What does an Executor of a legal Will do?

Dealing with someone’s affairs when they die can be a very confusing and distressing time. There are procedures that need to be followed in order for an Estate to be administered and wound up. An Executor is the person (or persons) named in legal Wills to carry out the wishes of a deceased person. An Executor’s duties will vary depending on the size of the estate and the type of assets involved. Please note that this is only a guide and can only deal with some of the issues that will arise when dealing with last will and testaments.

Registering the Death

The first task will probably be to register the death and obtain a Death Certificate. This should be done at the nearest Registrar of Births, Deaths and Marriages. It is a good idea to get one or two extra copies of the Death Certificate, as these will be useful during the administration of the estate.

Funeral

The deceased may have left instructions for organ donation and funeral wishes either in their Will or in a separate guidance note to their Executor. Funerals can be expensive so you should check that there are sufficient funds available for the cost to be met from the estate. The deceased’s Bank and Building Society accounts will be frozen at death but they will usually pay out small sums to meet the funeral costs on production of a Death Certificate and the original funeral account.

If a Solicitor is dealing with the administration of the estate the funeral account should be passed to him for payment from the estate. The deceased may have already paid for his funeral under a pre-paid funeral plan. It should always be checked to see if there is evidence of such a plan amongst the deceased’s papers.

Wills and probate

Enquires should be made of the deceased’s family and their Solicitor to ensure that the Will is in fact the last Will and Testament made (together with any codicils). It is a good idea to take a few copies of the last Will. It is very important to make sure that nothing is attached to the original Will, even a paperclip, as this may create difficulties later on. A decision will now have to be made as to whether or not it is desirable to obtain a Grant of Probate of the Will. This is the official proof that as the Executor you have authority to deal with the estate. A legal advisor will need to advise you about this.

Assets and Liabilities

As Executor, you will need to ascertain the total value of the deceased’s estate as at the date of death taking into account any liabilities. The valuation must accurately reflect the value of the assets on the open market at the date of death and must also include the value of any lifetime gifts given away up to seven years prior to the death. The assets may include, for example:

• All property including antiques, jewellery and works of art.
• Bank, building society and savings accounts or certificates.
• Stocks and shares.
• Insurance policies.

It may be necessary to obtain professional valuations of some assets, for example the deceased’s house and contents. All relevant authorities should be notified as soon as possible of the deceased’s death including the DSS, their Tax Office, Bank, Building Society, former employer if they received an occupational pension, National Savings if they held Premium Bonds or other savings and Company Registrar if they held shares. It is advisable to advertise for creditors of the estate by placing Statutory Advertisements in both the London Gazette and a local newspaper.

Inheritance Tax

Depending on the size of the estate you may need to complete forms for the Inland Revenue for Inheritance Tax purposes and perhaps pay Inheritance Tax. In some cases the forms need to be completed even where there is no Inheritance Tax to pay. The current Inheritance Tax threshold is £325,000.

If Inheritance Tax is payable, this must be done before a Grant of Probate can be issued. This will often mean that it is necessary to arrange to borrow funds until they can be released from the estate. A good starting point is to contact the deceased’s bank about a loan. It is then the Executor’s responsibility to raise sufficient funds to pay the Inheritance Tax due within six months from the date of death.

It may be possible to reduce or even eliminate Inheritance Tax on an existing legal Will through a Deed of Variation, which would not restrict access to the money. One of our professional advisors could arrange this for you; providing the Deed of Variation was completed within two years of the date of death.

Income and Capital Gains Tax

The deceased’s own Tax Office should be contacted to arrange for a Tax Return from the last 6th April to the date of death to be completed so that any outstanding tax can be paid or a refund claimed. The Executor may also be required to complete Income Tax Returns during the administration period.

Accounts

The Executor will need to keep a full record of all dealings with the deceased’s finances during the administration of the estate. A separate log should be kept of the Probate value (value at death) of all assets and liabilities together with all income received during the administration period.

Applying for a Grant of Probate

The Executor needs to apply for a Grant of Probate, which is the legal document which gives the Executor the authority to deal with the deceased person’s estate. A Grant of Probate is almost always needed when the person who dies leaves one or more of the following:

• An estate worth more than £5,000.
• Stocks or shares.
• Certain insurance policies.
• Property or land held in their own name or as ‘tenants in common’.

The Grant of Probate is used to show organisations that the Executor has the legal right to access funds, sell, transfer assets and discharge debts. Once the Grant of Probate has been obtained the estate can be organised and distributed. It is therefore important to manage the beneficiaries’ expectations in terms of the amount they are due to receive and when they’ll receive it.

Paying Legacies and Transferring Assets

The legal Will may provide for certain personal items to go to specific persons. These should be transferred to them and receipts obtained. Legacies should be paid over and receipts obtained.

Final Stages

Having obtained a certificate from the Capital Taxes Office (a department of the Inland Revenue) that all Inheritance Tax has been paid and also receiving clearance from the deceased’s own Inspector of Taxes that no further Income or Capital Gains Tax is due, the final estate accounts may be prepared and approved by the Executor. The residue of the estate may then be distributed in accordance with the terms of the last Will and Testaments and receipts obtained from beneficiaries. It is common practise for payments on account of the residue to be made to beneficiaries where the administration estate period is likely to be some months. The beneficiaries should then be provided with certificates stating how much Income Tax has been deducted from their share for use in connection with their own Income Tax affairs.

How can Redstone Wills help you?

• Acting as an Executor.
• Redstone Wills can act as a sole Executor to your Estate. Alternatively, Redstone Wills can act as a joint Executor with any other people nominated by you in your last Will. In order for us to act as your Executor, you would need to appoint us in your legal Will, using the Wills Instruction Form.
• Acting as a professional advisor to the Executor.
• We can take responsibility for administering and distributing your estate with full and ongoing agreement with your Executor(s).
• Also if someone dies ‘intestate’ - meaning that they have not made a legal Will indicating who is to receive their estate, we can help administer the estate.

Many people die without making a will, which can cause real problems for loved ones because the deceased’s true wishes are unknown. If you die without making a will, you are deemed to have died ‘intestate’ and the law – rather than you – decides who inherits your estate. Make sure you don’t leave yourself in the situation of not leaving a legal Will.