The Duties Of An Executor – Frequently Asked Questions
Things to Consider Before Appointing or Agreeing to Be an Executor
Whether you need to appoint Executors or whether you've been asked to be an Executor, no doubt you have lots of questions about the role. After all, it's a very important one and there's much to consider before appointing your Executors or agreeing to be one.
Our frequently asked questions is a very good place to start.
Understanding the Role of an Executor
People often appoint an Executor or agree to take on the role of an Executor without fully understanding the obligations and responsibilities that accompany the role. The truth is, the role carries a great deal of responsibility and, depending on the complexity of the Estate, it may involve a great deal of work, as well, all of which takes time.
In this section we'll cover some of the essentials that you need to know and understand before appointing or agreeing to be an Executor.
An Executor is someone appointed and named in a Will, who has the responsibility to carry out the instructions detailed in the will. It's important to note that an Executor has control over all of the assets that make up the Estate and, as such, should be someone that the Testator (the person who writes the will) trusts, implicitly.
It's also important to understand that an Executor is legally responsible for the Estate.
Any individual over the age of 18 can act as an Executor and you can also appoint a professional person or company, if you wish.
No, it isn't necessary for anyone to have had any experience to be an Executor but you should understand that, depending on the complexity of the Will, it may involve a lot of work, much of which is of an administrative nature.
An Executor is legally responsible for the value of the Estate left in a Will, until such time as the assets have all been distributed to the beneficiaries.
As an Executor, you can be personally liable for any mistakes you make. For example, if you pay a gift out to a beneficiary who turns out to be insolvent, you could be held liable.
This does depend on the complexity of the Will and the nature of the assets in the Estate but it can involve a great deal of work over a long period of time.
An Executors work isn't finished until Probate has been granted and the assets have been properly distributed between any beneficiaries.
If there is property to be sold, it's not unusual for Probate to take 12 months or longer.
Comprehensive records need to be kept when acting as an Executor, including;
- There needs to be a detailed schedule of all assets.
- A detailed schedule of all monies owed to the Estate.
- A detailed schedule of all debts owed by the Estate.
- The appropriate forms need to be prepared for the Inland Revenue, so that they can assess any Inheritance Tax liability.
- Probate needs to be applied for.
- Accounting records for all transactions made during the whole process.
- Appropriate records showing the correct distribution of the Estate to the beneficiaries, as per the instructions in the Will.
- In addition to this, you'll need all records relating the valuation and sale of any assets, records of any fees and expenses, records relating to the collection of any monies owed to the Estate and the payment of any debt owed by the Estate.
Plus anything else pertinent to the work carried out.
These are needed so that an Executor can demonstrate that they've carried out their responsibilities correctly and in accordance with the Will, just in case any beneficiary named in the Will, anyone contesting the Will or any official organisation questions the process.
The records need to be kept for 12 years.
Appointing Executors
Executors are the people appointed by you, in your Will, to carry out your instructions and, as such, should be people that you trust, implicitly.
Any individual over the age of 18 can act as an Executor and you can also appoint a professional person or company, if you wish.
Up to four Executors may be appointed but it is wise to appoint at least two.
It's best to avoid having a sole Executor.
Yes, an Executor can also be a beneficiary.
In fact, it's quite common for the Executors to be the husband/wife and/or children of the Testator.
This is something that should be considered for two reasons;
- Depending on the size and complexity of an Estate, there's a lot of work and a lot of responsibility placed on the shoulders of the Executor(s). You need to make sure that anyone chosen to be an Executor is willing to take on the role. You can find out more about the duties of an Executor here.
- Any Testator needs to consider whether their Executors have the time, the skills and the desire to carry out their wishes, as per the instructions in the will.
Having considered these points, it may be deemed preferable to appoint a professional person or company to act as executor. However, you do need to bear in mind that there will be a charge for this, which can be substantial, depending on who's instructed and the complexity of the Estate.
This would be a question for the professional or company you have in mind.
It's quite common for a solicitor or firm of solicitors to act as Executor. Whilst the charges for this service will vary from one company to another, fees are often related to a percentage of the value of the assets in the Estate and can, as a result, start to add up to a significant sum of money.
You need to make sure that you understand exactly how the cost of their services are calculated and what the total is likely to be, before you make the decision to instruct a solicitor.
There are also companies that offer this kind of service for a fixed fee. In fact, we offer such a service, here at Heritage will Writing and you can find out mere here.
In the event that a professional person or company gets appointed as Executor, provision needs to be made for their charges in the Will, by adding a 'charging clause'.
It's always a good idea to appoint at least two executors, just in case one or more of them are unwilling or unable to carry out the role, for some reason, when the time comes.
One or more Reserve Executors can be named in a Will. They can step in at the last minute should an appointed Executor be unwilling or unable to take on the role.
