If you find yourself in the position of being asked to act as an executor of someone’s estate when they die, you will have one of three choices:
- Take up the appointment
- Renounce the appointment
- Have power reserved to you if there is another executor who can act instead
You may feel an obligation to take up the role, particularly if you knew the person who made the Will well and were familiar with their financial affairs.
It is often a spouse or children who are appointed as an executor. Although, in some cases a more distant relative or family friend is appointed, particularly if the children are young or someone does not want to burden their spouse with dealing with financial matters at a time of loss.
The choice of the executor should be carefully considered as whoever is taking up this role will have the authority to deal with the deceased estate immediately after the death. If a person has been appointed as an executor and decides to act, and initial steps are taken to deal with the estate, it may not be possible subsequently to renounce the appointment if they later change their mind.
Recent research by Censuswide Research Agency on behalf of Executors Insurance took a survey of over 2,000 adults and asked them about the role of executors and their concerns about this. Some of the research revealed that many executors found the task of acting in an estate more difficult than they anticipated. Although around 47% found it straightforward, 12% described taking on the role as a nightmare and 17% as much harder than expected.
What does an executor have to do?
Many executors may feel a sense of duty to take up the role for the person who has died but may not realise that when they take on the role they become personally liable for the financial aspects of the estate. If they make a mistake, it could be costly. An executor needs to account to a number of institutions such as the Inland Revenue as well as the beneficiaries of the estate to make sure the correct amount of tax has been paid, the assets have been sold for their best price and that the estate has been correctly distributed. If not done correctly, they could face personal financial liability for the losses incurred and this can be for a period of up to 12 years even though the estate may have been completed.
If the executor is not familiar with the financial affairs of the person who has died, and is not receiving any benefit from the estate themselves, they may want to think carefully before deciding whether or not to act. They may find they have to do some thorough investigations to find out what the deceased person owned, deal with any assets they may have had abroad, and even end up acting as an executor for someone else’s estate if the deceased was acting as an executor for another person before they died.
When should a decision be made?
The decision whether to act or not should be taken as quickly as possible after the death and before any action is taken in the estate otherwise the executor may find that they cannot step away from the role if they carry out acts which suggest they have already taken on the role.
We therefore recommend seeking advice if you have been appointed as an executor and need to make a decision whether or not to act, so that you carefully weigh up the risks involved before taking any action which may suggest that you have accepted the role.