Acting as an executor

Are you an executor under a will?

The executors named in a will have legal power to act as the deceased’s personal representatives. They are responsible for collecting in all the deceased’s money and other assets, calculating the value of the estate, paying any debts and taxes – and distributing the net estate to those entitled under the terms of the will.

What is the grant of probate?

A grant of probate is required to administer the estate, unless the estate is very small. The grant of probate confirms the executors’ legal authority to given to them under the will to administer the deceased’s estate. Executors can apply for the grant of probate either in person or through a solicitor.

What are an executor’s duties?

An executor must carry out the deceased’s wishes in their will. Their duties include discharging all debts and taxes in the estate before paying out any gifts and inheritances under the will. Executors carry out their duties as trustees of the estate. This means they owe a duty of care towards the beneficiaries and the estate.

Importantly, executors are not personally liable for the deceased’s debts, so if there are insufficient funds to pay a debt – the executors do not have to pay the shortfall. However, if an executor breaches their legal duties, resulting in any financial losses for beneficiaries or creditors, they will be personally liable for those losses. Examples of such breaches include paying out legacies before creditors are paid off; failing to collect all the debts due to the estate; selling assets for less than their real value; or acting carelessly so that assets are lost.

To mitigate the risks, particularly in the case of a large or complex estate, many executors prefer to engage a solicitor to act for them. Unlike trustees, who can retire, executors remain responsible for carrying out their duties until the estate administration is complete.

What do I have to do in my role as executor?

The first thing you need to do as an executor is to register the death. The District Probate Registry (if you need to apply for a grant of probate), and any banks and building societies where accounts are held, will need to see an original or certified copy of the death certificate (not a photocopy). It is always sensible to ask for a number of certified copies of the original.

You should also locate the will. If there is no will, you may need to apply for letters of administration. Check the will for any requests about funeral arrangements, and burial or cremation, and to see if anyone else is appointed as executor. Establish how the funeral expenses will be paid. Many people have a funeral fund set aside, however, the bill may have to paid out of loved one’s pockets then repaid out of the estate when funds are available.

All information about the money and assets owned by the deceased need to be obtained. This may include obtaining valuations of a house or other property, and antiques or works of art; bank and building societies accounts; insurance companies, share certificates; National Savings, and so on.

You also need to collect details of any debts and liabilities such as a mortgage, council tax, credit card debts, and so on, so that these can be paid out.

You may need to estimate if the estate is liable to inheritance tax (IHT). Estimate what the value of the net estate is. If it exceeds the IHT threshold, IHT may be payable at 40% on the value of the estate that exceeds the threshold at the time of death (currently £325,000 as at 2017). However, it is vital you take expert advice about whether IHT is payable.

If IHT is payable, you will need to complete an IHT return and arrange for an initial payment of any IHT. IHT must be paid within six months of death, otherwise interest will be charged. However, payment can be delayed for certain assets that are not to be sold, such as land, private businesses and unquoted shares. It can be paid after probate in ten annual instalments with interest.

When you have an estimate of the net value of the estate, you will need to apply for grant of probate (unless it is a small estate). An Oath for Executors must be completed and sworn, and send to the District Probate Registry.

After the grant is obtained

You can then administer the estate, producing the grant of probate as your authority for calling in the assets. You will need to open a bank account for the estate to hold the money on behalf of the estate and beneficiaries, separate from any other funds.

You may need complete tax returns for the deceased and pay any tax due; and pay any estate debts. It is advisable to advertise for any further creditors or potential beneficiaries of the deceased in newspapers, giving at least two months to allow for any such claims. This will protect you should potential creditors or beneficiaries come out of the woodwork later.

You will then need to pay out any gifts and legacies under the will, and distribute the residue to the beneficiaries. If ownership of a property is to be transferred from the deceased’s name, this is done using Land Registry form AS1.

Finally, you will need to prepare the final estate accounts setting out the assets and income of the estate, and what was paid out, when and to whom.

What happens with a small estate?

If the estate is small (ie. under £36,000), you do not need a grant of probate – a certified copy of the death certificate will be sufficient. Institutions such as banks, building societies and insurance companies will require you to complete their own release forms; and insurance companies may ask to see an original copy of the death certificate before paying out.

Can an executor resign?

If you are named as an executor in the will, you have the right to ‘renounce probate’ – so long as you have not performed any executor’s duties. There are many reasons why a named executor may feel unable or unwilling to be an executor. For instance, he or she may be elderly or ill, or may have fallen out with the deceased during their lifetime, may have moved abroad, or they simply feel the job will be too much for them.

All other executors need to be informed. Replacement executors may or may not need to be appointed, depending on the circumstances.

Note that once you have renounced probate, you cannot change your mind and decide to act as executor.