tax must normally be paid within six months of the end of the month in which the person died. This creates a practical difficulty: you usually cannot access estate funds until probate is granted, but probate will not be granted until HMRC is satisfied. Solutions include:

• Using the Direct Payment Scheme, where banks release funds directly to HMRC before the grant is issued. Participation in the scheme is voluntary for financial institutions — confirm with each bank that they participate before relying on this mechanism.
• Paying by instalments over ten years. If the IHT relates to land, buildings, or certain unlisted shares, you may be able to pay by annual instalments rather than in a single payment. Interest applies to outstanding instalments. See gov.uk/inheritance-tax for current guidance on which assets qualify.

Step 5: Applying for the Grant of Probate

Once you have the IHT form completed, you can apply for the Grant of Probate. This is the court document that confirms your authority as executor. Applications can be made online at the HMCTS probate service or by post. You will need:

• The original will (and any codicils).
• The original death certificate or a certified copy.
• The completed IHT form.
• The probate registry application fee (£273 as of May 2026; check the current fee at gov.uk/court-fees before applying).

Step 6: Advertising for creditors

After obtaining the grant, you should place a notice in The Gazette and in a local newspaper. This is known as a Trustee Act 1925 notice. It invites creditors or claimants to come forward within at least two months. If a creditor does not respond within that period and you have already distributed the estate, you are personally protected from a later claim. Many executors overlook this step, but it is worth doing for larger estates or where the deceased ran a business.

Step 7: Paying debts in the correct order

Debts must be paid in a specific order of priority:

1. Secured debts (for example, a mortgage on a property in the estate).
2. Funeral, testamentary, and administration expenses.
3. Preferred debts (certain employment-related debts).
4. Unsecured debts (credit cards, personal loans, utility arrears).
5. Interest on unsecured debts.
6. Deferred debts.

The priority order above applies to solvent estates under the Administration of Estates Act 1925. If the estate is insolvent (debts exceed assets), a different statutory order applies under the Administration of Insolvent Estates of Deceased Persons Order 1986. If you are not certain the estate is solvent, take specialist legal advice before paying any creditor. Do not distribute anything to beneficiaries before all debts are settled.

Step 8: Income Tax and Capital Gains Tax during administration

The deceased's personal tax affairs must be finalised for the year in which they died. During the administration period, the estate itself may generate income and capital gains. Income arising during the administration period is subject to Income Tax. Capital gains on assets sold are subject to Capital Gains Tax. Executors have the benefit of a full annual CGT exempt amount in the year of death and the two following years.

Step 9: The Executor's Year

Executors are generally given 12 months from the date of death to administer an estate before beneficiaries can require distribution. The Executor's Year does not mean you must wait a year. It means beneficiaries cannot bring a claim against you for failing to distribute within that period. Straightforward estates can often be wound up in four to six months.

Step 10: Interim and final distributions

Where administration is taking longer than expected, or where a large liquid sum is available but the estate cannot yet be fully wound up, you may make interim distributions to beneficiaries. Retain a sensible reserve to cover outstanding tax liabilities, potential creditors, and administration costs. Keep clear records of every interim payment and obtain written receipts.

When the estate is fully administered, make the final distribution and obtain a final receipt and release from each beneficiary. This confirms they have received what they are entitled to and releases you from further liability.

Step 11: Estate accounts

Before making the final distribution, prepare formal estate accounts showing: all assets at date of death with their values, all income received during the administration period, all payments made (debts, tax, expenses), and the residue available for distribution. Beneficiaries are entitled to see estate accounts and should sign them to confirm they approve the figures.

Common executor mistakes

• Distributing before all debts and taxes are settled. You become personally liable for any shortfall.
• Missing Inheritance Tax deadlines. Interest on late IHT adds up quickly.
• Failing to advertise for creditors. This leaves you exposed to claims from unknown creditors after distribution.
• Treating jointly owned assets as part of the estate. Assets held as joint tenants pass by survivorship and are not part of the estate to administer.
• Not taking professional advice for complex estates. The cost of professional help is usually modest compared to the cost of errors.

Further reading