Birketts’ Associate Laura van Ree explains what you need to do if you are appointed as an Executor to a Will.
What are Executors?
Executors are the people appointed within a Will to deal with a person’s property and affairs upon death. Executors undertake the ‘estate administration’ and have a variety of responsibilities.
If someone dies without a Will, it is Administrators who deal with an estate instead. Rules set by Government determine who inherits the estate and who should act as an Administrator in those circumstances.
Can I refuse to act as an Executor?
An Executor can refuse to administer the estate as long as they do so before getting involved, otherwise known as ‘intermeddling’. If you have been appointed as an Executor but do not wish to act in this role you should speak to a legal professional as soon as possible so you are aware of your options and can take the relevant steps.
Executors’ responsibilities and liabilities
Executors must perform their duties in accordance with both the terms of the Will and various legal statutes. Executors can face personal financial liability for any omissions or mistakes they make. Perhaps harshly, such liability can arise even if an Executor is unaware of a particular duty or action that needs to be taken. In some instances this personal liability can even continue after the administration period has ended. Some of the Executors’ main duties include the following:
- Executors must pay all the deceased’s debts and liabilities from the deceased’s assets. An Executor can be held personally liable for any unpaid debts, including those of which they are unaware. This ongoing personal liability can be removed if certain legal procedural steps are taken.
- Executors are responsible for completing and submitting inheritance tax paperwork to HMRC and making payment of any inheritance tax that is due. As part of this process Executors must investigate various different aspects of the deceased’s financial affairs in order to ascertain accurate information. They can face personal penalties imposed by HMRC if they do not do this thoroughly or within certain time limits.
- Executors are also responsible for completing income tax and capital gains tax returns and paying any outstanding tax. This applies for three periods: any years in which the deceased failed to complete their tax returns, the tax year of death and the period in which the estate is being administered.
- Executors must identify and deal with any claims against the estate, for example from creditors or disappointed family members. Executors should delay distributing the estate until all the relevant time limits have expired or they can again face personal liability.
- Executors are often also appointed as Trustees, for example where a Will dictates that money should be held for a beneficiary until they reach a certain age. The Will might be silent as to the various Trustee responsibilities but there are statutory laws which apply. Trustees can be held liable for breaches even if they are unaware of the extent of their powers and duties. Therefore it is very important that you take advice about what you can and cannot do if you are ever appointed as a Trustee.
How can Birketts help?
We have an experienced team of Private Client professionals who would be happy to discuss your particular circumstances and requirements. If you are acting as an Executor or Trustee and the estate or trust has sufficient funds, the cost of taking this legal advice can be met by the estate or trust.
This article is from the summer/autumn 2020 issue of Private Lives, our newsletter covering the key legal and tax issues that individuals face. To download the latest issue, please visit the newsletter section of our website. Law covered as at August 2020.
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The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at September 2020.