So, you have been named as an executor in someone’s Will. This means you have the legal authority to deal with their assets and to undertake the administration of their estate on their death.
An executor can be a family member, friend or professional. Being chosen as an executor is an honour; however it also comes with certain obligations.
A common misconception is that you cannot act as an executor if you are a beneficiary. This is not the case. However, you must ensure you act in the best interests of the estate, which can sometimes conflict with what your wishes may be as one of the beneficiaries!
It is a great responsibility to take on the role of an executor, and is a lifelong appointment. Some estates will be relatively straightforward to administer, but others can be extremely complex and can even take several years to complete.
Some of the duties and responsibilities expected of an executor include, but are not limited to:
- Accurately identifying all assets and liabilities of the estate;
- Obtaining formal valuations of the assets (where appropriate);
- Calculating the value of the estate and any tax liability;
- Claiming the available allowances to offset against any tax liability;
- Settling any tax due within six months of the date of death and before interest starts to accrue (where possible);
- Ensuring the assets of the estate are safely preserved for the beneficiaries until distribution;
- Settling the personal taxation of the deceased; and
- Completing the estate in a timely manner
You could be held personally financially liable for any loss resulting from a breach of duty, even if the mistake is a genuine one.
You must ensure you have carried out sufficient investigations in relation to any creditors or debts the deceased may have had. If you pay any of the deceased’s debts and additional creditors come to light which then exceeds the value of the assets, you may become liable to settle all debts in full.
Similarly, if you make distributions from the estate to the beneficiaries too early, and a successful claim is then brought against the estate, you may be personally liable to settle the claim from your own resources.
Before distributing the estate to the beneficiaries, you must carry out checks as to their respective financial positions. If a beneficiary is bankrupt, their entitlement may instead be payable to the trustee in bankruptcy.
As you can see there is a lot to consider when taking on the role as executor and it can seem rather a daunting prospect. However, the law does have procedures in place to protect executors.
You should consider instructing a firm of solicitors to assist you with the administration of an estate to navigate you through the process. Any legal fees are due from the estate, not you personally. Do not get caught out and open yourself up to unnecessary risk!
Lesley Hamilton Porter Dodson