Often people appoint a friend or family member as an executor in their will to manage their estate, sell assets and pay the debts and tax and to distribute legacies to beneficiaries. It feels like an honour to be asked to fulfil the role of executor (assuming you are asked as it is not that uncommon for people to only find out that they are one of the executors of a friends or loved one’s estate after the deceased has passed away!) but executors can quickly realise how onerous the ‘’honour’’ is.
Sometimes, because executors have been personally appointed by the deceased to act as the executor, they feel that they have to ‘’go it alone’’, not realising just how time consuming a task acting as an executor can be or how difficult it is to resist pressure from friends and family to sort out the estate quickly. For executors who feel under pressure or all at sea with what to do with the paperwork, the admin and form filling and handling of queries and demands from beneficiaries, there is help is at hand in the form of instructing a professional specialist solicitor to deal with the estate. Acting with the executors the solicitor will guide everyone through what can be a very upsetting and daunting process.
The benefits of an executor getting professional legal help in sorting out an estate is highlighted by the recently reported case of Glyne Harris. He has hit the headlines as he has been ordered to pay about £341,000 in inheritance tax as a result of his personal and legal obligations as the personal representative of Helena McDonald’s estate.
How on earth could this liability have been made against Mr Harris? A good question and one I am sure Mr Harris wishes he had asked earlier. Mr Harris paid the majority of the deceased’s estate to a beneficiary on the understanding that the beneficiary would be responsible for payment of the inheritance tax from his legacy. The beneficiary disappeared leaving HMRC pursuing Mr Harris for the £341,000 and with nothing in the estate to pay the tax man. The Court has ruled that Mr Harris is responsible for the inheritance tax bill. That is because a personal representative of a person who dies without a will or the executor of a will is personally liable for paying any income , capital gains tax or inheritance tax due, even if they haven’t received a penny from the estate.
What are the top tips if you find that you are asked to be an executor of a friend’s or loved one’s will?
- If you are asked to be an executor of a will it is a voluntary role. You can decline the honour. It is important to ask who the other executor/s will be. If the other executor is a named professional in a law firm you may feel far more relaxed about your appointment. On the other hand if the other proposed executor is a family member that you know that you will struggle to work with it may be best to tactfully decline the appointment
- If you are appointed as an executor without first being asked to act , or if your circumstances have changed after the will was drawn up or for any other reason you can decline to act as executor and renounce the role
- If you want to act as an executor you have the option of appointing a solicitor to handle everything and administer the estate. The solicitor’s fees are met out of the estate. The appointment of a solicitor not only reduces your executor workload but also means that if a mistake is made ( such as paying out the estate to the beneficiaries before the tax is paid ) you can potentially pursue a claim against the solicitor under his insurance
- If you are the executor of a will it should ideally have been drawn up professionally. Why? If the will isn’t drawn up by a specialist solicitor it can be ambiguous .That in turn can lead to more complexities and time in sorting out the estate and ultimately to more legal expense in resolving the mistakes in the will
- As well as being personally liable for paying the tax man the executor is also liable to make sure all debts are paid and that the right beneficiaries are given the correct legacy. This can be a minefield if the will is ambiguous or there are a large number of beneficiaries or someone makes a claim against the estate alleging that the deceased didn’t make reasonable financial provision for them in the will. If the executor appoints a solicitor to handle the estate those worries are taken away from the executor.
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Well firstly don’t panic. The case of Mr Harris is very rare. What isn’t so unusual is the stress that executors find themselves under trying to do a good turn and handle an estate without the time or legal know how. Solicitors can be very user friendly and the cost of a solicitor taking the worry and stress of sorting out the estate administration and paperwork following a friend or loved one’s death can be the best option, you are still the executor but have a professional to share the burden with you.
For legal help with executors, wills or probate please contact us.