The Risk and Responsibilities of Being an Executor of a Will
05 June 2017
By Head of Probate, Gavin Holt
Being an Executor of a Will, whilst very important, can be a thankless task. The role comes with a lot of serious legal responsibilities, and unless the Will says otherwise, you won't get anything in return.
Sometimes people leave their Executors cash sums, often only payable if they take up the role and deal with the Estate, but this isn't all that common. For the most part, it is an awful lot of risk and responsibility with little reward.
Having the Estate dealt with by our Probate Solicitors gives you the peace of mind that all of your Executor responsibilities will be carried out correctly, and that your loved one's Estate is in good hands. Our Probate Solicitor fees can be paid for by the Estate, providing the Estate has assets that can be liquidated.
With our Probate Complete Service we take full responsibility for getting Grant of Probate and dealing with the Legal, Tax (excl VAT), Property and Estate Administration affairs.
You may be a main beneficiary as well as an Executor, in which case you will have an inheritance coming to you, but you'll normally get the inheritance regardless of whether or not you act as Executor.
Imagine this scenario: a parent dies leaving three children and divides the Estate up equally amongst them, so a third each. However, only one of them is appointed as Executor, and so that one child has all the risk and responsibility of dealing with everything, whilst the other two can simply wait for their inheritance to come through. That's just one example of course. The parent could have appointed all three children as Executors, in which case they'd share the risk and responsibility. Or the parent could have appointed none of the children and instead chosen a professional Executor, like a solicitor or an accountant.
Put simply, the Executor's overall responsibility is to deal with the administration of the deceased person's Estate in accordance with the law. In other words, they have to deal with the deceased person's property, money, possessions, debts and lots of other things, and they have to make sure they get everything right. If they don't, they can risk facing personal financial liability for their mistakes, even if the mistakes made were perfectly innocent. It is very important to avoid this, as no Executor wants to have to use their own money to correct mistakes made with the Estate.
The following are some of the main responsibilities of an Executor:
- Registering the death and arranging the funeral
- Gathering together all of the information about the Estate. It's important to do this very carefully. If assets and/or debts are missed at this stage, it can cause problems later on.
- Valuing the Estate for Probate and Inheritance Tax. This normally means talking to Estate agents and other valuers, and also corresponding with banks, building societies, share registrars, insurance companies and many others. This part can be time consuming, as you need to rely on a lot of different people and organisations to give you what you need.
- Preparing tax returns for Inheritance Tax, Income Tax and Capital Gains Tax. Dealing with 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 more important than ever.
- Applying to the Probate Registry for the Grant of Probate. This is the legal document that confirms the Executor's authority to deal with the Estate.
- Selling property and collecting in other assets. A particularly important responsibility Executors have is making sure they achieve the best possible price when selling property. If they don't, they can face criticism and even legal action from the beneficiaries of the Estate.
- Paying debts and expenses. These might include the funeral, utility bills, taxes and the fees of any professionals you have involved in the Estate, such as Probate Solicitors.
- Ensuring that the beneficiaries receive their inheritances. This can mean paying out cash legacies, transferring assets (such as property) and also paying out what is called the 'Residuary Estate'. This is essentially what is left of the Estate after all the debts, expenses, taxes and legacies have been paid.
- Preparing detailed Estate accounts showing how all of the money in the Estate was dealt with. It's 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.
The above list does not cover everything. A lot of what an Executor has to do to carry out their responsibilities depends on the specific Estate they have to deal with.
Large and complicated Estates come with a lot more risk and responsibility than small and straightforward Estates. It's worth mentioning, though, that just because an Estate is small, that does not necessarily mean it's straightforward. It's also true that, just because an Estate is large, that does not necessarily mean it's complicated. Having said that, the larger an Estate is, the more likely it is to be complicated, not least because Inheritance Tax only becomes payable in larger Estates.
It's not always easy to tell the difference between a straightforward Estate and a complicated one, so it's always a good idea to speak to someone with experience of dealing with Probate and Estates before getting started.
Our Probate Advisors provide free initial advice and guidance over the telephone. We will explain how Co-op Legal Services can deal with your loved one's Estate for you. You won't need to worry about expensive hourly rates, or having to pay a fee calculated as a percentage of the Estate, as we always quote a fixed fee at the very beginning.
Having the Estate dealt with by our Probate Solicitors, gives you the peace of mind that all of your Executor responsibilities will be carried out correctly, and that your loved one's Estate is in good hands.