If you are named as an executor in a Will then your appointment begins as soon as the testator (the person who has made the Will) passes away. From this moment in time you are responsible for dealing with the deceased’s affairs, safeguarding their assets and acting in the best interests of the estate and the beneficiaries.
In practical terms, the executor’s role will often begin by being involved in registering the death and arranging the funeral. However, the responsibility will not end until such time as all liabilities have been discharged and the beneficiaries have been paid in full. This is often months, if not years, after the date of death.
The executor will need to correctly interpret the terms of the Will, fully ascertain the value and extent of the estate and correspond with the beneficiaries throughout the administration. Often they will need to apply to the Probate Registry for a Grant of Probate.
Where Inheritance Tax (IHT) is payable the executor also has an added level of responsibility in reporting to HM Revenue & Customs (HMRC) and calculating the correct amount of IHT due. There are strict reporting and payment deadlines which must be met to avoid interest or penalties. This is not always straightforward and the executor will sometimes need to enter into negotiations with HMRC concerning the valuation of assets or property in the estate. In addition, they will need to make enquiries with the beneficiaries or family members about gifts made by the deceased during their lifetime as this may affect the amount of IHT payable from the estate.
If the deceased was a Self Assessment taxpayer then the executor, again, will need to liaise with HMRC, check what outstanding Income Tax returns need to be completed and then ensure that these are completed and submitted on time. Any outstanding payments on account must be made to HMRC on behalf of the estate.
When selling assets in the estate the executor will need to carefully consider the Capital Gains Tax position and pay any tax due. They may also need to liaise with beneficiaries concerning the sale to make sure that they act in the beneficiaries’ best interests. This can be difficult where a sale must be completed in a short timeframe and there are a number of beneficiaries to consult.
Executors are personally liable for their actions and therefore, should an error or oversight be made by them which results in a loss to the estate, they may need to make good this loss to the beneficiaries.
It is not surprising that acting as an executor can be very challenging at the best of times, let alone following the loss of a loved one. Although every estate is different, and will not always be overly complicated to administer, we would always recommend that the executor carefully considers the task in hand at the outset and seeks a suitably experienced professional for assistance if they have any worries or concerns.
Colleagues in Thursfields’ Wills & Estates Department have a wealth of experience in Probate matters and the Administration of Estates and are able to assist executors in all manner of ways. This may be by purely obtaining a Grant of Probate on the executor’s behalf or in providing a full end-to-end estate administration service.
For more information please contact Edward Jones on 0121 227 3377.