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12 April 2019

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What are an Executor’s Duties to Beneficiaries?

Posted by: Chris Burrows

One of the most common elements of Probate that causes confusion is the role and duties of the executor of a will.

Probate is a stressful time for everyone, but with the distribution of an estate often taking six to nine months (or longer) to complete, friction can develop between executors and beneficiaries.

For this reason, it is important for everyone involved to understand exactly what an executor does. In this article, we’ll look at the Probate process in more detail, as well as set out the duties an executor should undertake.

Before we explore this further, though, it’s important to note details of the role of an executor can differ from estate to estate, so always seek legal advice specific to your situation.

What is an Executor?

person-in-suit-behind-desk

If you’ve been named the executor of a will, you may be wondering exactly what that means.

An executor is a type of personal representative tasked with managing and distributing a deceased person’s estate to the beneficiaries, as laid out in their will.

As such, the executor has the legal authority and responsibility to administer the estate. This is important, as it means an executor may also be held liable for any mistakes.

In order to become an executor, you must have been named as such in the deceased person’s will and you may not be alone. Up to four executors may be named to manage an estate.

Unlike executors, beneficiaries do not play a role in the distribution of an estate (unless they have also been named as an executor). Instead, beneficiaries are simply the parties named in the will as receiving a portion of the estate.

So, now we understand what an executor is, what are their duties?

1. Collecting Documentation

collecting-documentation

If you’re aware of your duty as an executor before the deceased’s will is found, one of the first steps you’ll want to take is the collection of a number of documents.

Chief amongst these is the deceased person’s will, which lays out how their estate should be divided and confirms who should act as the executor(s).

You might have already been told where the will is kept, but in the event that you’re unsure, you should check their house or ask their solicitor. In the event there is more than one will, the latest one is considered valid – provided it has been signed correctly and the person understood what they were doing when they made it, though earlier versions should not be destroyed.

While it is not strictly an executor responsibility, you may also find that you need to register the death, notify their GP or nearest doctor and organise the funeral, as per the wishes described in the will. At the very least the executor needs to obtain copies of the Death Certificate. Funeral expenses are payable out of the estate so the executors should approve the costs if possible.

2. Valuing the Estate

valuing-estates

Before you can apply for a Grant of Probate, you’ll need a better idea of the value of the deceased person’s estate. An estate is simply a collective term for the money, property and possessions belonging to the deceased.

In order to do this, you’ll need to put together a conclusive list of assets to be valued. This can be difficult if the will is unclear or there is little documentation demonstrating ownership.

For larger estates, the valuation process can take many months. However, it is not something that needs to be done immediately, as there is no fixed deadline unless the estate owes Inheritance Tax.

In the event that an estate owes Inheritance Tax, you’ll need to send Inheritance tax forms within a year and begin paying tax by the end of the sixth month after the person died. However, you can make payments before the valuation is complete.

As of February 2019, the threshold for paying Inheritance Tax is £325,000.

In any case, for high-value items such as property, you’ll want to organise professional valuations. HMRC recommends these valuations for anything you expect to be over £500. Estimated valuations may be appropriate if the estate is straightforward.

Once you’ve identified the assets, you’ll need to contact organisations such as banks and utility companies to confirm whether any assets or debts are held with them and the value.

Once you have a clear idea of the estate’s value, you need to report it to HM Revenue and Customs (HMRC).

Valuing an estate is probably the most time consuming and stressful elements of the Probate process, so we always recommend that you seek legal advice and support as there can be penalties if you give incorrect information to HMRC or the Court.

3. Applying for a Grant of Probate

making-an-application

In order to gain legal authority over the deceased person’s property and distribute it to beneficiaries, you’ll need to apply for a Grant of Probate.

In order to do this, you’ll need to have completed three steps:

  • Obtained the original will
  • Obtained the original Death Certificate
  • Reported the estate’s value to HMRC

If you prefer not to apply for Probate yourself, you can use a solicitor to do so on your behalf.

4. Managing Finances

calculating-finances

Once Probate has been granted you’ll be able to take control of the deceased person’s finances.

Send a copy of your Grant of Probate to organisations that are holding assets, such as their bank, and request that funds are moved to an agreed executor account. This could be the executor’s account or a specific account set up for dealing with the estate.

If there are multiple executors, you may find that each of you needs to be present to withdraw funds, so it is always worth checking with each asset holder.

Now you have access to the finances, pay any outstanding debts or tax that is owed. It is also worth placing an advert in local media and The Gazette to give creditors two months’ notice to make any claims.

By doing this you, as the executor, pass on personal liability for any other debts to the beneficiaries.

5. Distributing the Estate

handing-over-keys

You’ve come to the final step of the Probate process: distributing the estate.

It goes without saying that distributing the estate should be done to the exact letter of the will. This comes down to the simple fact that the will constitutes a legal document.

So, despite the desires of the beneficiaries, ensure you do not distribute elements of the estate to the wrong people, even if they are worth the same monetary value.

In the event that a beneficiary does not come forward, the executor should take steps to track them down and execute the will as written.

As part of the distribution, you should also maintain the estate accounts, as these will have to be approved and signed by the beneficiaries.

Conclusion

If you’ve read this guide to Probate and being an executor and started to feel trepidatious then don’t worry, you’re not alone!

Probate is a stressful time for everyone, which is why many executors choose to bring in independent, expert advice and support.

If you’re struggling through the Probate process, get in touch with our expert team to learn how Glaisyers can help.

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Chris is a Senior Solicitor and is head of the firm's Private Client department.

Chris Burrows - Head of Private Client

To discuss how Glaisyers can assist you contact Chris Burrows on cmb@glaisyers.com or via 0161 832 4666.

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