The role of executor to the estate of someone who has died comes with a number of responsibilities.
An executor has the task of administering the deceased’s affairs, to include paying debts, selling assets and preparing estate accounts.
The role is onerous. It can be time-consuming and sometimes complex, depending on the estate in question. Being an executor also requires you to take on liabilities and you should ensure that you are prepared for this before you start work.
Protecting the estate assets
As executor, you are bound to act in the best interests of the estate at all times and protect the assets it contains. This includes ensuring that property is properly insured, informing asset holders of the death so that they can freeze accounts and defending any legal action against the estate. If someone makes a legal claim against the estate, the executor may need to instruct solicitors on behalf of the estate to protect the assets for the beneficiaries named in the deceased’s Will.
Settling the estate debts
You will need to identify all of the deceased’s debts and arrange for them to be paid in full. This includes calculating Inheritance Tax, which can be complex. It includes finding out how much the deceased gave away in gifts over the seven years before their death, as this sum may attract Inheritance Tax on a sliding scale.
All of the estate assets must also be identified and valued so that the amount due can be calculated. In respect of some assets such as valuable jewellery, cars or property, a professional valuation should be obtained.
In some cases, the deceased may also owe income tax and/or capital gains tax. This will need to be dealt with for any outstanding periods as well as for the tax year during which the deceased died and also for the estate administration period.
It is possible to advertise in the press for unknown creditors to come forwards if you are not sure of the full extent of the debts and liabilities of the deceased.
Executors can be held personally liable for any losses they cause to the estate, even if they were as a result of a genuine error. Examples include the following:
- Failing to secure and insure a property that subsequently suffers loss or damage;
- Not identifying creditors who demand payment after the estate has been distributed to beneficiaries, to include outstanding tax;
- Not arranging for bank accounts to be frozen, leading to loss of funds;
- Not identifying all beneficiaries entitled to inherit;
- Liability for errors made by another executor;
- Not prioritising debts correctly, for example, some debts such as Inheritance Tax take priority, while other creditors will share the available funds if all debts cannot be cleared in full;
- Paying money to a bankrupt beneficiary instead of to their trustee in bankruptcy.
If you have been made an estate executor and you would like assistance with the administration, you can instruct a probate solicitor to deal with matters on your behalf.