Often, when a person dies, the responsibility of administering the deceased's estate falls to a named person (or persons) know as the Executor(s). The task ahead for the Executor(s) can be daunting and, whilst in the midst of grieving for the loss of someone close, can be overwhelming. In this article we hope to help clarify what the roles and responsibilities are for the Executor of a Will.
We'll answer your questions including what is an executor, what you should consider when you are choosing an executor, and the duties and responsibilities of an executor.
What is an Executor?
Executors are those individuals or professionals named in a Will who are responsible for dealing with the administration of the deceased’s estate. If there is no Will is it the Administrators, determined by the Intestacy Rules, who are responsible for administering the estate of a deceased person.
An Executor must be over the age of eighteen and have the requisite mental capacity to deal with the administration of an estate. If an Executor does not have mental capacity to deal with an estate a Medical Certificate will be required, completed by a suitably qualified medical professional confirming the Executor’s lack of capacity.
Things to consider when choosing who to appoint as an Executor
You can appoint up to four executors to administer your estate. It is possible for you to appoint just one Executor, but you may wish to appoint more than one Executor to act together in administering the estate and to share the responsibility and workload involved. You could also appoint a substitute Executor to act in the event that the other Executor/s are unable or unwilling to act.
If appointing more than one Executor, it is important to choose people who will get along. Executors share a joint responsibility and if conflict arises or one executor is not fulfilling their duties and obligations this could cause delay and increase costs in dealing with the estate.
It is extremely important that the Executor/s you appoint are appropriate and capable of the role involved. An executor has a multitude of legal duties and responsibilities to fulfil when administering an estate and some of those even extend beyond the period of administration.
Executors can be held personally liable for financial errors and shortfalls in administering an estate, even when those errors are genuinely made.
The role can be complex and extremely time consuming.
Duties and responsibilities (Included but not limited to):
The exact duties depend on several factors such as the assets in the estate, the liabilities of the estate, any tax liability, who the beneficiaries are etc. Each case is different depending on the circumstances, but here is a list of some of the duties involved:
- Registering the death and arranging the funeral. However, in practice this is often a task which is undertaken by the family members of the deceased.
- Ensuring that the Will is the last valid Will of the deceased and that a later valid Will does not exist. As well as checking through the deceased’s personal belongings, it is possible to conduct a search of the National Will Register but not all Wills are registered and consequently it is not an exhaustive search. Executors could also check with local firms of solicitors to where the deceased lived to check if a later Will has been prepared.
- Determining the assets in the estate and the value of those assets. This can often involve dealing with several organisations such as banks, pension providers, investment companies, estate agents, accountants etc. Often professional valuations are required for assets such as property, stocks and shares, business assets, agricultural assets etc.
- Determining the extent of any debts and liabilities of the estate such mortgages, loans, credit cards, funeral costs, outstanding utility bills, pension overpayments etc.
- Executors are personally liable to determine the liabilities of a deceased’s estate and to ensure that those liabilities are discharged from the estate assets (where possible). Often Executors will be unaware of the extent of a deceased’s debts or liabilities, and it is extremely important for them to protect themselves by being able to demonstrate that reasonable effort has been made to determine the liabilities. By placing a Section 27 Trustee Act Notice in the London Gazette and a local newspaper advertising for creditors of an estate protects Executors after the expiration of the notice.
- Often there are lifetime Income Tax issues to resolve in order to determine whether there are any funds owing to or from the estate.
- Once the value of the assets has been determined the Executors must calculate any Inheritance Tax (IHT) due. To calculate the correct IHT due the Executor/s must apply all available exemptions and reliefs, such as annual exemptions for any lifetime gifts made the 7 years prior to death, lifetime gifts made from regular income, gifts on death to charity, gifts on death to spouses, Business Property Relief, Agricultural Property Relief, claiming to transfer any unused allowances from the estate of a deceased spouse. This can be an extremely complex area of law, which is ever evolving.
- Where appropriate prepare and submit the appropriate Inheritance Tax Return (and supporting schedules and valuations) to HMRC detailing the assets and liabilities of the estate and the IHT due.
- Pay any IHT due to HMRC within the permitted time frame. Generally speaking, IHT is due and must be paid within 6 months of the date of death. However, the Executors can elect to pay IHT attributable to some assets by instalments. If Executors exceed the permitted time-frame HMRC can issue financial penalties. Again, these rules are complex and it is always best to seek specialist professional advice.
- Executors can sometimes worry that they must pay the IHT from their own funds, but this is not necessary. A request can be made by the Executor for the deceased’s bank to settle the IHT due directly from the deceased’s bank account, even prior to the funds being released and prior to the Grant of Probate being issued.
- Submit an application to the Probate Registry for the Grant of Probate, which once issued authorises the Executors named on the Grant to administer the Estate. The process involved to apply for the Grant of Probate is determined by the value of the estate and whether the estate has an IHT liability. Note that the IHT due on an estate (other than that payable by instalments) must be paid before the Grant of Probate is issued.
- Collecting in / selling / transferring assets in the estate. If assets are being sold, the Executor/s must ensure that they are sold for a fair price and that no assets are sold at an undervalue.
- Settling the liabilities of the estate from the estate funds. The estate may have an Income Tax liability in respect of the income received from the date of death during the administration period. This could be bank account interest, rental income, dividends etc. There are different rated of Income Tax payable depending on the type of income received. Again, it is the Executor’s responsibility to ensure the correct Income Tax is reported and paid to HMRC.
- Keep full records and prepare Estate Accounts to account to the beneficiaries as to how the estate has been administered. The Executor/s should seek the beneficiary’s approval of the Estate Accounts prior to the estate funds being distributed.
- Distribute the Estate in accordance with the terms of the Will. If IHT has been payable on the estate, it is important that HMRC confirms that there are no further enquiries before distributing the estate.
Even though this is not an exhaustive list of duties, you can see just how complex and extensive the duties and responsibilities can be, many of which carry a personal liability. It is extremely important to make sure that you are aware of your duties as an Executor and that you are fulfilling those duties properly.
Many people choose to appoint solicitors as professional Executors, to ensure that their estate is administered by people with the expertise and specialist knowledge to deal with all matters correctly. Acting as an Executor can be a huge undertaking which can be very stressful for lay executors often during emotionally challenging times.
If you are an Executor who would like advice, or an Executor who would like to instruct solicitors to administer the estate on your behalf, then please get in touch with one of the team. If you would like to discuss the appointment of Executors, in the context of preparing your Will, then please get in touch to speak with one of the team.
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☎️ Call our Ossett office on 01924 586 466
About the Author
Joanne joined Thornton Jones Solicitors in May 2022, bringing a wealth of experience to our Private Client department.
Since qualifying as a Solicitor in 2009 Joanne has worked in the private client sector and has become a specialist in many areas of non-contentious private client work, particularly Wills, Estate Administration, Lasting Powers of Attorney, and Court of Protection applications.
After leaving her hometown to study at University and Law School in Surrey, Joanne returned to her roots here in Yorkshire to settle down and loves being able to work within the local community and helping local people.
There are never two days the same in the life of a private client lawyer and I enjoy the variety of work. I enjoy helping people from all walks-of-life deal with a variety of legal matters, often during extremely emotionally challenging times.
At home Joanne is kept more than busy with her daughter, her dog and her tripod cat. Any free time she has, she enjoys long walks with the dog, socialising with friends and family, dreaming of holidays in the sun and being an Alzheimer’s Society Dementia Friend.
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