The role of an executor does not come into play until the person who made the will, known as the testator, passes away. On a practical note, as an executor it would be sensible for you to be given a copy of the will, or advised where the original is stored, so that when the time comes you do not have any difficulty in tracking the will down.
As mentioned above, your role as an executor comes into effect when the testator has died. As an executor you, along with anyone else who is named as your co-executor, will be responsible for ‘administering’ the estate of the testator. This is a common phrase which means you will be responsible for dealing with the assets of the estate, settling any liabilities (debts owed by the testator), dealing with any tax reporting (for inheritance, income and capital gains tax purposes) and distributing the estate in accordance with the will. You would be expected to keep the testator’s money separate from your own (even if you are a beneficiary of the estate) and keep accurate accounts for the beneficiaries of the estate.
The estate administration process will vary in each case depending upon the size of the estate, the assets which fall within it and any issues which may arise during the administration period.
If the testator owned assets worth more than a few thousand pounds, it is quite likely that a grant of probate will be needed. Different banks and other financial companies have varying thresholds for what they can and cannot release without a grant. A grant of probate is the document which confirms that you, as the executor of the estate, are entitled to administer it. In order to deal with the assets, you will need to supply a copy of the grant to any financial companies involved with the estate.
Once all of the testator’s assets, liabilities and any lifetime gifts that had been made are known, it is quite likely that the majority of your time will be spent in dealing with the IHT position and preparing the probate papers. The process of applying for probate varies and some estates which fall below the inheritance tax threshold (£325,000) may be able to follow an ‘excepted estates’ procedure. This is a slightly simplified procedure than the full inheritance tax return. Estates that are more complex or liable to inheritance tax are slightly different and will need to complete a full detailed return and settle some inheritance tax due before a grant of probate is issued. Guidance has recently been issued that the inheritance tax reporting procedures will be simplified from January 2022 with many non-taxable estates no longer required to complete the current IHT reporting but exact details on this are currently awaited.
It can be quite tricky to bring all of the aspects of a person’s estate together and know what the reporting requirements are for each case. There are also many laws surrounding the administration of an estate. Executors can become personally liable if something goes wrong during the course of the estate administration, so if you are unsure about how to deal with an estate, or any aspect of it, we would always suggest that you obtain legal advice.
Executors are perfectly entitled to seek legal advice and guidance in respect of estate administration matters and this is a liability which can be charged to the estate rather than to an executor personally.