executor

Executor duties during probate

Table of Contents

What are the responsibilities of an executor?

Being made an executor of someone’s will can be daunting. But what is your role, and what do you need to do? Richard Guy of Birketts explains the main responsibilities of an executor in England and Wales.

What is an executor of a will?

When somebody dies, the executor named in their will has to ensure that the deceased’s estate is properly wound up and their wishes in their will are carried out.

 

There are many legal responsibilities associated with being an executor, including potentially:

  • registering the death
  • arranging the funeral
  • valuing the estate
  • paying any inheritance tax
  • applying for probate
  • sorting the deceased’s finances
  • placing a deceased estates notice
  • distributing the estate
  • keeping estate accounts

Immediate things to do when someone dies

Some things need to be done almost immediately when someone dies. The first thing is to register the death, which is normally required within five days in England, Wales and Northern Ireland (8 days in Scotland). This is normally done at the nearest registry office (usually appointment only) where the person died and will usually be a relative or someone who was with the deceased.

To register the death, you’ll need either:

  • a medical certificate from the GP or hospital doctor
  • permission from the coroner that you can register the death

Once you have registered the death, the registrar will give you a certificate for burial and cremation, and a funeral can be arranged. It should be noted that a person arranging a funeral is liable for the cost. Still, if there is enough money there, the deceased’s bank will typically agree to pay the undertaker’s bill (and only the undertaker’s bill, not any “add-ons”).

 

The funeral is usually the executor’s responsibility, and it is essential to be aware of any instructions or funeral plans that had been left. Sometimes these wishes are contained in the will, so it is worth checking with the solicitors at this stage to locate a will.

 

Once a will has been located, the proof of the executor’s authority to deal with and administer the deceased’s assets is the grant of probate, a legal document issued by the Court (at a Probate Registry). However, there are some things you’ll need to do before you can apply for a grant of probate.

Dealing with inheritance tax as an executor of a will

First, you must deal with inheritance tax (IHT) via HMRC. Then, it’s the responsibility of the executor (or personal representative) to assess the estate, complete the appropriate IHT forms, and pay any IHT due. Consequently, this part of the executor’s role can take some time, depending on the nature of the estate and its complexity.

 

As IHT is based on the value of the estate at the date of death and that information must also be submitted to the Court, the first task will be to ascertain and value the deceased’s assets and liabilities. The executor will therefore have to deal with several different organisations and professional valuers to get this information together and must also assess what exemptions and reliefs apply to calculating the final IHT liability.

 

The grant of probate cannot be obtained until the IHT that is immediately due to HMRC has been paid, and most of the deceased’s assets cannot be realised until a grant is issued (banks will release assets for specific purposes, such as IHT and funerals). Executors must therefore ensure that banks and building societies are prepared to release funds to pay any IHT to HMRC.

 

If that is not possible, tax payable on land assets can be paid by annual instalments, reducing the immediately due IHT. Sometimes a loan can be obtained, or arrangements can be made with HMRC.

Applying for a grant of probate as an executor of a will

Once any IHT has been paid, then the grant of probate can be issued. You can apply for a grant of probate online via Gov.uk or by post. You can use the online probate service if you’re the executor and you:

  • have the original will
  • have the original death certificate or an interim death certificate from the coroner
  • have already reported the estate’s value to HMRC unless the value of the estate is below the tax threshold

The probate application fee is £215 if the value of the estate is £5,000 or over. There’s no fee if the estate is under £5,000. Executors need to obtain several court-stamped copies of the probate to enable them to deal with the asset holders, and these extra copies of the probate cost £1.50 each. Please note: these fees may rise in future.

Settling the deceased’s finances as an executor of a will

An executor is also responsible for dealing with the deceased’s financial liabilities. This includes dealing with the income tax position of the deceased from the date of death to the end of the administration period and any capital gains tax liability on the disposal of assets. If there was an IHT liability, it is important too that the executors seek confirmation from HMRC that there are no further enquiries and that the position is settled.

Suppose there are insufficient assets in the estate to settle all liabilities. In that case, the estate will be insolvent, and there is a prescribed order that the executors must follow when settling liabilities.

Placing a deceased estates notice as an executor of a will

Before any distribution can occur to the beneficiaries, executors must protect themselves against liabilities they may not be aware of. Therefore, it is advisable to place a deceased estate notice in The Gazette and in at least one local newspaper to the deceased. Placing a deceased estate’s notice is deemed to show that enough effort has been made to locate creditors before distributing the estate to beneficiaries. Still, it does not exonerate executors who have ‘notice’ of possible debt.

 

As executors are personally liable, it is essential to protect their position. They should also consider not distributing the estate until after at the very least six (if not nine) months from the date of the grant of probate to ensure that there are no any claims by anyone who thinks they may have been unfairly disinherited or not provided for under the Inheritance (Provision for Family and Dependents) Act 1975 (England and Wales only).

Administering the estate as an executor of a will

Once probate has been granted and the deceased’s finances have been settled, an executor can begin distributing the estate. An executor will need to call in the assets, such as bank accounts, to an executor’s account or client account if solicitors are acting for them. Other assets, such as shares and investments or property/land, can either be sold or transferred to beneficiaries of the will.

The executors will therefore need to consider who benefits under the will and discuss with them how they would like to receive the estate’s assets. It may be that some beneficiaries will be happy to receive the assets themselves, while others may want everything sold and the proceeds distributed per the will. The executor may need consent from all beneficiaries if any assets are to be transferred ‘in specie’. If the will provides that a trust arises, then the executors will need to consider what to do with the assets considering their potential future duties as trustees.

Keeping estate accounts as an executor of a will

Finally, to demonstrate they have administered the estate properly, the executor should keep full records and prepare a final set of accounts for the estate. These accounts should be shown to beneficiaries and their approval of the accounts sought.

Acting as an executor means carrying out your loved one’s last wishes and can be an invaluable help to the family, but an executor’s responsibilities are extensive and carry personal liability, so it is important where appropriate to seek specialist advice.

 

About the author

 

Richard Guy is a Senior Associate at Birketts LLP. He specialises in Private Client work, advising on a wide range of matters, including wills and the creation and administration of trusts.