Losing someone can be overwhelming, and dealing with their finances may feel particularly difficult at an already emotional time. Understanding the main steps – and putting some arrangements in place in advance – can make the process clearer for those left behind.
Tax rules apply
Tax rules apply
Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.
A Practical Planning Checklist: Steps to Take Now
Ensure you have a will in place and review it regularly, particularly when your circumstances or those of your intended beneficiaries change.
Make sure your executors, or someone close to you, can find information about your assets and debts and know whom to contact. Making a list and reviewing it regularly will also help give you peace of mind.
Consider whether you need to speak to someone about estate planning.
Think about how funeral costs, IHT and any debts would be paid, and leave clear information for the person responsible for administering your estate.
What to do after someone dies
How much does a funeral cost in the UK?
Funeral costs vary considerably according to the type of funeral, location and the choices made by the family. The SunLife Cost of Dying Report 2026 found that a simple attended funeral cost £3,828 on average, compared with £4,510 for a traditional attended funeral and £1,628 for a direct cremation. Optional elements such as flowers, catering, transport and a memorial can increase the total cost.
Type | Cost |
Attended Funeral | £3,828 |
Traditional | £4,510 |
Cremation | £1,628 |
Who pays for the funeral?
This will depend upon the financial position of the deceased and their family. Although an individual’s assets are frozen when they die, most banks will release funds to cover funeral costs. Some people purchase a pre-paid funeral plan during their lifetime, which can ease the burden on their family when they die. If no funds are available and there is no pre-paid plan in place, the family, or whoever organizes the funeral, will need to pay the funeral director.
State support is available to help certain individuals on low incomes with the costs. If the deceased left no money to cover the funeral and there are no family members able to pay, the local council will arrange a basic funeral.
Who needs to be notified when someone dies?
The death should first be registered. In England and Wales, it must generally be registered within five days of the registrar receiving the necessary medical information. In Scotland, the usual period is eight days.
All relevant government organisations will also need to be notified. This can be done using the ‘Tell Us Once’ service. The registrar can assist with this or provide the family or executor with the details they need to complete the process themselves.
Other people and organisations to notify include:
All banks and financial institutions
Utility, water, broadband and telephone providers
Housing associations
Loan or credit card companies
The deceased’s doctor and dentist
Their employer
Pension providers and insurance companies
If the deceased made regular charitable donations, the relevant charities should also be told, along with any clubs or societies of which they were a member.
What happens to money, bills and debts?
What happens to bills and bank accounts?
Accounts held solely in the deceased’s name will usually be frozen once the bank has been notified. Access will generally remain restricted until the probate has been granted, although requirements vary between providers. Many UK banks and financial institutions will release smaller balances without a grant of probate, sometimes up to £50,000.
Banks will also often release money directly to a funeral provider to cover funeral costs. Many participate in HMRC’s Direct Payment Scheme, which allows Inheritance Tax (IHT) to be paid directly from funds held on in the deceased’s accounts.
Joint accounts will usually pass into the sole name of the surviving account holder.
What happens to debts?
Debts are paid from the deceased’s estate. It is the responsibility of the executor(s) to ensure these are settled in the correct order. Secured debts (mortgages etc.) have to be paid first followed by other debts and taxes.
Before distributing the estate to beneficiaries, executors should take reasonable steps to identify any creditors. The best way to do this is by placing a statutory notice, commonly known as a Section 27 notice, in The Gazette and a newspaper local to where the deceased lived. This can help protect executors from personal liability if an unknown creditor makes a claim after the estate has been distributed.
Where someone’s estate has no money or insufficient money to meet all the debts, any remaining amounts will usually be written off. However, if an overdraft or a loan was held jointly, the surviving borrower will normally be responsible for paying back the full outstanding amount.
Capital at Risk
Capital at Risk
Please do remember that as with all investments, your capital is at risk. Tax treatment depends on individual circumstances and may be subject to change.
What is probate and when is it required?
Probate proves that the deceased’s last will is valid. It then gives the executor(s) the legal right to deal with an individual’s estate.
Before making an application for probate, the executor(s) will need to work out the value of the estate and pay any IHT that is due. The application may be made online or by completing paper forms. Sometimes executors find the process overwhelming and might wish to appoint a professional to help.
Probate is needed when the deceased owned assets such as property, money in a bank account over a certain threshold (the amount depends upon the provider) or other investments. Some pension and life insurance providers may also request a grant before releasing funds.
If all the deceased’s assets were held jointly and pass automatically to the surviving owner, probate may not be required
Please note that certain assets may pass outside the will and estate). Depending on how they are arranged, these can include pension assets, trusts assets, death-in-service benefits and life insurances (when written into trust). However, for deaths on or after 6th April 2027, most unused pension assets will be included in the estate for IHT purposes
Inheritance Tax: what may be due?
IHT is calculated on the value of an individual’s assets when they die, after deducting debts and any available exemptions or reliefs
The standard rate of IHT is 40% (exceptions to this rate are below). Each individual has a nil rate band, currently £325,000, meaning that no IHT is normally payable on the portion of an estate within this threshold.
A further residence nil rate band of up to £175,000 may apply when a qualifying home is left to direct descendants. Together, these allowances can provide an individual with a total tax-free threshold of up to £500,000. However, the residence nil rate band is gradually reduced for estates worth more than £2 million.
Both allowances can be transferred between married couples. Any unused nil rate bands following the first death may then be used by the surviving spouse on their death.
Where gifts in excess of the annual allowances have been made in the seven years before an individual has died, the value of these gifts are brought back into the estate when calculating the IHT due. The amount of tax due on these gifts will be lower than 40% if they were made more than 3 years prior to the date of death (the rates are on a sliding scale).
Other exceptions to the 40% IHT rate are charitable gifts – these are exempt from IHT. Where 10% or more of an individual’s net estate has been left to charity, IHT on the remaining estate will be charged at the reduced rate of 36%. Gifts to spouses or civil partners are also made free of IHT.
IHT has to be paid by the end of the 6th month after the date of death, and it needs to be paid before the probate can be granted. Interest is charged by HMRC on late payments. HMRC understand that sometimes money isn’t available to pay the IHT on certain assets so IHT due on property may be paid over 10 years in annual instalments. Executors need to work out whether this is a good option though as interest still applies on these instalments.
Some individuals might choose to buy a life assurance policy to cover the amount of IHT they are likely to pay. By having this written into a trust, the policy would remain outside the estate. Otherwise, the executors would need to contact asset providers to ascertain if they are to release money to meet the tax bill. If there are no liquid assets available, they might need to take out a loan.
If an individual has a mixture of exempt and non-exempt beneficiaries, they may wish to indicate in their will how the executors should pay the IHT that will be due.
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