Being an Executor, should I say yes?

Being asked to be someone’s executor is a great compliment as it means they trust you implicitly to sort out their affairs. However, it also brings with it a great deal of responsibility, and not to put to fine a point on it, a reasonable amount of hard work too.

Lucy Duffin from Penderlaw’s Wills, Trusts and Probate team explains what is involved in being an executor.

What does an executor do?
So, beginning with the basics…the person dealing with the estate of the person who has died is called the personal representative. The personal representative may have to apply for special legal authority to be able to deal with the estate, this legal authority is called probate or letters of administration. If there is a will, then executors are named in the will. If there is no will, then the person appointed to deal with the will is called the administrator.
The work involved in dealing with a person’s estate is often underestimated. It really is important to be fully aware the nature of the role of this, before agreeing to take on this responsibility. Most people appoint a family member or friend, and also a professional (usually a solicitor) to act as joint executors. If you are to a sole executor, you might want to think about requesting that a professional is also appointed alongside you, to lessen the responsibility on your shoulders.

The 5 key responsibilities of an executor
In essence, there are 5 key responsibilities which fall to the executor(s)
1) Compiling details of the deceased assets including possessions, shares, and money and debts/credits
2) Notifying HMRC, banks, insurers, pension schemes etc. of the death
3) Considering any inheritance tax liability and offsetting the appropriate reliefs and allowances
4) Applying for the grant of probate/ letters of administration
5) Distribution the estate

Assets and liabilities
Before an executor can share out the estate amongst the beneficiaries of the will, they must first establish what assets and liabilities there are. This involves pulling together all the financial documentation belonging to the deceased, sending a death certificate to banks, pension schemes and any organisations holding money belonging to the deceased, as well as asking them to confirm any income from this money so that income tax can be calculated.

Taxes, debts and fees
In addition to this, documents required by the probate registry and HMRC must be prepared and sent off. Debts, expenses, and fees, such as solicitors’ fees and probate fees, need to be paid and obviously money owing to the estate must be collected in from banks, building societies, pensions and investments. Should any errors come to light or unforeseen situations arise once the estate has been distributed, the executor may find themselves personally financially liable.

Do you need a solicitor?
Some people do choose to administer an estate themselves. It obviously is an attractive option as it means that you can avoid paying professional fees.

However, if you do choose this option, you should go into it with your eyes wide open. It is vitally important to realise that there are a number of significant risks you will be taking if you are unfamiliar with the process itself.

For example, if you share out the estate to the beneficiaries but then receive a subsequent claim from a creditor, or discover that there is tax still owing, you could find yourself personally financially liable.

You could also pay too much tax if you do not have expertise on the relevant allowances and reliefs, which could give rise to claims from the beneficiaries.

Other areas of risk include insolvent estates, disputes as to the validity of the will following the distribution of the estate and beneficiaries who have been declared bankrupt.

The Citizens Advice Bureau recommend that you seek legal advice for any estates which involve any of the following:

• Where the terms of a will are not clear
• Where part of the estate is to pass to children under the age of 18
• If the person who died has left money or property in a trust
• If the person who died owned land or property abroad
• If the person who died owned a business
• If anyone is likely to dispute the will

Where inheritance tax is applicable, it is also sensible to seek professional advice.

N.B. Professional fees will be paid by the estate, and in the event of a solicitor making a mistake, you will have the protection afforded by the solicitor’s indemnity insurance.

Get in touch
If you would like to contact a member of our Wills, Trusts and Probate team, you can call us on 01872 241408 or email Details of our pricing is available here