10 Feb 2021
Wills & Probate
Many people under-estimate the responsibility that falls to an executor of a Will. Depending on the situation and the size and complexity of the estate left behind, it can be a fairly straightforward role, particularly if the deceased was well prepared. In many cases, however, taking on the role can often cause great stress and upset, not to mention the time it takes to carry out the duties effectively. There is certainly a lot more required of the position than simply reading the Will and dividing the money accordingly.
An executor is the person responsible for settling the finer details of a deceased person’s estate. This includes ascertaining and collecting in the assets, paying creditors, calculating/paying inheritance, income and capital gains taxes, cancelling recurring services and subscriptions, arranging the sale of any property and distributing assets to the relevant beneficiaries. An executor needs to understand the exact terms of the Will and administer these accordingly.
One of the first tasks is to establish exactly what assets the deceased owned – from property, shares and investments to bank accounts and life insurance – but also what they owed. If they had any credit card or loan debt, for example, all these will need to be repaid from the estate before any assets are distributed.
You will need to ascertain the ownership status of any properties owned to ensure all mortgage debt is taken into consideration when working out the finances.
Preparing tax returns for Inheritance Tax, Income Tax and Capital Gains Tax is often one of the most difficult parts of being an executor. HM Revenue & Customs can impose harsh financial penalties if incorrect or inaccurate information is put down in tax returns so avoiding errors is extremely important. Once the values as at the date of death are known, the executor may need to apply for a Grant of Probate in order to be able to collect in the assets.
Communication is key when it comes to dealing with the beneficiaries of a Will. They might contact you regularly for updates or want you to send them various documents in relation to the estate. Beneficiaries often want to see the Will before probate is awarded but it is at your discretion whether you disclose it to them. It is important to find the right balance between not leaving them in the dark but also knowing that you are not duty bound to pander to their every request.
Consider carefully each request for information; think about why it is being asked for and the implications of sharing it. Take care, however, not to refuse all requests for no valid reason as if beneficiaries feel as though vital information is being withheld from them, they can apply to the Probate Registry for an inventory and account.
Throughout the administration process, as an executor you will have to make several difficult decisions that don’t always go down well with some of the beneficiaries, most often relating to the sale of the family home. A common complaint is that the beneficiaries accuse the executor of selling the property at less than its true value or of failing to dispose of wasting assets before they lose value.
Unfortunately, it is very common for family feuds to be caused by a death in the family and the subsequent splitting of assets.
Often, certain dependants feel entitled to receive more than others, particularly when they have taken on caring responsibilities for an older relative for example. There are likely to be even more complications in complex family set-ups where perhaps there are dependants or other people who may be entitled to the estate, who were not known to the family when the deceased was alive.
There are several ways in which people can challenge a Will. They may try to challenging the validity of the Will on the grounds of lack of capacity, lack of knowledge and approval or undue influence which may prevent you from taking out a grant of probate. A person may also try to make a claim under the Inheritance (Provision for Family and Dependants) Act 1975. Such claims will delay the administration and distribution of the estate. An Executor should make sure they are aware of the timescales in which such claims may be brought.
In some rare cases, an executor fee is outlined in the Will, to compensate you for your duty but for the most part, non-professional executors will not be rewarded for the role. The expenses can turn out to be more than you might expect so you should be able to show invoices or receipts for all costs relating to the administration of the estate, so that all costs can be reclaimed. It is very important that estate accounts are accurate as errors can result in assets and/or debts being missed and the wrong amounts being paid out to beneficiaries.
Many people believe that as executor, they can save themselves money by not appointing a solicitor and executing the Will themselves. However, in nearly all cases the legal fees will be paid for by the estate so this should not be a deciding factor when considering whether to engage professional legal support. The administration fees take higher priority to many creditors of the estate.
An executor has an obligation to act in the best interest of the estate and demonstrate the appropriate level of care and skill when carrying out their duties. While an executor is protected from any of the estate’s liabilities, you can be held liable for damages that result from your negligence or breach of duty. Instructing a solicitor to help you deal with probate can give you peace of mind that you will carry out all your responsibilities correctly and not unknowingly neglect any essential duties. It is also worth remembering that whilst the liabilities belong to the estate, an executor could face personal liability to a creditor if they distribute to a beneficiary before becoming aware of a creditor. There are, however, ways to avoid/minimise this risk.
Usually, the deceased will have checked with you first that you are willing to act as executor or their Will. If this has not happened and you do not want to take on the role, you can sign a deed of renunciation before the grant of probate has been taken out and effectively step down. However, if you have already ‘intermeddled’ with the estate, for example, selling the deceased’s house, you would not be able to renounce as you would be seen as already actively taking on the executor role.
In circumstances where the deceased did not make a Will, the rules of intestacy will determine who will inherit from the estate and who will be entitled to apply for a Grant of Representation. The Grant will appoint an administrator to deal with the estate (often one of the people also entitled to benefit). A family member who believes they are entitled should consider engaging the services of a genealogist to ensure that all beneficiaries under intestacy are accounted for.
Many people think it is expensive to instruct a solicitor but it’s often less expensive than you’d think and all legal fees are paid from the estate. Our Wills & Probate team offer a free initial advice appointment and will explain how they can deal with your loved one’s estate for you, giving you the peace of mind that all of your executor responsibilities will be carried out correctly and your loved one’s estate is in good hands.
You won’t have to worry about having to pay a fee calculated as a percentage of the estate and we’ll be able to give you an estimate of our fees upfront. For an initial discussion, please contact the Wills & Probate team on 01633 244233 or email firstname.lastname@example.org.