When someone dies, the executor named in their will is responsible for ensuring that the deceased’s estate is administered properly, and that the deceased’s wishes and instructions are carried out in accordance with the provisions of their will.
If you have been chosen to act as an executor, you were most likely chosen because:
The decision of who to choose as executors in the deceased’s will would have been an important one, and one which the deceased would not have taken lightly. As such, it is usual for someone acting in their capacity as an executor to perhaps feel overwhelmed by how demanding, how time-consuming and how complex the role can be. However, your role as an executor need not be daunting. In this article, we consider the role and responsibilities of an executor, and the steps individuals can take to perform best in their role as an executor.
What are the responsibilities of an executor?
An executor of a will has many legal and practical responsibilities, including:
Registering the death of an individual needs to be completed within five days of the death occurring. It may be the case that someone else (such as a family member or friend of the deceased) completes this step instead of an executor. Whilst it is not something an executor is necessarily required to do, it may be something that an executor will need to do if there is nobody else who can.
To register the death of an individual, you will need to contact a registry office, and in turn, you will receive the death certificate for the deceased.
Throughout the estate administration process, the executors will require the deceased’s will. Asset holders may require copies of the will to prove that the individuals contacting them to obtain the assets are indeed appointed as executors. Further, the Probate Registry usually requires possession of the original will before issuing the Grant of Probate (‘the Grant’).
Therefore, at the start of the estate administration process, it is important for the executors to locate the deceased’s original will (or a copy if the original will is not available), and store it in a safe place.
It is often the case that the deceased has included instructions with regards their funeral wishes and arrangements in their will and, if so, it will be the executors’ responsibility to arrange their funeral, although in some circumstances it may be more suitable for a close family member or friend of the deceased to arrange the funeral instead.
It is important to check whether the deceased had set up a funeral plan during their lifetime, and whether they had a funeral policy, life insurance policy or pension scheme which may cover or contribute to the costs of the funeral arrangements.
If the deceased had a bank or building society account, it may be worth contacting them as some banks and/or building societies are prepared to release some of the deceased’s funds to the executors to cover the cost of the funeral.
This can be done either by using the government’s Tell Us Once service or by contacting government organisations individually.
The Tell Us Once service will notify HM Revenue and Customs (‘HMRC’), the Department for Work and Pensions, the Passport Office, the Driver and Vehicle Licensing Agency and the local council of the death.
The executors should contact banks, building societies, accountants, stockbrokers, life insurance companies, NS&I, pension companies and utilities providers, among others, notifying them of the death and requesting values of assets and sums of debts owed as at the date of death.
The executors are also required to investigate whether the deceased made any lifetime gifts, focusing particularly on whether the deceased made any gifts within the 7 years leading up to their death.
The executors may also need to organise valuations of property and/or personal chattels falling within the deceased’s estate.
In complex estates, or in circumstances where the executors are not fully aware of all the deceased’s assets and liabilities, it may be appropriate for the executors to advertise for creditors, by placing a notice in The Gazette and in at least one local newspaper to announce the death of the deceased. The notice acts as an official record informing any potential creditors that the individual has passed and provides them with an opportunity to make their claims against the estate to recover debts owed.
As a starting point, IHT is payable on the value of the deceased’s estate over the IHT ‘nil rate band’ threshold which, at the time of writing, is £325,000.
There are exceptions to this, for example if the deceased’s estate qualifies for spouse exemption because they left their entire estate to their spouse or civil partner, or perhaps the deceased gifted their entire estate to a charity, meaning it would qualify for charity exemption.
In circumstances where the deceased gives away their home to their children (including adopted, foster or stepchildren) or grandchildren, then an IHT ‘residence nil rate band’ allowance may also be available to the estate of £175,000, which increases the estate’s overall IHT threshold to £500,000.
As well as this, if the deceased was married or in a civil partnership, and their spouse or civil partner predeceased them, the estate may also benefit from any unused threshold of their late partner’s estate when they die.
There are also additional reliefs and exemptions available, which may apply on a case-by-case basis.
On estates where IHT is payable, at the time of writing, it must be paid by the end of the sixth month after an individual’s death before interest becomes chargeable. The executors will also need to submit a full Inheritance Tax Account to HMRC.
In some instances, upon contacting some of the asset holders listed in Point 5 above, assets may be released before the Grant is obtained by the executors. If IHT is due on the estate, any monetary assets collected can be used to pay the same. However, some of the assets will only be released upon providing the Grant to the asset holders.
If not all the IHT to be paid is available by the end of the sixth month, executors may borrow money for the purpose of paying it. Penalties will then apply after one year from the end of the month in which the death occurred, for non-submission of the Inheritance Tax Account.
On estates where IHT is not payable, the executors may still need to report the estate’s value to HMRC in certain circumstances. If none of the circumstances apply, the estate is deemed an ‘excepted estate’, which means that the executors will not need to report full details of the estate’s value to HMRC.
The Grant provides the executors with legal authority to access bank accounts and obtain any remaining funds not yet released by asset holders, sell assets and settle outstanding debts and formally administer the estate.
In order to obtain a Grant, the executors will need to complete a probate application form or apply online on the gov.uk website. The probate application also requires a legal statement to be submitted which provides details of the person who died, details of the estate and information in relation to the executors applying (and, if applicable, not applying) for probate. The legal statement also includes a declaration to be made by the executors.
At the time of writing, the probate application fee is £273, and extra copies of the probate document can be ordered at the time of making the application for £1.50 each.
Once the application has been submitted, the Probate Registry will require a copy of the signed legal statement and declaration and the deceased’s original will.
Once the executors have received official copies of the Grant, these can be provided to any asset holders who require them to release the assets to the executors. Once the executors have collected all the estate’s assets, the estate’s debts can then be paid (i.e. any mortgages or secured loans, unsecured loans etc.) and any income tax reported to HMRC.
Once any outstanding debts of the estate have been paid, and income tax reported and paid, the remaining assets can be shared out among the beneficiaries of the estate, in accordance with the provisions of the deceased’s will.
It is important for the executors of a will to keep estate accounts, which are full records of the estate, to demonstrate that the estate has been administered properly by them. The executors should prepare a final set of accounts for the estate, to be given to the beneficiaries for their approval.
I have been asked to be an executor of someone’s will. However, it is likely that I am going to inherit something from that person on their death. Can I still act as an executor?
The short answer is yes. Quite often, individuals will appoint their spouse, children or other family members as executors.
Additionally, individuals creating wills may find it helpful to appoint professional executors. Whitehead Monckton are often appointed as executors, and we have a wealth of experience and expertise in acting as executors and/or providing advice and assistance to executors. We can also act as an executor alongside the deceased’s friends or family members who may also be appointed as co-executors.
How Whitehead Monckton can help with estate administration…
If you are appointed as an executor, you may not feel ready to deal with the complexities of administering the estate.
At Whitehead Monckton we have an experienced team who can help you with the paperwork and bureaucracy involved, guiding you through the decisions and actions needed. The service is personal to you – designed to offer as much support as you need – not a “one size fits all” approach.
If you wish to discuss in further detail any of the points set out within this article, please speak to a member of our team today
