When someone dies without a valid Will, they are said to have died intestate. In England and Wales, their estate is then distributed under the rules of intestacy, set out in legislation. In many cases, those rules create what are known as statutory trusts.

What is a Statutory Trust?

A statutory trust is a trust that arises automatically by law, rather than being deliberately created by a Will.

Under the intestacy rules, certain beneficiaries (most commonly children) do not receive their inheritance outright immediately. Instead, their entitlement is held on trust until specific conditions are met.

When Do Statutory Trusts Arise?

Statutory trusts commonly arise where the deceased is survived by:

• children, or
• other close family members who are entitled under the intestacy rules

The most common example is where a person dies leaving children under the age of 18.

Who Benefits Under a Statutory Trust?

Under the rules of intestacy, beneficiaries typically include:

• children (including legally adopted children), and
• their descendants if a child has already died

Each beneficiary is entitled to a share of the estate, but that share is held on statutory trust until they are legally entitled to receive it outright.

When Does a Beneficiary of a Statutory Trust Become Entitled?

Under a statutory trust, a beneficiary becomes absolutely entitled when they:

• reach 18 years of age, until then, their inheritance is held and managed by trustees.

Who Acts as Trustee of a Statutory Trust?

The personal representatives (usually the administrators of the estate) act as trustees of the statutory trust. They are responsible for:

• safeguarding the assets
• managing investments
• applying income or capital for the beneficiary’s benefit where appropriate

This role carries legal duties and responsibilities.

What Can the Trustees of a Statutory Trust Do With the Funds?

Trustees have limited statutory powers, including the ability to:

• use income or capital for a child’s maintenance, education or benefit, and
• invest the funds until the beneficiary becomes entitled

However, the flexibility is far more restricted than if a tailored trust had been created by a Will.

Why Can Statutory Trusts Be Problematic?

Statutory trusts are one-size-fits-all and may not reflect what the deceased would have wanted. Common issues include:

• beneficiaries inheriting outright at 18, regardless of maturity
• no scope to protect assets from divorce, creditors or poor decision-making
• no ability to benefit stepchildren or unmarried partners
• increased administrative burden for trustees

How Can You Avoid a Statutory Trust Being Invoked?

The only way to avoid statutory trusts arising on death is to have a properly drafted Will. A Will allows you to:

• choose who inherits
• decide when and how beneficiaries receive their inheritance
• appoint trustees of your choosing
• include flexible trust arrangements where appropriate

Contact our Wills & Probate Solicitors for Advice

Understanding statutory trusts highlights why estate planning is so important and why dying without a Will can leave loved ones with outcomes you never intended.

At Thornton Jones Solicitors our private client team can assist you in preparing a Will that reflects your wishes and will avoid unintended consequences. Contact our friendly and professional team today for more information.

If you need assistance or advice you can contact our team today on 01924 290 029 or contact us using our online enquiry form.

Statutory Trust FAQs

The content of this blog post is for information only and does not constitute formal legal advice and should not be relied upon as advice. Thornton Jones Solicitors Limited accepts no liability for any such reliance upon this content. Where the post includes links to external websites, Thornton Jones Solicitors Limited accepts no responsibility for the content of such sites. Any link to a third-party website should not be construed as endorsement by Thornton Jones Solicitors Limited of any content, products or services which are outside our direct control.

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When providing instructions for a Will, the Testator will be asked to name an Executor within the terms of the Will. At the very least, they will be asked to appoint one Executor and at the most they can appoint four Executors.

What is an Executor to a Will?

An Executor to a Will is someone who will be responsible upon the Testator’s death to manage the deceased’s estate. It is their duty to ensure that the following are completed:

• The deceased’s wishes are carried out;
• All assets have been identified and disposed of in accordance with the Will;
• All liabilities including debts, taxes and testamentary expenses have been settled; and
• A Grant of Probate has been obtained, if required.

The role is not restricted to the above points; however, these obligations will take up most of the Executor’s time and focus.

Who can be an Executor of a Will?

In England and Wales, anyone is eligible to be appointed as an Executor as long as they are over the age of 18 and have mental capacity to undertake and perform the duties of an Executor.

Usually, people appoint their close family members or close friends as Executors. For example, their spouse, children, parents, siblings, lifelong friends etc. These kinds of Executors are known as Lay Executors.

However, professionals can also be appointed as Executors too, i.e. solicitors. These are referred to as Professional Executors. Professional Executors can be appointed when there is no-one you feel is willing or suitable to take this role on but also for a number of other reasons too.

Can a Beneficiary of a Will also be the Executor?

An Executor can also be a beneficiary under the terms of the Will. For example, if you appoint your spouse as an Executor and everything is to pass to them upon your death, this will not prevent them from acting as an Executor.

It is entirely up to the Testator who they wish to pick to be their Executor. When considering this decision, they may contemplate what is best suited to their specific circumstances and how they wish for their estate to be dealt with upon their death. It is important to note that Executors can be changed by updating your Will and it is not a definitive decision.

