What are an executor’s duties?

When a person dies leaving a Will, they appoint executors to administer their estate and ensure that their wishes are carried out. Broadly speaking, this could include identifying assets, applying for a grant of probate, settling any taxes and liabilities, and distributing the estate in accordance with the Will. An executor is legally responsible for administering an estate in the correct manner and because of this, some may find it a daunting task.

The Will

It is important that the deceased’s most recent original Will is located and checked to ensure that it has been properly executed. For a Will to be valid, it must be signed by the testator (the person making the Will) in the presence of two independent adult witnesses, who must also sign the Will in the testator’s presence.

There is a common misconception that the executor should invite the family of the deceased to a ‘reading of the Will’. Although this only seems to happen in films, the beneficiaries of a Will are entitled to certain information about it and the estate.

Immediate steps to take following death

There are certain tasks which need to be completed soon after a person passes away.

The first is registering the death at the local registry office. In England and Wales, death should be registered within five days, starting from when the Medical Certificate for Cause of Death is sent to the registry office by the medical examiner. This period includes weekends. Once the death has been registered, the death certificate will be issued, and the executor can purchase additional copies. The current fee for purchasing copies of a death certificate is £12.50 per copy. If a coroner’s investigation is conducted to ascertain cause of death, an interim death certificate may be issued to allow the executor to begin work in the estate administration.

In addition to the death certificate, a certificate for cremation or burial will be also issued. This will allow the funeral to be arranged. When planning the funeral, thought should be given to any guidance the deceased left either in their Will or alongside in a letter of wishes. The person who plans the funeral has the responsibility to settle the funeral invoice and therefore the executor should be involved in signing the paperwork. Banks will often settle funeral invoices direct from the deceased’s bank account if the executor sends this directly to them. This is normally limited to the undertaker’s fees only and do not extend to additional services such as the wake, headstone or florist.

Inheritance Tax and probate

Inheritance Tax (IHT) is payable based on the value of the deceased’s estate as at the date of their death. Once the death certificate is issued, the executor should send this to the banks and other investment institutions to obtain the balances and values as at the date of death. Values of any liabilities owed by the deceased as at the date of their death, such as credit cards and mortgages, will also be required. If the deceased owned property, the executor must ensure that the property is secured and insured. The property should also be appropriately valued for IHT purposes.

Whether or not you will need to apply for a grant of probate will depend on the assets within the estate. Applications for a grant of probate can be either made on paper or online. Again, this will depend upon the nature of the estate. If the value of the estate is more than £5,000 the application fee for a grant of probate is £300. There is no fee if the value of the estate is under £5,000. Extra copies of the grant of probate can be obtained for £16 per copy.

If IHT is payable the probate registry will not issue the grant of probate unless the IHT has been paid to HM Revenue and Customs (HMRC) or an instalment payment option is agreed. Some banks and investment managers can settle the IHT liability directly with HMRC.

The IHT return and the application for the grant of probate are made to the best of the executor’s knowledge. It is therefore extremely important that they make appropriate investigations to ensure that any information given to HMRC and the probate registry is accurate.

Winding up the estate

Once the IHT has been paid and a grant of probate obtained (if necessary), the executor can take steps to close accounts, sell or transfer investments and sell or transfer property.

Once assets have been realised, the executor can proceed to settle all known estate liabilities. For added protection, the executor may wish to enter Statutory Notices into both regional and national newspapers to identify any unknown estate liabilities. Once the notices have been published any creditors have two months to come forward to claim from the deceased’s estate, after which they can look to the beneficiaries.

Should an executor make payments on behalf of the estate, such as purchasing the death certificates, paying for the wake or settling the probate application fee, they should obtain receipts for reimbursement out of the deceased’s estate.

The executor also has an ongoing obligation to accurately and honestly report to HMRC for income tax on income received from the date of death, or capital gains tax arising because of a capital disposal reported to HMRC.

The executor must prepare estate accounts which detail all monies received into the estate, and paid out of the estate, from the date of death. These accounts should be circulated to the residuary beneficiaries prior to distribution of the estate assets in accordance with the Will.

Ultimately, once the estate administration has concluded the estate can be distributed in accordance with the Will to the beneficiaries. There is no strict deadline for how long an executor should take to administer an estate, only that they should do so in an efficient manner.

An important duty

Being an executor is an important administrative duty which should be taken seriously. An executor who breaches their fiduciary duty could be held personally liable by the courts. Our dedicated and knowledgeable team at Birketts can help guide an executor through the estate administration process.