The Duties of an Executor
The executors are responsible for many things and this section covers the main points.
The Executors should register the death of the Testator and obtain copies of the death certificate.
A number of copies may be required, not only before the funeral takes place, but also for each of the funds that may have to be released or transferred, such as;
- Bank accounts
- Insurance policies
- Shares and other equities.
It's a good idea to gauge how many copies are needed, in advance, because many organisations will need sight of an original Death Certificate before releasing funds.
Copies obtained from the Registry of Births Deaths and Marriages are regarded as ‘originals’. A photocopy of the certificate isn't.
The Executors should arrange the funeral in accordance with any instructions contained in the Will.
The cost of the funeral will usually be the first expense paid for from the deceased’s estate.
Enquiries should be made about the existence of any prepaid funeral plan, something that's becoming increasingly popular amongst people wishing to safeguard against the effects of inflation.
When banking organisations are notified about a death, it's normal for them to freeze any existing accounts.
Because of this, Executors need to open a Personal Representative's bank account, which will be used for the receipt of money due to the Estate, the collation of money from organisations holding funds (banks, building societies, Insurance Companies etc), the payment of any debts owed by the Estate, the payment of any Inheritance Tax to the Inland Revenue, the payment of any Probate fees, the payment of any expenses incurred and the distribution of the funds to the beneficiaries.
All Executors are jointly and severally liable for the funds held, prior to their distribution.
Executors need to inform all relevant persons and organisations of the Testator's death. That includes banks, building societies, life assurance companies, employers, local authorities, Inland Revenue, benefit agencies etc.
Every person and organisation they need to have dealings with whilst carrying out their role will need to be advised.
Organisations that hold funds will require an original copy of the Death Certificate and/or a copy of the Will to establish who the executors are, before they will release those funds to the Executors.
The Executors will need to arrange for a valuation of the Estate. This will include the house and its contents, other personal effects, investments in savings plans, equities, life policies, building societies etc.
Once the valuations have been carried out, they need to draw up a detailed schedule of all the Testator’s assets.
Any money owed by the Testator needs to be assessed and the Executors should draw up a full schedule of the debts that must be paid from the proceeds of the Estate.
These will include mortgages, income and capital gains taxes, bills, credit cards, loans and overdrafts.
The Executors need to assess the money owed to the Estate, as this forms part of the Estate.
A detailed schedule should be drawn up and steps taken to collect the outstanding money.
Once Probate has been granted, copies of the Grant of Probate should be sent to everyone who owes money to the Estate. The Executors now have the legal authority to pursue any debts owing to the Estate.
Once the Executors have established the full value of the Estate by valuing the assets, assessing money owed by the Estate, assessing money owed to the Estate and allowing for the costs involved in selling any assets, they need to complete the forms required by the Inland Revenue Capital Taxes Office, so that it can be established whether any Inheritance Tax is due.
When Inheritance Tax is due, the Executor’s account of the Estate is passed to the Inland Revenue and the Inheritance Tax becomes due and needs to be paid.
There will be circumstances where part of the Estate has to be sold in order to to pay the Inheritance Tax but this doesn't change the fact the the HMRC will expect payment, immediately.
Where there aren't sufficient funds to pay the Inheritance Tax prior to selling the assets a short term loan may need to be taken. Banks can arrange loan facilities to pay the tax straight away.
It's important to note that the Grant of Probate cannot be issued until the tax has been paid, which means that the Executors can't distribute funds or complete their work before then.
The Executors need to complete the probate forms and send or take them to the Probate’ Office along with the original Will, The Death Certificate and the Inland Revenue account.
An appointment will be made for the Executors to swear the papers within about 5 to 6 weeks of receipt at the Probate Office and once any Inheritance Tax has been paid.
When the Grant of Probate is received, the Estate can be divided according to the terms of the Will.
The Executor must prepare and sign accounts detailing all assets, any debts and the expenses involved in liquidating any assets and reaching a net value for the Estate. They also need to have account that show who has received what from the distribution.
The Executors must be able to show that they acted in accordance with the terms of the Will, in case there's any dissent from the family of the deceased.
All Papers, including the Grant of Probate, the accounts and any documentation pertaining to the work carried out, need to be kept for 12 years.
FAQ's Menu
Please Note
The information provided here is intended to address the types of questions that people are often concerned about.
To see an outline of what we do and how we deliver services for our clients, please visit the Our Services page. You will find information on the key aspects of creating your will including:
Personal Reviews, Will Writing, Estate Planning & Tax Management, Lasting Power of Attorney, Discretionary Trusts, Special Provisions & Assurance (disabled beneficiaries), Severance of Tenancy, Secure Document Storage.
If you have a specific question, want more detailed information or want your will professionally prepared, then please just get in touch.