What are the benefits of appointing a Lay Executor?

1. Trust and Personal Knowledge

When appointing a Lay Executor, this is likely to be someone close to you and who knows you on a personal level. Therefore, when dealing with the estate administration they are likely to make decisions in consideration of your personal wishes. For example, if they were planning your funeral, it is likely that they would take a personable approach by considering your wishes, such as having consideration to religious beliefs, music choices and desires regarding burial or cremation.

Another example where a personal approach may be taken is in regard to the distribution of personal items, i.e., jewellery, they may have knowledge that something is a family heirloom so you may wish for this to be passed on to a family member rather than this being discarded.

Having an Executor act who has known you and has prior knowledge of your circumstances can be a useful when dealing with the Estate. This can help the Executor navigate the administrative process with care and respect to your personal wishes. It is also advantageous when dealing with family of the deceased and handling their dynamics. They may understand certain situations need to be handled carefully and proceed to deal with sensitive situations with compassion.

Appointing a family member or friend to be an Executor may give the deceased peace of mind due to the implicit trust and faith they have in the individual to deal with matters how they would like.

2. Saving on Legal Costs

Appointing a family member or friend to be the Executor to deal with the estate administration can save on legal costs. They have no rights to charge for this service and cannot profit from undertaking the role.

It is the Executor’s discretion if they seek legal advice and instruct solicitors to help them with the administrative process. If they choose not to, the estate will not bear a burden of settling legal costs unlike if a Professional Trustee was acting.

However, Executors are entitled to claim back their expenses from the estate funds. For example, payment of death certificates, the probate application fee, administrative costs etc but they cannot charge for their time and dedication to the role.

3. Flexibility and Informality

Choosing a Lay Executor may be mean that the estate is dealt with on a more informal basis. For example, communications with beneficiaries may be more causal. Lay Executors may explain the processes in plain language and remove the legal jargon which can arise when solicitors are dealing with an estate.

In addition, a Lay Executor may have increased understanding towards the deceased’s family dynamics. They may have the potential to foresee anticipated disputes, and this can be helpful when managing the expectations of those involved, minimising tensions and resolving conflict. They are likely to understand any emotional ties to personal and sentimental items and consider who may wish to retain such items within the family.

Flexibility and informality can mean that there is more natural communication between the Executor and beneficiaries, and the Lay Executor could use their emotional awareness to manage the family’s needs and expectations by making relationship-sensitive decisions. However, the informal and flexible approach should not compromise them in their role to comply with the legal framework of the estate administration.

In summary, Lay Executors can bring a more personal approach to the estate administration and at a lower cost than a Professional Executor.

What are the benefits of appointing a Professional Executor?

1. Legal Expertise and Taxation Knowledge

Estate administration can involve many complex tasks, for example: –

• Completion of a probate application;
• Inheritance Tax calculations;
• Payments of Income Tax, Capital Gains Tax and Inheritance Tax;
• Property transfers and sales;
• Business and share valuations; and
• Dealing with creditors

The list is not exhaustive, however many of the tasks can be hard to navigate with no legal training or background. A legal professional will be highly skilled and has been legal trained, therefore if acting as a Professional Executor they can understand and apply their knowledge regarding estate administration and taxation laws to those specific circumstances; understand compliance and rules relating to reporting such information and the deadlines they carry, which can reduce the risks of making costly mistakes.

Due to little understanding, Lay Executors can make small errors which can be hard to fix, by simply not having the deeper knowledge to assist them in the estate administration. Professional Executors have expert knowledge, and they are trained to avoid making such mistakes.

2. Complex and High Value Estates

The higher the value of the Estate, the more technical the Estate becomes to administer. Estates which include multiple properties, assets overseas, trusts, agricultural and business assets and large investments bring their own technical complexities. Taxation reliefs become more important to consider, and Inheritance Tax liabilities are more likely to arise. These kinds of estates can be overwhelming for a Lay Executor to navigate and understand. Therefore, a Professional Executor will have more experience on how to handle high-net worth estates and can apply their knowledge to tax-planning and complex points of law.

3. Managing Family Disputes

Often people opt to appoint Professional Executors to act when there are ongoing family tensions or history of family disputes, as they can offer an impartial and unbiased approach to the estate administration.

Tensions can arise between families at any point, i.e., during the Testators lifetime or upon death and these can impact the administration of the Estate. For example, when relatives have been treated unequally in the Will, ex-partners or blended families have grievances against the terms of the Will and dependants may wish to challenge the Will. This can develop into litigious proceedings and be difficult for Lay Executors to deal with.

If this is likely to happen, a Professional Executor may be more advantageous to have appointed as they can act independent to the ongoing conflict. Professionals have no emotional involvement, and they are obligated to distribute the Estate strictly in line with the Will. Professional Executors will take an unbiased approach to such circumstances, and this can help protect the estate from litigious proceedings.

