Acting as Executor-FAQ's

At Furley Page we acknowledge that it is an emotional and confusing time when you lose a close relative or friend. Sometimes it can be made more stressful by the discovery that you are an Executor of the deceased's will. Many people who are appointed as an Executor in a will are unaware of the duties that this office confers on them in respect of the administration of the deceased's estate.

Below we have set out just a few of the questions that are most commonly asked by newly appointed Executors. The list is by no means exhaustive and each Executor will have unique questions, which relate to the administration of each particular estate.

• What duties do I have as an Executor and to whom do I owe these duties?
  First you have a duty to the creditors of the estate, i.e. people that the deceased owed monies to, for example the Inland Revenue. Your duty is to ensure that the liabilities of the estate are established and duly settled. Secondly you have a duty to the beneficiaries of the estate. The beneficiaries must be notified of their entitlement and are also entitled to know how their legacy is calculated. Thirdly you have a duty to administer the estate in accordance with the Will and the law. This means ensuring that all the appropriate forms are completed and all authorities are notified. This includes completion of any Inland Revenue forms, obtaining the Grant of Probate and drawing up simple estate accounts. It also includes notifying all the business and other relevant authorities that the deceased had contact with, i.e. utility companies, council tax, and social services.
• What is a Grant of Probate?
  The Grant of Probate is the document which declares that you have been appointed Executor. By applying for the Grant you confirm that you will carry out the duties imposed on you. It also states the value of the deceased's estate and authorises you to call in the assets, i.e. close any bank accounts and sell any assets.
• What acts can I carry out before obtaining the Grant of Probate?
  Before the Grant of Probate is obtained you can, by producing the death certificate, stop any bank accounts, arrange for the funeral, and request from each relevant institution confirmation of the value of any assets held by the deceased at the date of their death. You are also able to carry out any act which is necessary for the protection of the assets of the estate, for example, insuring property.
• How do I pay the funeral expenses?
  Quite often banks and building societies agree for the funeral expenses to be paid out of any monies held on account with them. If this is not possible, the funeral account can be paid by another and then refunded to him or her at a later date. Alternatively, arrangements can be made with funeral directors for them to wait for payment until some assets are realised but they may impose a late payment surcharge on the account for doing so.
• By acting as an Executor, can I be personally liable in any way?
  Executorship is for life! You can never retire, even after the estate has been administered. If further assets come to light after the administration has, in principle, been completed, it is your responsibility to deal with them in the appropriate manner. As Executor you are liable if you over distribute to a beneficiary to the detriment of another. You are also liable for the liabilities incurred by the estate i.e. payment of probate valuation fees, insuring property, and for any tax liability.
• Can I be paid for my services as Executor?
  You cannot be paid for your services as an executor, but you can be reimbursed for out of pocket expenses properly incurred by virtue of carrying out your duties. A professionally qualified executor can be paid for their services, and an appropriate clause should be in the will to this effect.
• Do I need to instruct a professional to help me administer the estate?
  You do not have to instruct a professional to assist you in administering an estate. Although a fee would be charged by a solicitor who did assist you, the fee would be paid out of the estate. Professional assistance offers a number of advantages. A professional can often act as a mediator and thereby avoid family disputes; the executor can avoid personal liability by ensuring that proper advice is obtained. A professional can identify tax saving opportunities and apply them in the appropriate circumstances. A professional can produce any necessary accounts and draft any official documents.
• As an Executor, am I liable to pay tax?
  Yes. Income Tax, Capital Gains Tax and Inheritance Tax are all liabilities that are payable by an Executor. In relation to Income Tax, it is important to make sure that when the administration of an estate straddles more than one tax year, that distributions are timed carefully so that a large distribution does not occur in one tax year. With reference to Capital Gains Tax there are tax advantages in appropriating assets to beneficiaries who may have their own annual exemption to use or are exempt from such tax, before the asset is sold. Finally, with regard to Inheritance Tax it is important for an executor to make full enquiries into the deceased's gifting history as lifetime gifts may increase any liability to inheritance tax.

This article offers a very simple explanation to some of the duties of an Executor. The law relating to this subject is complicated and sometimes technical and Executors should seek particular advice relating to the estate that they are administering.

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