A person’s estate is made up of the assets, property and possessions they had at the time of their death. The process of administering an estate involves collecting in assets of the estate, settling any debts due (including outstanding taxes), paying any legacies and distributing the estate amongst the respective beneficiaries. This can be a challenging task at what is often a difficult and emotional time for family and close friends.
Those of us who have been through the process of obtaining probate will be aware that the role of an executor can be onerous both in terms of time and trying to do the best for the rest of the family.
As an executor you should be also aware that your role comes with a number of responsibilities for which you may be personally legally liable. The following list highlights aspects of an estate which will hold potential risks.
- Ensuring that you are working from the latest valid Will
- Conducting a search to identify all the financial assets that will have to be taken into account
- Conducting a section 27 search in order that all outstanding debts are identified and taken into account
- Ensuring that all beneficiaries are correctly identified
- Checking that none of the beneficiaries is bankrupt
- Correctly calculating and paying all taxes
- You may also have to realise a fair value for the deceased’s assets from property through to personal items such as jewellery, art or furniture
What does personal liability mean in practice?
As estate administration can be complex and detailed, legal firms are obliged to take out insurance to cover the potential for any of the elements above to go wrong.
What if, for example, you followed the deceased’s instructions to give each of their grandchildren £5,000 but after the estate had been distributed it became clear that somebody had been missed or again, having distributed the estate, realised that there was further Inheritance Tax to pay.
Unfortunately the buck really does stop with you and whilst it might be feasible to reclaim money from beneficiaries to make good any shortfall, that can become a very messy business and may well leave you ‘out of pocket’.
If you are uncertain if these points have been addressed correctly please contact us to conduct a review – call on 020 8464 4242.
This article has been prepared in order to provide general guidance to clients and should not be treated as legal advice. We recommend you contact a solicitor who will be able to take your specific circumstances into account when advising you.