4. Protecting Family Members from Stress

Loosing someone close to you then having to act as a Lay Executor can be an emotional challenge. Dealing with grief and a loved one’s Estate can cause great stress and anxiety.

The process of dealing with estate administration is burdensome on a Lay Executor, as it is time-consuming, administrative and often overwhelming. It can involve a volume of paperwork, handling distressed beneficiaries, managing property sales and sorting through personal belongings which can be hard when navigating grief.

Appointing a Professional Executor can remove the emotional ties and protect family members from the extra burden of dealing with a loved one’s Estate. They will have the time to grieve without the administrative pressure and the freedom to process their emotions without having to deal with lengthy legal matters.

5. Continuity and Reliability

Appointing a Professional Executor can ensure some structure and consistency when dealing with the estate administration. As they are acting in their professional capacity, they must remain impartial and unbiased in order to uphold their profession’s code of conduct, meaning that can be trusted and deal with the Estate in an ethical and efficient manner.

They also have internal systems and procedures, meaning that every decision or step taken in relation to progressing the matter will be documented and recorded to ensure a smooth and fluid transition through the administrative process. Internal procedures ensures that work can be delegated to other members of the team so work can be actioned in a timely and smooth manner.

It is unlikely that a solicitor will die or become incapacitated during the administration period, unlike the appointment of an elderly relative such as a sibling or parent.  If a solicitor does become unable to act, it will become less problematic than if this were to happen to a Lay Executor. Another member of the Firm would likely step in to replace the Professional Executor.

Having a Professional Executor making decisions in regard to the Estate can ensure that it is dealt with in an efficient and reliable manner.

6. Reduce Personal Liability Risk

Executors can become personally liable if they distribute assets before settling debts, miscalculate tax owed from the estate, fail to identify claims against the estate or breach fiduciary duties. This means that they can find themselves in a position whereby they are owing monies to creditors and beneficiaries from their personal finances, through innocent and small errors.

Appointing a Professional Executor would ensure that a Lay Executor does not become liable in these circumstances. Professional Executors have a thorough understanding of mitigating risks and following formal procedures. They understand how to protect themselves in this instance by keeping detailed accounts and contacting and notifying creditors to ensure all debts are settled. They have access to conducting financial searches to identify any liabilities and are able to publish specialised notices to creditors. This protects family members and friends from compromising themselves financially through minor and naïve errors.

Overall, Professional Executors can take an unbiased approach and take on the majority of the administrative and time-burdensome work. They can apply their legal expertise to decisions made in relation to the Estate in order to mitigate risks and errors which can cause personal liability to arise.  

Conclusion

In conclusion, there is no right or wrong answer as to who an Executor can be. Both Lay Executors and Professional Executors have their own advantages but there is not a one size fits all answer.

When choosing an Executor to appoint, it is advisable to consider the bigger picture and your personal circumstances, by making a balanced and informed choice what you as a Testator will be comfortable with upon death.

How can Thornton Jones help?

Here at Thornton Jones, we can offer bespoke advice regarding the role of Executors. We can assist you in deciding who to choose to be an Executor in your Will by providing you with detailed information relating to the appointment of Lay Executors and Professional Executors and updating your Will in this regard.

In most circumstances, the Directors of Thorntons Jones are willing to be appointed as Professional Executors and we can explain how this would work in terms of your Estate, such as how we can offer a personal element, who would handle the estate day to day and any fees which this may incur.

Our experienced team can also assist any Lay Executors who may be struggling with the estate administration and need some extra support and advice in this regard. If appropriate, they assist with more limited work such as applying for probate or offering bespoke and specific advice in relation to your role as a Lay Executor. They can also assist with dealing with high value and complex estates and can take on the full estate administration and reduce the burden of this upon the individual where appropriate.  

Contact our Wills & Probate Solicitors for Advice

Choosing the right Executors and preparing a clear Will are key steps to ensure your estate is managed according to your wishes. Without a Will, statutory trusts may determine who inherits, potentially creating outcomes you did not intend and leaving loved ones in a difficult position.

At Thornton Jones Solicitors, our Private Client team can guide you through appointing Executors you trust and drafting a Will that reflects your intentions. We help you plan ahead so your estate is handled smoothly and in line with your wishes.

For personalised advice or assistance, contact our team today on 01924 290 029 or via our online enquiry form. We’re here to help you make the right choices for your estate and your loved ones.

Executor of a Will FAQs

The content of this blog post is for information only and does not constitute formal legal advice and should not be relied upon as advice. Thornton Jones Solicitors Limited accepts no liability for any such reliance upon this content. Where the post includes links to external websites, Thornton Jones Solicitors Limited accepts no responsibility for the content of such sites. Any link to a third-party website should not be construed as endorsement by Thornton Jones Solicitors Limited of any content, products or services which are outside our direct control.

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