Executors

Yeah but no but yeah but...

The executor carries out the terms of the will - but must do so in a manner that achieves the maximum benefit from the estate. Executors have responsibilities toward the beneficiaries as well as to the testator.

The executor can be, and usually is, a beneficiary of the will - a spouse, civil partner, other relative (son, daughter, nephew, niece, etc) or friend. To be an executor, a son or daughter must be at least 18 years old.

A solicitor, bank or other professional can act as executor, but they charge a fee - and it can be stiff. In many instances, the fee is worth it: experienced solicitors and other professionals can get the work done quickly and accurately and legally. They are also not emotionally involved and hence avoid squabbles that can occur between executors who were friends or relatives of the deceased or of one another.

Testators are under no obligation to appoint executors, and many people make perfectly valid wills without naming any executors.

Typically, two executors are named in wills - either to help each other, or to increase the chances of having at least one executor should the other decline the role. You can name as many as four executors.

Being named as an executor in a will does not oblige the person to accept the role. A person can even agree in advance to be an executor and then decline when the testator dies.

There are good reasons to refuse to act as an executor: sorting out personal possessions, bank accounts, debts and the like can take a lot of time and effort. Executors also run financial and legal risks, although executors can protect themselves with insurance.

For the testator, the burden is to select an executor who will actually keep his word about accepting the role, and also be intellectually and emotionally up to the job, which can be a grind.

WWP Tip Testators should consider including clauses in the will for the executors' benefit; for example, offering to pay for solicitor fees or indemnity insurance. Non-professional executors can not charge for their time, but testators generally provide for them in the will, awarding them a cash amount, a case of whiskey or other gift or compensation.

 

If...

If you do not appoint an executor...

If you do not make a will (die intestate)...

Someone will have to carry out the terms of your will, and that person will be a court-appointed administrator. An administrator will also have to be appointed if you die intestate.

Executors and administrators are similar but not identical, and the differences are important.

An executor assumes authority, and can begin work, from the moment of death - organising the funeral, for example, and protecting the testator's assets.

The administrator can not begin administering the estate until he or she is appointed, and that takes time - during which family disputes can occur, and possessions disappear.

Executors are selected by the testator, whereas administrators are appointed by the probate service.

Professional Executors - Yes, No, Something in between

Testators can appoint a solicitor, bank or other professional as the executor. These professionals charge a fee for this service - usually a flat fee or a percentage of the estate.

The size of the estate is not necessarily linked to the amount of work an executor is likely to face. A millionaire with relatively simple and straightforward financial affairs who leaves everything to his or her only child, for example, may have an estate that is easy to wind up. A percentage arrangement can mean that the executor enjoys a nice pay day for relatively little work. A bank charging four or five per cent on a million-pound estate can earn £4,000 or £5,000 simply for writing a few letters.

Hiring a professional need not be an either-or yes-no-choice.

A friend or relative - that is, a non-professional executor - can deal with the initial or easy parts of probate and hire a solicitor, accountant or other professional as and when needed to sort out a specific aspect of the estate. Their fee for a specific task should be considerably less than their fee if they were to oversee the entire process.

Making life easier for executors

Executors will incur at least some expenses - travel, postage and the like. The estate will reimburse them.

The estate can also pay for the executor to consult a solicitor or purchase indemnity insurance. Executors can be held responsible for the actions of others, including unscrupulous behaviour by a co-executor.

The executors' bible is Probate Office form PA2 - a mercifully short (seven pages) and clearly written brochure outlining the main executor responsibilities. Print versions are available from probate offices, and it can be read on, and downloaded from, the internet.

PA2's title is: How to obtain probate - A guide for people acting without a solicitor. It is one of 14 forms and leaflets published by the Probate Office, all of which are listed in PA2 as well as a few Revenue and Customs brochures regarding inheritance tax. Forms from both organisations are listed here.

On the other hand

Large estates - and estates with large debts - may require a professional executor. The workload can be punishing, and with an estate in or near bankruptcy, there may not be enough funds to compensate an amateur executor.

Only a decade or so ago, most ordinary people had small or modest estates - some cash in the bank, some stocks and shares, a few pieces of jewellery. Such estates were, and still are, relatively easy to administer.

Nowadays, our much richer society has yielded more complicated estates, with many people

• owning second-homes or buy-to-let properties
• running a business
• in debt (credit cards, bank loans, overdrafts, and the like)
• owning a property or other assets in a foreign country
• having family members or beneficiaries living abroad
• possessing estates valued above the inheritance tax threshold

Does a property have to be sold to pay the IHT tax? Are there children under 18 for whom trusts will have to be organised? Matters such as these may require a professional executor either to handle the entire estate, or - the cheaper option - to consult on specific aspects.

I am an executor - now what?

Some issues may need to be dealt with immediately: Is the cat being fed and looked after? Is the house, with its furnishings and possessions, secure? The executor may also have to organise the funeral.

The major task is to distribute the assets of the deceased, and the executor obtains the right to represent the deceased - in effect, to obtain the assets - by applying for a Grant of Representation. This is done through probate.

To obtain the Grant, you apply to the probate office by submitting an application (PA1) with relevant documents - the will, death certificate and other documents, including notes left with the will, possibly also a Lasting Power of Attorney. Form PA1 is downloadable on the internet.

Probate may involve a personal interview and the swearing of an oath.

What if an executor lives far from the probate office or needs more time?

Probate allows for certain delays and other ifs and buts. The PA2 brochure provides a good overview of routine and not-so-routine procedures. PA2 also gives some practical tips. For example, if the will can not be located in the testator's home, other likely hiding places are solicitors, banks and the Principal Probate Registry in London.

Executor responsibilities

The executor's responsibilities include some or all of the following:

• find the will
• organise the funeral
• deal with a co-executor
• apply for probate
• determine, then distribute the value of the estate
• protect a property
• trace beneficiaries
• deal with banks, solicitors, trustees, utilities and so forth

Executor v Executor - "Double Probate"

Executors can disagree on the timing to prove a will. Such situations are legally and financially complicated. If the reluctant executor wants to wait a while and become executor later, HM Revenue and Customs can make a grant of double probate.