After someone passes away, the individual appointed as the executor of their estate is granted various powers and responsibilities. This article will outline the tasks an executor is permitted to perform, as well as what they are prohibited from doing.
An executor is named in the deceased person’s Will. Their duties involve gathering information about the deceased's assets, reporting to the relevant authorities, and settling the deceased’s affairs. If no valid Will is present, an administrator may be appointed to carry out these tasks. This will typically be someone entitled to inherit under intestacy rules.
What Does the Role of Executor or Administrator Involve?
Acting as an executor or administrator can be demanding, especially if the estate is large, complex, or if there is the potential for family disputes. It can also be a lengthy process, particularly where the deceased held numerous assets or had outstanding liabilities.
The key responsibilities include:
Valuing the estate
Securing the estate’s assets
Notifying creditors and asset holders of the death
Calculating and paying Inheritance Tax
Applying for a Grant of Probate (or, if there is no Will, a Grant of Letters of Administration)
Collecting the assets and settling any debts after obtaining the grant
Filing reports on the estate’s income and capital gains and paying the necessary taxes
Distributing the estate to beneficiaries and obtaining receipts
Executors or administrators may choose to instruct a solicitor or legal professional to assist with estate administration. Doing so can help expedite the process and lower the risk of personal liability. If an executor administers the estate themselves and makes an error or neglects a duty, they could be held personally accountable for any resulting losses.
What Are Executors or Administrators Not Allowed to Do?
Executors and administrators have a legal obligation to safeguard the estate and act in the best interests of the beneficiaries at all times.
They cannot disregard the terms of the Will and must distribute the estate exactly as outlined. Any funds due to beneficiaries must be paid according to the Will’s instructions.
Assets must be sold at fair market value, and executors are generally prohibited from purchasing estate assets themselves, a practice known as "self-dealing."
Executors must handle the estate diligently, taking reasonable steps to prevent financial loss. This includes seeking professional advice when necessary, particularly to ensure that all available tax allowances and reliefs are claimed, helping to avoid an inflated tax bill.
Executors are not permitted to take money from the estate for personal use, including compensation for their time spent managing the estate. While some executors may be entitled to payment for their work, this is subject to limitations, and they should seek legal advice before withdrawing any payment.
Additionally, executors must not mix their own finances with the estate’s funds. For example, they should not close the deceased's bank accounts and transfer the balances into their personal account, even temporarily. Estate funds must remain separate at all times.
By adhering to these guidelines, executors can ensure they fulfil their role effectively and in line with legal requirements, safeguarding the estate for the beneficiaries.
