The Role of an Executor
Have you been appointed as an Executor for someone? Do you know what this involves? The purpose of this article is to explain your role and duties as Executor.
An Executor is appointed under a Will to deal with the administration of the estate of a person after their death. It is an important role, carrying a lot of responsibility and should not be undertaken lightly. Depending on the value of the estate of the person who has died, the role can be quite daunting, particularly if you are not the next of kin – but accountable to them! If in any doubt you should seek professional legal advice and you can instruct a solicitor to deal with some parts of the administration (such as applying to the Probate Registry for a grant of probate, or completing any inheritance tax account that may be required) or the whole administration (leaving you with paperwork to sign, but none of the legwork required!)
The first thing for the Executor to do is to arrange the funeral and register the death. Once these matters have been attended to, you need to ascertain the extent of the estate of the person who has died. The funeral can be paid for from one of the deceased’s bank or building society accounts which hold sufficient funds.
The next step is to review all the deceased’s paperwork and contact all the financial institutions connected with the estate. You should ask family members or close friends/neighbours if they have any relevant information about the estate – the deceased may have made lifetime gifts that may affect the inheritance tax position for their estate. They may have been a beneficiary of a trust that either comes to an end or forms part of their estate for inheritance tax purposes. The deceased may have had assets abroad or they may have had credit cards, loans or mortgages outstanding that need to be repaid from the estate. They may have been in receipt of various benefits that need to be stopped. You will need to check if the deceased was a taxpayer at the date of their death and complete any outstanding tax returns that may be due. All assets and liabilities need to be accounted for and an executor’s bank account needs to be opened. If the deceased had a property at the date of their death, you need to ensure that this is secured, insured (and the insurance company have been advised of the death) and regularly checked.
Once you are satisfied that you have full details of the assets and liabilities of the estate, you can apply for a grant of probate. If inheritance tax is due on the estate, please note that this is to be paid within 6 months of the death of death and must be paid before probate can be granted. This will mean accessing funds from the estate prior to probate being granted so additional paperwork will be required for this. Where an estate includes a property, the inheritance tax due on that property can be paid by instalments; but interest will accrue on the unpaid inheritance tax.
Once probate has been granted, you will need to collect all the assets due to the estate, discharge any outstanding liabilities, fully review the income tax, capital gains tax and inheritance tax positions for the estate and pay any taxes becoming due. You will need to arrange a sale or transfer (depending on the content of the Will and the beneficiaries’ instructions to you) of the deceased’s property and thereafter finalise the utility accounts, cancel the insurance and sort out the chattels if you have not already done so. Once all matters are completed, you can prepare full estate accounts and distribute the estate in accordance with the terms of the Will.
This will all take a lot of time and effort and sometimes expertise – why not let us help you?
For help and advice in relation to this matter, please contact Maxine Heppenstall via [email protected] or 01943 609969.