What is an executor and what are their duties?

What is an executor of a will?

An executor is the person (or persons) with responsibility for dealing with the administration of your estate. The executor is named in your will and their role is to ensure that the estate is administered and distributed according to the terms of the will Executors are alternatively known as administrators if there is no will.

Who can be an executor of a will?

Your executors should be people who you trust completely to handle your assets following your death and enforce the wishes set out in your will. An executor can be a beneficiary of the estate and it is common to appoint your closest family members, such as your spouse or children, but this may not always be appropriate.

Depending on the circumstances, it may be sensible to appoint ‘independent’ executors, such as a friend, relative, or professional who are not due to benefit from the estate. 

How many executors can you have?

Your will should name at least one executor, but it is common to appoint at least two persons to act as executors. Where the executors are also appointed to act as trustees, there must be a minimum of two. 

Theoretically you can appoint as many executors as you wish. However, a maximum of four executors can act at any one time and practically a higher number of executors may create an additional administrative burden. 

It is possible to appoint replacement executors in the event that the ‘first choice’ executors have died or are unable to carry out their duties for whatever reason.

What if you don't have anyone to be an executor?

It is possible to appoint a professional executor, such as a solicitor or accountant. This may be appropriate if there are no suitable relatives or friends, or if you would prefer them not to carry the burden of various duties and responsibilities that come with being an executor. Appointing a professional executor may be sensible if your assets are more complicated, for example if you have business interests or shares which may require management after your death.

Pros of appointing a Professional executor:

• Peace of mind your estate will be dealt with
• Suitable for complex estates if the executors have limited knowledge
• Support on any legal issues and tax responsibilities
• Expert guidance 

Cons of appointing a Professional executor:

• Professional charges (although these are borne by your estate)
• May lack personal knowledge of your affairs or an in-depth understanding of family dynamics.

Duties of an executor

Acting as an Executor can be an onerous task involving many demanding responsibilities which can take up a lot of time. Executors can face personal liability if administrative, legal or tax matters are not dealt with correctly.

One of the first steps an executor should take is to ensure that the estate’s property and assets are safe and secured. The executors owe a responsibility to the beneficiaries of the estate for the safeguarding of the estate assets.

This includes taking responsibility for the keys of any property, collecting the wallet or credit/debit cards, and ensuring that the property and contents are secure. The executors must also ensure that adequate insurance cover is in place, particularly where a property is left unoccupied.

Executors will often have responsibility for arranging the funeral, taking into account any wishes the deceased may have left, and for registering the death with the local registry office.

Executors must ascertain the value of all assets and liabilities in the estate by making thorough enquiries and obtaining professional valuations where necessary. It is the executor’s duty to correctly report the estate to HMRC, pay any inheritance tax and to apply for the grant of probate. Personal liability can be incurred by an executor who fails to fulfil their duties, or incorrectly reports the tax position of the estate.

Once the grant of probate has been obtained, the executors must deal with gathering and collecting the assets of the estate. This might include closing bank accounts, selling properties, and selling or transferring investments. Estate monies should be separated from the executor’s own funds, for example in a specific executors’ bank account. The executor must also ensure that all debts of the estate are paid from estate funds. Ultimately, the executor must ensure the estate is distributed in accordance with the terms of the will and provide a full account to the beneficiaries.

Executors often have further reporting requirements throughout the course of administering an estate. For example, there may be an obligation to report to HMRC income tax or capital gains tax payable by the estate.

What is a ‘lay’ Executor vs a ‘professional’ Executor?

A ‘lay’ Executor is an individual who is appointed as an Executor who is not acting in any kind of professional capacity. Lay Executors tend to be family members or friends of the deceased and may also be one of the beneficiaries named in the Will. A lay Executor does not have to deal with the administration of an Estate themselves without seeking any assistance. A lay Executor could instruct a professional, such as a solicitor, to assist them with the administration of the estate they are responsible for. The professional’s fees would be administration expenses which are payable from the estate. A lay Executor can choose which aspects of the estate administration they require assistance with, and which matters they will deal with themselves.

A ‘professional’ Executor is a person (or trust corporation) who is appointed as an Executor in a professional capacity. Professional Executors are often solicitors or accountants but may also be trust corporations or banks. Professional Executors have specialist knowledge, experience and skills relevant to the administration of estates. Professional Executors will usually charge for their services.

Conclusion

The role of an executor is an important one and involves a number of duties when dealing with an estate. An executor acts in a ‘fiduciary’ capacity and can incur personal liability if things go wrong. Whilst these duties may seem daunting, our team of specialists can assist with every step of the process, giving executors peace of mind that they have fulfilled their legal responsibilities.

Why choose a professional Executor?

When you are thinking about who to appoint as your Executor, it is worth considering the nature of your estate, your personal/family circumstances and those of your beneficiaries, as well as the terms of your Will. It may be worth considering whether appointing a professional Executor would be appropriate if any of the following applies:

1.     If the estate is high value or involves lots of different assets;

2.     If the estate is particularly complex, either due to the type of assets or due to the terms of the Will;

3.     If you anticipate that there may be disagreements between your chosen beneficiaries such that it would be preferable to have an independent person administering and making decisions about the estate;

4.     If there are minor beneficiaries; or

5.     If there are no beneficiaries, family, or friends who you would consider suitable to act as Executors, either due to their age or their unfamiliarity with financial or administrative matters.

Overall, the key benefit of appointing a professional Executor is the peace of mind that a person or trust corporation with the necessary skills, expertise and experience will deal with your estate after your death, which can reduce the burden on your loved ones.