- Executors have a wide range of powers and responsibilities.
- They owe a duty of care to beneficiaries.
- Under limited circumstances, they may vary or withhold gifts.
An executor can only be appointed by a will (otherwise an ‘administrator’ is installed by the courts).
The responsibilities of the executor are quite wide-ranging, and the powers conferred on them commensurately so too. It’s recommended that someone trusted and willing is appointed to the role as the workload might be significant.
The chief tasks which the executor must complete are (non-exhaustively):
- Registration of death and attainment of Grant of Probate.
- Identification of those named in the will.
- Identification and securing of the deceased’s assets.
- The organisation of funeral.
- Notification of institutions such as HMRC, banks, mortgage providers etc.
- Valuation of the estate and associated accounting.
- Calculation and payment of inheritance taxes.
- Distribution of assets in line with the will.
- Locating creditors and settling debts.
Significant powers are required to carry out the above tasks. The wording of the will has material bearing on powers conferred on executors, however, those commonly seen include:
- Manage the deceased’s assets over the course of distribution to beneficiaries.
- Powers to access the deceased’s bank accounts and other financial documents.
- Power to calculate and settle debts.
- Powers to hold assets on trust for minors until they come of age.
- Power and responsibility for the application of capital to the maintenance of any for whom money is held on trust.
Two of the lesser-known powers that executors may exert are:
- The ability to change a will’s contents and
- The power to withhold gifts from a beneficiary.
Each of the above may only be applied in a very specific set of circumstances. With respect to ‘1’, a will may be varied only with the consent of beneficiaries. It is not vanishingly rare for this to take place and the most common reason for the variation in the management and reduction of tax payable e.g. inheritance tax.
The scenarios in which money might be withheld from beneficiaries are limited but include:
- Situations in which unspecified debtors come forward. In such cases, settlement of the will may be delayed by up to 6 months as this situation is resolved.
- Where there are safety concerns. In the case of a child, these are likely to be around parental issues, in which case settlement may be withheld until the child reaches 18. In the case of an adult, concerns over issues such as addiction or mental capacity may lead to a beneficiary’s gift passing into a trust established for their protection.
The above powers are significant but so is the potential liability of the executor. Probate may take 9-12 months to complete, during this time, executors owe a statutory duty (2000 Trustee Act) to carry out their duties with due skill and care. They are required to act in the best interests of the beneficiaries of the will and to not harm the estate in any way. Executors must keep detailed records of all transactions relating to their function and be prepared to produce them if challenged.
Crucially, the executor’s duty of care does not disappear once probate is complete, should a creditor, for example, challenge or bring a claim against the estate after it has been distributed, the executor may be found liable and be required to settle damages from their own resources.
If you wish to discuss any of the issues raised or to find out more, call Confidence Wills now on 0121 202 4714 or visit us at www.confidencewills.co.uk.