Understand Your Responsibilities Before Agreeing To Be An Executor
It’s essential that you understand exactly what the role entails before agreeing to be an Executor...
An Executor is someone who is named in the Will of a deceased person and they are responsible for winding up the deceased’s affairs, settling outstanding debts and distributing the Estate to any beneficiaries. Sometimes more than one person will be named as an Executor.
Being asked to be an Executor is a major responsibility because (in England and Wales) you can be held financially liable if you make a mistake during the administration of an Estate. It’s essential that you understand exactly what the role entails before agreeing to be an Executor.
Do I have a choice when accepting the role of Executor?
Firstly, it’s important to understand that in the majority of cases you will not be legally obliged to accept the role of Executor. The role can cause significant stress at a time of grief, so if you do want to step down then, normally, you will have the opportunity to do so. Providing there’s nothing in the Will that prohibits you from stepping down, and you haven’t started to administer the Estate, you will be able to sign a Renunciation document, which grants you permission to resign the role.
How long will it take to administer the Estate?
The size and complexity of the Estate will determine how long it takes to fully administer it, as well as the amount of time you, as the Executor, need to commit to it. It can take over 12 months to administer an Estate.
Numerous other factors can make it longer to deal with an Estate – including if the deceased had any complex joint investments or ran their own business. Also, if a Will is set up in trust it can continue running for years, meaning your responsibilities as Executor will be more long-term.
Your legal duties
If you become the Executor of a Will, then you will often be required to get a Grant of Probate. This will give you the legal authority to deal with all of the deceased’s assets, including any property, possessions and money. You’ll need to notify all relevant organisations of the person’s death as soon as possible – such as HMRC and utility companies.
You will be responsible for gathering all relevant information in relation to the Estate and the deceased, including any assets, property and bank accounts, along with any outstanding debts such as loans or mortgages. If any information, in terms of debts or other assets is missed, then it could cause complications down the line.
It will be down to you to correctly value the Estate, prepare and distribute any accounts to all the relevant parties, and distribute any assets to the beneficiaries named in the Will.
Your tax duties
After you’ve ascertained the total value of the Estate, you’ll need to calculate whether any Inheritance Tax (IHT) will be payable, and how much there is to pay. Working out IHT isn’t always straight forward because a number of factors can complicate things, such as unused tax-free allowance that can be passed to a surviving spouse or civil partner, exempt beneficiaries and gifts.
If any IHT is due, it will be your responsibility to complete all relevant IHT forms and submit them to HMRC. You will need to be able to prove that you have paid any IHT due or that there is none to be paid before applying for the Grant of Probate.
Keep in mind that if any IHT due is not paid then, as the Executor, you will be responsible for the shortfall, even if you’re not a beneficiary. Consider getting a clearance certificate from HMRC that confirms there is no further IHT to be paid, before handing over money and assets to any named beneficiaries.
More risk and responsibility
The above mentioned duties don’t cover everything, as a lot of what you will be required to do as the Executor will depend on the specific Estate you are dealing with. Generally, the larger an Estate is, the more complex it will be and the more risk and responsibility it will come with.
There are also a number of other possible scenarios, which could complicate things further. For example, a disappointed beneficiary who has been excluded from the Estate could decide to mount a legal challenge to the Will. This will typically occur within six months from the date of the Grant of Probate. If you, as the Executor, have already distributed assets before this time, then you could be held personally responsible for errors.
Being entrusted to carry out the wishes of the deceased can be onerous and time consuming, even if their Estate is relatively modest. Getting extra help and professional advice can be beneficial for sharing the burden of administering the Estate properly, as well as help you deal with the Probate process.