What is an estate? What it includes after someone dies and who deals with it
What counts in a person's estate after they die, what passes outside it, gross and net values, and what the personal representative has to do with it.
What is an estate when someone dies?
A person's estate is everything they owned when they died, less what they owed. GOV.UK's guide to dealing with the estate of someone who has died describes it as the money, property and possessions of the person who died, and the person dealing with it has to pay the debts out of those assets before passing on what remains to the people entitled to it, whether under the will or, where there is no will, under the intestacy rules.
The word matters because it marks out what the will, or the law, actually controls. Anything inside the estate is collected and distributed by the person in charge of it, whereas some assets pass directly to someone else when the person dies and never form part of it, which is why working out what is in the estate is usually the first real task after the funeral.
What does a deceased estate usually include?
GOV.UK's page on estimating the value of an estate lists the typical assets as:
the person's home and any other property or land they owned
money in bank and building society accounts and ISAs, and cash kept at home
stocks and shares, foreign assets such as property abroad, and cryptoassets
household and personal belongings, including vehicles
money owed to the person, such as unpaid wages or refunds from household bills
payments on death that are made to the estate, such as life insurance or a pension death benefit
The estate also carries the person's debts, which GOV.UK gives as including mortgages, loans, credit cards, overdrafts and household bills, and it counts the cost of the funeral as a debt too. Those are paid out of the estate before anyone inherits, so a house can leave rather less than its value once the mortgage is cleared. If the debts are larger than the assets the estate is insolvent, and our guide to what an executor does covers the personal liability the person dealing with it can face.
What sits outside the estate?
Some assets commonly pass outside the estate, and it helps to identify them early because they change what the will controls and how much there is to administer.
Jointly owned property and accounts. GOV.UK's guide to joint property ownership explains that where people own a home as joint tenants, the share of the owner who dies passes automatically to the surviving owner and cannot be left to anyone else by will, whereas a share held as tenants in common does not pass automatically and goes through the estate. GOV.UK's probate guidance adds that money and shares held jointly also pass automatically to the surviving owners unless they agreed otherwise. The person's share still counts when the estate is valued for inheritance tax, even though it passes outside the will.
Life insurance written in trust. HMRC's form IHT410 refers to insurance policies that are payable to beneficiaries under a trust and do not form part of the estate, so that money goes to the trust's beneficiaries rather than passing under the will. A policy that pays out to the estate, by contrast, forms part of it.
Many pension death benefits. HMRC's Inheritance Tax Manual says that in most cases lump sum death benefits are paid at the discretion of the scheme's trustees or provider, even where the member nominated someone, and that such payments are not then part of the estate. A payment made to the estate as of right, or under a binding nomination, does form part of it. This is changing for inheritance tax, because section 71 of the Finance Act 2026 applies the new pension rules to deaths on or after 6 April 2027, from when most unused pension funds and death benefits will count towards the value of the estate, with exceptions that include death in service benefits.
What is the difference between the gross and net estate?
The gross estate is the total value of everything the person owned when they died, and the net estate is what is left once their debts and the funeral costs are taken off. GOV.UK's guidance on what you need before applying for probate asks for gross and net figures for both inheritance tax and probate, and they are not worked out in quite the same way. The gross value for probate leaves out assets owned jointly that pass to the surviving owner, gifts made in the seven years before the death, assets abroad and assets held in a trust, whilst the net value for probate then takes off the person's own debts and the cost of the funeral, though not debts owed jointly, such as a joint mortgage.
For inheritance tax, HMRC allows a deduction for debts the person actually owed when they died, and GOV.UK says there is usually no tax to pay where the estate is below the £325,000 threshold or where everything above it goes to a spouse, civil partner or charity, which our guide to the inheritance tax threshold for 2026 explains in more detail. HMRC's manual notes, however, that the excepted estate rules, which decide whether you need to send HMRC full details of the estate, are generally concerned with gross values, so debts usually make no difference to whether an estate qualifies. Our guide on how to value an estate for probate goes through the valuation itself.
Who deals with an estate?
The estate is dealt with by the personal representative, which is the general term for an executor named in a will and for an administrator, who takes on the role where there is no will or no executor able and willing to act. GOV.UK says the personal representative is legally responsible for the estate from the date of death until everything has passed to the beneficiaries, a stretch it calls the administration period.
Where there is a will, the executors named in it can apply for probate. Where there is not, GOV.UK says the closest living relative can apply, which is normally a husband, wife or civil partner, followed by children aged 18 or over, including legally adopted children but not stepchildren, and it makes clear that a partner who was not their husband, wife or civil partner cannot apply. Our guide to letters of administration explains how an administrator is appointed.
What does an estate administrator do?
In practice an executor or estate administrator works through the same broad stages, whatever the size of the estate:
Find out what the person owned and owed, and get the value of each item at the date of death.
Report the value to HMRC where required and apply for probate or letters of administration if the organisations holding the assets need it.
Collect the money, sell or transfer property, and pay the debts, the funeral and any tax.
Place a notice in The Gazette, which GOV.UK advises, giving creditors two months to come forward, and wait for that period to pass.
Distribute what is left according to the will or the intestacy rules, then prepare estate accounts for the main beneficiaries to approve.
