Acting as Executor - FAQ's

Executorship is an onerous role and many executors decide that the interests of the estate and beneficiaries are best served by employing Furley Page to administer the estate on their behalf.

We have set out below a few of the questions most commonly asked by Executors. The list is by no means exhaustive and most executors will have unique questions, determined by the particular nature of the estate for which they are responsible.

What duties do I have as an Executor and to whom do I owe these duties?

You have a duty to administer the estate in accordance with the law. Essentially this means establishing the extent of the assets, safeguarding the assets, arranging payment of any debts due (including any tax liabilities) in the order of priority set down by law, maintaining accounts and distributing balances in accordance with the terms of the will.

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 for 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 expenses can be paid by another and then refunded to him or her if they are for a reasonable amount at a later date. Alternatively, funeral directors may 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 may also be personally liable if you distrute the estate to beneficiaries without settling all the deceased’s debts including any liability to HMRC. You are also liable for the liabilities incurred by the estate i.e. payment of 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 and 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 may be 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, distributions are timed carefully so that a large distribution does not occur in one tax year. With reference to Capital Gains Tax there may be tax advantages in appropriating assets to beneficiaries who have their own annual exemption to use or are exempt from such tax, before the asset is sold.

Finally, with regard to Inheritance Tax an executor is responsible for reporting the value of an estate and details of lifetime gifts to HMRC and may be liable for any Inheritance Tax arising.

This article offers a simplified explanation of some of the duties of an Executor. The law relating to this subject is complex and technical and Executors should seek particular advice relating to the estate that they are administering; please speak to a member of our Probate And Estates Administration team for further information.

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