If you have been appointed as an executor of a Will or are proposing to act as an administrator on intestacy, you may wonder if you should use a solicitor. Many people are able to deal with the process themselves but some do require specialist help. We have put together some issues you should consider if you are unsure whether you are able to take on the duty alone.
Duties and Responsibilities
Being an executor or administrator can involve a lot of work and responsibility, which may go on for months or even years. You should think carefully about whether you want to act as executor/administrator, or indeed whether you are able to.
Being an executor/administrator is a role for life – if any claims come up in the future, you will have to deal with them and you must carry out your duties correctly. It is essential to think carefully before accepting the role as it can be difficult to go back on your decision later, and you won’t be able to step down once you have started carrying out any actions.
Executors/Administrators need to:
• collect all assets and money;
• pay any outstanding taxes and debt; and
• distribute the estate according to the Will or intestacy rules.
Seems simple doesn’t it? However there are many issues to address before your duties are complete.
Events Prior to Death
Do you have information relating to the deceased’s financial affairs before their death? If not, you will need to investigate as some of this information might be needed for probate purposes. For instance, gifts made by the deceased within 7 years before their death.
Income Tax
Did the deceased complete self-assessment tax returns? If so, do you have the relevant information to complete the return to the date of death and pay the tax on time in order to avoid a penalty charge?
Where is the Will
Do you know where the Will is? You may need to undertake a thorough search for its whereabouts which will include contacting firms of solicitors so that they can check their records.
Damaged Will and Validity Issues
Would you know what to do if the Will was damaged in some way or questions were asked as to the validity of the Will? In order for the probate court to accept such a Will, affidavit evidence will have to be submitted detailing the circumstances leading up to the damage in order to prove validity.
Debts
There are simple precautions you can take, for example advertising in a local newspaper for creditors, so that you don’t find yourself personally liable to someone who turns up years later making a claim on the estate.
Insolvent Estate
Are you sure the estate is solvent? Many solvent estates later become insolvent estates when previously unknown creditors come to light. Would you know which debts are paid in priority to others?
Inheritance Tax/Capital Gains Tax/Income Tax
Is the value of the deceased’s estate over the nil rate band threshold? The values are currently £325,000 for a single person’s estate and £650,000 for a married couple. Estates valued at more than the nil rate band are required to submit up to 23 forms to HMRC. Do you have the time and knowledge to prepare the forms and calculate the inheritance tax due on the estate? Additionally Capital Gains tax must be paid on assets which make a gain during the administration of the estate and Income Tax must be paid on the income arising during the administration period.
Family Relationships
Do all the family members get along? If not, it can be invaluable to have an independent person to deal with the administration as this can prevent family arguments.
Executor/Administrator’s Liability
Did you know that if you act as Executor or Administrator you are personally liable for any mistakes or incorrect distributions? Appointing a solicitor can take the worry out of dealing with the administration.
Protection of Estate Funds
You will be responsible for dealing with estate funds and if things do go wrong you are personally liable. We are covered by professional indemnity insurance which means that all client monies are held in a protected client account.
If you are unsure whether or not to take on the role of executor/administrator and would like to discuss your options, please give our Head of Estate Planning, Jayne Parsons, a call on 0116 289 7000.