Many people underestimate the time it takes to administer an estate, however straightforward it may seem. Often, anxious beneficiaries mistakenly treat a deceased's assets as their own before the assets have been legally transferred to them. In other cases, people anticipating an inheritance may face financial difficulties as a result of spending the money before they have actually received it.

Research published in the United Kingdom this summer reveals that two-thirds of Britons expect to receive an inheritance within six months of the death of the person bequeathing them assets, and a third of Britons expect probate to take just three months.

However, probate can typically take anywhere from six months to three years to process and longer if the estate is unduly complex.

The full administration of an estate can take longer still. The situation is not dissimilar in Bermuda where probate and estate proceedings closely follow those in the UK.

The time taken to administer an estate is largely proportional to the type and location of the assets and to the estate planning undertaken by the individual during his or her lifetime. Proper planning cannot only minimise a stamp duty bill on death, but can avoid unnecessary delays in the administration and transfer of one's assets after death.

Estate planning can also avoid disputes among beneficiaries and family members that might otherwise lead to further delay and cost.

So what is the procedure for probating and administering an estate and why can it be so time consuming?

When a person dies the executors or administrators where there is no will (known collectively as the personal representatives) should obtain details of all of the deceased's assets and liabilities, including property that the deceased owned jointly with another person.

From the deceased's Will (if any), the personal representatives must establish the identity of the beneficiaries, their whereabouts and the nature and extent of their entitlements.

If the deceased died without a Will, it is necessary to establish which members of the family have survived, in order to determine their entitlements under the appropriate intestacy rules.

Usually a court document known as a Grant of Representation ("Grant") will be required. A Grant enables a personal representative to prove their authority to deal with the deceased's property that passes under the Will or the intestacy rules.

A Grant will be required in most cases where there is a transfer of real estate in Bermuda, a transfer of shares, or bank or investment accounts of significant value (e.g. over $50,000). If a Grant is required, the personal representatives must evaluate the size and value of the deceased's estate.

This applies to all property in which the deceased had an interest at their death, including jointly held property.

The details of the deceased's Bermuda assets are then listed in a document known as an Affidavit of Value.

Another document, called an Oath of Executors or Oath of Administrators, must also be prepared and sworn. This will give details of the deceased and sets out the basis of the application for a Grant. All three documents are then submitted to the Registrar of the Supreme Court.

Once the Grant is obtained, the transfer of assets can proceed. However, before any assets are transferred to the beneficiaries of the estate, the personal representatives must ensure that all debts and liabilities associated with the estate are met. This includes the payment of stamp duty.

Stamp duty payable on death where a Grant is required is calculated on the deceased's estate net of debts and liabilities owed at the time of death (including funeral expenses) and excluding deductibles such as the value of the primary family homestead. Currently the rates are as follows: first $50,000 – nil; next $150,000 – five percent; next $800,000 – ten percent; and over $1,000,000 – 15 percent.

Estate accounts are normally prepared as a final step in administering an estate. In all cases the personal representatives should ensure that beneficiaries acknowledge delivery of their legacies and distributions and discharge the personal representatives by means of a receipt.

If there are assets in countries other than Bermuda, which is often the case, then the process described above may have to be undertaken again. Where foreign assets are concerned advice will need to be sought from a professional adviser in the overseas jurisdiction in order to properly administer those assets, which can be an expensive process if not planned for in advance.

As you can see, settling a person's estate after they have died is not always straightforward and can require a considerable amount of effort by the persons who are responsible.

The time taken to administer an estate can be significantly reduced if a person leaves a valid will and takes the time during their lifetime to update it on a regular basis and to obtain proper estate planning advice.

Attorney Vanessa Lovell Schrum is a member of the Trusts Practice Group of Appleby. Copies of Mrs. Lovell Schrum's columns can be obtained on the Appleby website at www.applebyglobal.com. This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.