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Thursday, March 24, 2016

What are your responsibilities as an executor of a will?

Will executorship
Next-of-kin are not necessarily executors of a will
By Peter Collins

Arranging a will is a very smart thing to do at any age as it clearly outlines what your wishes are should the worst happen to you. However, it isn’t as straight forward as simply writing down your wishes and having a witness sign the document.

The successful implementation of a will requires someone to carry out your wishes. People usually assume that this falls to the next-of-kin of the deceased, but this isn’t always the case. People can appoint an executor, often a relative or a close friend that can be trusted.

If you have been asked to become an executor of someone’s will, you need to be fully aware of what will be required should you be called upon, and know exactly how much is being asked of you.

What does an executor have to do?

There are a lot of legal requirements that an executor must perform. They’re all part of the legal paperwork of a will and they cannot be ignored.

An executor must correspond with other parties named in the will to ensure they are aware of what they will receive, along with how and when. They must also keep records of who was contacted when, fill out the relevant forms and also be answerable to creditors should that become an issue.
Executors must also take an inventory of all of the deceased’s possessions and their debts, notify all the relevant organisations and make sure they have gathered all assets and documents relating to them. They must also note missing assets and ensure they are located and accounted for.

After this, all bills, debts and charges need to be collected and paid off. Even after this, there is still work to be done by the executor. They must take charge of handling the distribution of the legacies, which covers everything from specific items through to cash sums. This also includes overseeing the sale of any property, if this is required to split the inheritance or to cover costs.

What else does an executor have to do?

On top of all the work listed above, an executor must also apply for a grant of probate in order to prove that they have the correct authority to deal with the deceased’s assets.

There are also a lot of tax implications and, yet again, these are the responsibility of the executor. Inheritance tax returns, paying the inheritance tax due, completing income and capital gains returns and paying any of the deceased’s outstanding tax all fall to the executor.

Does it cost the executor money to do all of this?

In theory, no. All of the costs that occur in getting the probate, sorting solicitor’s fees, getting valuations on items or properties etc should all be covered by the deceased estate. However, it is a very big responsibility, so you must be sure of what you are doing before signing any paperwork. Get advice from charities such as Age UK, and if you’re really not comfortable, advise your friend or relative to enlist a professional executor to avoid any issues.
About the author: Peter Collins is a director at LFC Risk and Insurance, an Essex company that provides business and individuals with bespoke insurance and risk management solutions.
Image: Ken Mayer/Flikr "Last Will and Testament";  CC BY 2.0