GOV.UK is clear that if you share out the estate without keeping enough back for debts and tax bills, you may have to pay them yourself. What remains once the debts, funeral costs, administration expenses and legacies have been dealt with is the residue, and our guide to the residuary estate explains who receives it. You do not have to use a solicitor, although GOV.UK suggests considering professional legal advice where an estate has a lot of assets or involves trusts.
How do you find out what is in an estate?
You piece it together from the person's paperwork and then confirm each item with the organisation that holds it. GOV.UK's guidance on identifying assets and debts suggests searching the person's papers and asking friends, family and any solicitor or accountant they used, then writing to each organisation with a copy of the death certificate to ask for the value on the date of death. It suggests asking the bank for a list of any share certificates or deeds it holds for the person, asking any employer whether wages are owed, and using the free National Savings and Investments tracing service if Premium Bond certificates cannot be found.
Bank statements and post are often the most useful sources, because direct debits and annual statements can point to accounts and policies that nobody in the family knew about. Our guide to finding the bank accounts of someone who has died sets out the places to look and the tracing tools available.
Does the estate pay tax while it is being dealt with?
It can, because the personal representatives are responsible for tax on income and gains the estate makes during the administration period. GOV.UK's page on managing and selling an estate's assets says the estate pays Income Tax on income it receives from the day after the death until everything is distributed, at 20% on most income and 10.75% on dividends received on or after 6 April 2026, with no allowances on savings, income or dividends. For income received since 6 April 2024 you do not need to report anything if the estate's income in a tax year is £500 or less, and simpler estates can report by letter at the end of the administration period rather than registering for Self Assessment.
Capital Gains Tax may be due if the estate sells an asset for more than it was worth when the person died. HMRC's helpsheet HS282 explains that the personal representatives are treated as acquiring the assets at their market value on the date of death, that the annual exempt amount is available for disposals in the tax year of the death and the two tax years after it, and that they pay 24% on gains from disposals made on or after 30 October 2024. Where the estate has paid tax on income, the personal representative gives each beneficiary who receives that income a form R185 showing what was paid.
How does it work in Scotland and Northern Ireland?
In Scotland the estate is often called the executry, and the person dealing with it is an executor nominate if the will names them or an executor dative if the sheriff court appoints them because there is no will or no executor. Their authority comes from confirmation, which the Scottish Courts and Tribunals Service describes as a court document, applied for at the sheriff court, that lets the executor collect and distribute the estate, and an estate worth £36,000 or less before debts counts as a small estate, where the sheriff clerk can help with the forms. Citizens Advice Scotland notes that a jointly owned property with a survivorship destination is not valued as part of the estate on the confirmation application, although it still has to be listed on the tax forms.
In Northern Ireland, nidirect explains that the executor or administrator may need to apply to the Probate Registry for a grant, that a share of property owned as beneficial joint tenants passes automatically to the surviving owner and does not form part of the estate, although it still counts for inheritance tax, and that where the estate is small, usually £20,000 or less, a bank may release money without a grant under its own rules.
What to do next
Find the will, if there is one, and work out who the personal representative is.
Gather the person's paperwork, statements and post, and list every account, policy and debt you can identify.
Check how any property and accounts were owned, so you know what passes outside the estate.
Write to each organisation for the value at the date of death, enclosing a copy of the death certificate.
Use the gross and net figures to see whether inheritance tax is due and whether you need probate.
Keep money back for debts and tax until the creditor notice period has passed.
You cannot value an estate, settle its debts or share it out until you know what is in it, and for many families the gaps are accounts that left no paper trail. If you think there may be accounts you have not found, Legacy Trail's Account Discovery Service searches for them and then notifies each provider, and for the accounts you already know about, our free notification service tells banks, utilities and other companies about the death on your behalf, which is one less thing to deal with whilst the rest of the estate is sorted out.
Frequently asked questions
Yes. Personal representative is the umbrella term for whoever has legal responsibility for the estate, and it covers both an executor named in a will and an administrator appointed where there is no will or no executor able to act. The core duties are broadly the same whichever route the person came by.
The estate is what the person left behind, meaning their money, property and belongings less their debts. A beneficiary is a person or organisation who receives some of it under the will or the intestacy rules. Beneficiaries do not manage the estate unless they are also a personal representative, because it is the personal representative who stays legally responsible for it until everything has been passed on.
If the house was in the person's sole name it belongs to the estate, as does a share they owned as tenants in common, and it is dealt with by the personal representatives, who need a grant of probate or letters of administration before HM Land Registry will register a sale or a transfer to a beneficiary. A home owned as joint tenants is different, because it passes automatically to the surviving owner and is not part of the estate.
No. GOV.UK says probate may not be needed where the person only had savings, owned money or shares with others, or owned land or property as joint tenants, because those joint assets pass automatically to the surviving owners. Every organisation sets its own rules on when it needs to see a grant, so it is worth asking each one directly.
Often not at present, because HMRC says most lump sum pension death benefits are paid at the discretion of the scheme's trustees or provider and those payments sit outside the estate. That changes for inheritance tax for deaths on or after 6 April 2027, when most unused pension funds and death benefits will count towards the estate's value under the Finance Act 2026, although death in service benefits stay outside it.
This article is for general information only and does not constitute legal advice. Individual circumstances vary. If you are dealing with an estate, consider taking advice from a solicitor who specialises in probate. For other guidance specific to your circumstances, speak to a funeral director, Citizens Advice, or a regulated financial adviser.