The executor to an estate has the job of winding up someone’s affairs after their death. It is a job that involves both responsibility and personal financial risk.
After someone has died, their executor, named in their Will, has the role of administering their estate and ensuring that the beneficiaries receive everything to which they are entitled. It is important that the correct procedure is followed and that the executor (or administrator, if the deceased did not leave a Will) acts in the best interests of the estate and the beneficiaries at all times.
Dealing with an estate administration
The executor or administrator will need to identify all of the assets in the estate and value them. They will then need to calculate and pay Inheritance Tax, where this is due, and apply to the Probate Registry for a Grant of Probate or, where the deceased did not leave a Will, a Grant of Letters of Administration.
Once the grant is received, assets can be sold, to include property, and debts should be cleared. Estate accounts should also be prepared and approved before the estate is distributed to the beneficiaries.
Risks in estate administration
Clearing debts – the executor or administrator needs to ensure that all of the deceased’s debts are identified and paid. This may involve advertising in the paper for creditors to come forward. Failure to clear debts may mean that a claim is made against the executor in the future. The executor may be liable, even if they were unaware of the existence of the debt.
If the estate is insolvent, i.e. there are not enough funds to pay all of the debts, it is essential that the executor pays creditors in strict order of priority. It is recommended that legal advice is sought to ensure that this is done and personal liability avoided.
Where debts are not paid on time, for example, if an outstanding tax liability is not cleared, and a penalty is imposed on the estate, the executor will be liable to pay this because it arose through their error. The executor will be liable for any losses to the estate, even if they occur because of a genuine mistake.
Identifying beneficiaries – the executor or administrator must also ensure that all beneficiaries who are entitled to inherit are identified. This is not always straightforward, for example, where the deceased has left their estate to be shared between their children and it is not clear how many there are or where the deceased did not leave a Will and beneficiaries entitled to inherit under the Rules of Intestacy must be located.
Again, it may be advisable to place advertisements for beneficiaries to come forward. Failure to identify a beneficiary may mean that the executor faces a claim in the future for which they could be personally liable.
Claims against the estate – the estate may face a claim from someone who believes they are entitled to a share of the estate. The executor or administrator should remain neutral and not actively defend the claim or they may become personally liable for paying the claimant’s legal costs if the claim succeeds.
Disputes – following a death, disputes could arise between those with an interest in the estate. It is important to deal carefully with these to avoid personal liability.
Professional advice and support
The role of executor or administrator is often more complex than initially anticipated, with a degree of risk to the individual carrying out the role. Executors that do not take professional advice can often fall foul of responsibilities they are not aware of, leading to liability which they could easily have avoided if they had spoken to a legal adviser.
An experienced probate lawyer will be able to ensure you follow the correct procedure throughout and that your exposure to personal liability is minimised.
The job of an executor can also be exceptionally time-consuming over an extended period. Seeking professional help in dealing with the administration can free you from the time-commitment of the role, whilst at the same time ensuring the estate administration is handled competently and comprehensively.
For further details on how BakerLaw might assist you as an executor or administrator, please visit our Probate & Estate Administration page, here.
Contact us at BakerLaw
If you are an executor or administrator and would like guidance or assistance on how to deal with the administration of an estate, please call us on 01252 733770 or email us at email@example.com to make an appointment with one of our expert Private Client Probate lawyers. We look forward to hearing from you.
This article is not a definitive statement of the law. It is designed as a free update on the law at the time of publishing. It is not a substitute for legal advice on specific facts and circumstances. BakerLaw LLP and/or the writer accepts no liability or responsibility for reliance on this article and recommends that you seek independent legal advice on your specific circumstances prior to taking any steps.