The Hidden Dangers of being an Executor
People who take on the role of an executor of either a friend or family member’s estate are in most cases unaware of the damage that such an act could have on their own wealth.The Roles of an Executor of Estate – Mom Blog Society
The Executor must
- Ensure that the wishes detailed in the deceased’s Will are complied with.
- Research and record all assets and liabilities of the Estate.
- Obtain valuations of the assets at the time of death whether solely or jointly owned. This includes shares, motor vehicles, second properties and any business interests.
- Ensure that the appropriate insurance policies are in force and will not expire before the estate is finalised, this also includes property and vehicle insurance.
- Complete all necessary tax returns for Inheritance Tax, Capital Gains Tax, Income Tax and Stamp Duty Land Tax.
- Complete and submit an application for the Grant of Probate. This will require a personal interview at the Probate Office.
- Seek confirmation from the tax office that the estate can be distributed.
- Pay all outstanding debts of the estate.
- Prepare final accounts for the beneficiaries and distribute the Estate.
- If any additional assets or liabilities are discovered after the Estate has been distributed the executors must deal with these even though it may be many years later.
- Notify DVLA
If the executor fails in any of the above duties, they could face a claim from any of the beneficiaries of the estate, HM Revenue and Customs, Credit card companies or any disgruntled person to which the estate owed money. This liability could incur many years after the estate has been finalised.
There are Insurance schemes designed to protect the nominated executors who have the responsibility of administrating the estate of the deceased. The Insurance premiums can normally be deducted from the estate and therefore will be at no cost to the executors.
A typical estate can take between 6-9 months to administer, although some complex estates can take longer, especially if they involve property here or overseas, stocks, shares or business ownership.
We automatically provide cover for 18 months and if further extensions are required this can be arranged.
We are seeing increased litigation in this sector and an executor needs to be aware that by carrying out a voluntary act, it can have a material effect on their own personal wealth; if a beneficiary suffers a loss of expected income.Executors are risking their own money from what is normally a voluntary act
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