If you have been named an executor in someone’s will then you will be responsible for handling that person’s affairs when they pass away. As an executor you are required to carry out the instructions in their will and take care of all the legal and financial affairs that need to be handled after their death.
When you deal with a person’s affairs after they die, it means dealing with all their assets, paying debts, paying any inheritance tax and income tax and transferring any inheritance to the beneficiaries. The process of dealing with the affairs of someone who has died is estate administration.
How do you know if you are an executor?
When someone prepares their own will, they will usually inform their executor(s) that they have chosen them, however there is no legal requirements to inform the executor(s). Many people are aware that they will be an executor of a will in advance but there is a chance that you could find out after someone has died.
If you know that you are an executor on a will then you should familiarise yourself with the assets and intentions of the person while they are alive.
What the role entails
You are financially and legally responsible for administering the estate of the person who has died so the role shouldn’t be taken lightly. It also means that you can be held accountable for any mistakes, such as distributing the inheritance incorrectly or paying the wrong amount of inheritance tax.
The role of an executor is unpaid but you may be able to claim for reasonably incurred expenses and this should be paid from the estate before distributing any funds to the beneficiaries.
Up to four people can be named as an executor on a will so you might not be alone. It is always advisable to name at least two executors in a will as one may be unable to act when the time comes. If there are more than one of you then you can share the responsibility and handle the estate administration together.
If an executor is unable or unwilling to accept the role, they can renounce. Likewise, you have the right to instruct professionals to help such as a professional estate administration provider who can take care of everything and the fees for this help can be paid from the estate.
Responsibilities of an executor
- Maximise the value of the estate for the beneficiaries.
- Distribute the estate correctly and make sure all the beneficiaries receive their rightful inheritance.
- Ensure all assets and debts of the deceased are identified and dealt with. Debts must be settled before distributing an inheritance to beneficiaries.
- Applying for the grant of probate, if required.
- Paying any inheritance tax due on the estate within the appropriate timeframes. If there are any errors on the inheritance tax return, the executor(s) are personally liable and may face a fine for errors or late submission.
- Ensuring that the income tax position of the deceased is finalised, up to the date of death and for the period after death until payments are made to the beneficiaries.
Reading the above responsibilities highlights that estate administration can be complex so you should consider the risks and responsibilities before accepting the role. You are not obliged to take on the responsibility and can renounce the role if you wish.
*Please note: The Financial Conduct Authority does not regulate estate planning, tax advice and wills.