This leaflet outlines the issues you need to know if you are making a Will or if you have been appointed as an executor and now need to carry out your role.
What is an executor?
An executor is the person appointed by your Will to administer your estate when you die. An executor is also known as a "personal representative".
If your Will includes any on-going trusts, the executor will usually be the trustee of those trusts unless a different person is named in the Will.
Role and responsibilities
An executor is appointed in the Will but does not assume any responsibilities until you have died. The executor's role is then to identify the extent and value of your assets and liabilities, obtain a Grant of Probate, pay the estate's liabilities and correctly distribute the remainder of the estate to the beneficiaries according to the terms of the Will. This is known as administering the estate.
The executor has tax and accounting responsibilities to meet on behalf of the estate. He must prepare an inheritance tax account and an annual Trust and Estate Tax Return to report any income and capital gains made during the administration period, and arrange payment of any tax due. He will usually prepare a set of estate accounts at the conclusion of the administration.
If there is an on-going trust in the Will, the executor's role does not end once the estate has been fully distributed. If he is willing to act, he must manage the trust assets until the trust is wound up, or he retires.
Liability of executors
An executor has a duty of care when administering the estate or managing any on-going trusts. This is broadly to exercise such care and skill as is reasonable in the circumstances. If it is successfully claimed that he has breached this duty, he will be personally liable for any loss that results and must pay compensation from his own funds.
How many executors can be appointed?
You can name as many executors as you like but only four can apply for the Grant of Probate. We recommend that you name at least two executors and usually no more than four.
Choosing an executor
When choosing an executor, the following factors should be borne in mind:-
- Capacity:An executor must not be a minor or lack mental capacity. It is advisable to appoint someone who is in good health.
- Capability:The role and responsibilities of an executor can be onerous and there is a personal cost if things go wrong (see "liability of executors" above). The person chosen should have time to carry out the role and be capable and willing to do so.
- Knowledge:The Will often gives executors an element of discretion in managing and distributing the estate, so it is important to involve someone who knows your general philosophy and wishes.
- Residence:It is usually sensible to appoint someone who lives in the UK in order to avoid complications and delays in having paperwork signed.
- Teamwork:Executors must make decisions together and agree unanimously on the action to be taken. It is important to choose people who will work well together.
- Resilience:Occasionally the provisions of a Will can provoke family disputes. An executor must be resolute, act impartially and be capable of making and delivering a difficult decision.
It does not matter if your chosen executor is also a beneficiary of your Will. It is usual to appoint a spouse or civil partner as executor. Other categories to consider are close family members or trusted friends, or a professional executor. Family/ friends should know you well. They cannot charge fees for their services but they often engage a professional to act on their behalf and assist them with their responsibilities. You can also appoint a professional executor. A professional executor will charge fees but has the advantage of allowing any other lay executor(s) to "step back", assume an overseeing role and allow the professional to deal with any difficult issues that may arise during the course of the administration.
If there is likely to be a conflict over your Will, we would always advise that you appoint a professional executor. A partner at Wedlake Bell can act as a professional executor if you wish.
Can an executor refuse to act?
Yes. If, following your death, an executor does not wish to act, he can formally renounce his role with the Probate Registry provided he has not yet intermeddled in the estate. If the executor does not want to act but would like to remain involved, he can apply to the Probate Registry to have power "reserved" to him. This will allow him to revive his right to apply for the Grant of Probate at a later date.
Can we help?
We can advise you on making a Will, including the appointment of your executors, and guide you in making what can be a difficult choice. If you have been appointed an executor or trustee and need assistance with carrying out your responsibilities, we are happy to help, from providing advice on specific issues to carrying out the administration of the estate or trust on your behalf.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
