An Executor has to carry out certain tasks and duties in order to legally fulfil the obligations of the task. As an Executor you should therefore:
- Obtain a copy of the medical certificate indicating cause of death and a formal notice from the Doctor if the family members do not wish to do so.
- Register the death at the Local Registry of Births, Deaths and Marriages if there are no family members wishing to do so. The death must be registered in order to obtain the Death Certificate. NB. it is advisable to get more than one copy as it will be needed when dealing with Insurance Companies, Pension Providers etc.
- Ensure any last wishes such as organ or body donations are carried out. The job might also include planning for the Funeral or Cremation and arranging for payments for the services provided.
- Make sure you have the last original Will of the Deceased, the Testator should have notified you as to the location of this.
- Locate all the beneficiaries. This might seem like an easy task, particularly if there are just a couple of children and they are the only names named in the Will. However, if there are numerous beneficiaries and they are named in the Will either collectively or individually the Executor must locate each and every one.
- Make an exhaustive list of all the assets of the estate including: personal property, real estate, bank accounts and investments as well as all the debts including mortgages, credit cards, utility bills and loans.
- Open separate estate account into which money collected in can be credited. This will prevent estate monies being confused with personal finances - many executors don't do this and find themselves personally liable.
- Notify all businesses of the death e.g. Utility Companies, Credit Card companies, Banks, Council Tax Offices, Social Security, Insurance companies etc.
- Ensure the appropriate public advertisements are placed enabling potential beneficiaries and creditors to note their interest in the estate.
- Make sure that all the Deceased's debts are settled before the estate is distributed to the Beneficiaries
- If there are minor or dependent children the Executor could be responsible for arranging their care and placement. The Deceased might have their wishes stated in the Will but if not, the Courts might need to be involved in the placement.
- If there are pets, the Executor will need to care for them and make arrangements for their continued care.
- Calculate and declare the value of the estate to HMRC on an Inheritance Tax return within 12 months of death.
- Pay any Inheritance Tax necessary to HMRC.
- Pay the Deceased's other taxes including Income Tax and Capital Gains. This is your personal responsibility. Failure to submit an accurate account to HMRC may leave you open to personal liability or penalties.
- Complete the relevant forms and submit them to the Local Probate Registry to obtain the Grant of Probate.
- Distribute the contents of the Will making sure that any assets left to minors is given to a named Trustee to hold until of age.
- After you have completed all of your tasks you need to produce a full set of accounts for the Beneficiaries showing the estate assets and liabilities, administration, income and expenses and how the estate has been distributed.
If your appointed executor assumes the role they are personally liable for the role they perform. There are many risks associated with performing the role however the three most perilous areas are:
1. Not correctly valuing and declaring asset values to HMRC and consequently underpaying the appropriate inheritance tax
2. Not advertising the death appropriately thereby not enabling creditors and potential beneficiaries to note their interest in the estate. For example, if the deceased has a debt of £50K to a financial institution that the executor is not aware of, how is the executor able to prove they provided the appropriate public notice thereby enabling the bank to stake their claim.
3. Where class gifts have been noted "e.g. my children", not performing appropriate due diligence to trace all potential children. We have all heard the standard response to the question "How many children do you have"? i.e. "Two that I know of".
For these reasons it is no surprise that in this "where's there's a blame there's a claim" climate we find ourselves in, most defer to a professional to fulfil the role.
There are two options:
1. Appoint a lay-executor who acts alone and understands and accepts their responsibilities and the risks involved.
or;
2. Appoint a professional to conduct all or part of the work on their behalf.
Most professionals will charge a percentage of your estate, this can vary widely but typically ranges between 1.5% to 5% of the value of the estate (subject to a minimum fee) for the work that they do.
Pattison James Associates prefer to adopt the Fixed-fee approach ensuring that your family are aware of the total cost at outset.
We also appreciate that some executors want to have heavy involvement whereas others want to have very little involvement but the common denominator between all lay-executors is they want to ensure that the work is carried out correctly.
To appeal to all, we have put together four options for bereaved families to choose from ranging from us having no involvement and simply providing them the guidance on the steps they need to follow through to full estate administration for those that would prefer not to bear any personal liability.
Therefore, our clients commonly choose to appoint us as executors, either solely or in conjunction with a family member / close friend.
