In anticipation of the budget and any tax issues coming our way, my husband and I have been writing our wills – a breeze compared to appointing an executor.
It sounds simple, but choosing an executor has been as difficult as choosing godparents for our two children – if only because Andrew and I have both been executors of a will and know the heavy burden we are shouldering. another family member.
Choosing it seemed easy at first. If I die first, Andrew will be tasked with solving things, and vice versa.
Then our lawyer asked what would happen if we both died together. Who would we appoint as executors to settle our estate and ensure that our children are cared for? A more difficult decision.
How do we choose the right person or persons? writes Ruth Jackson-Kirby. They would be responsible for carrying out our wishes after our death
What would happen if we and the children were murdered? An extreme situation to think about, and a grim scenario for our executor. It has left us stuck.
How do we choose the right person or persons? They would be responsible for carrying out our wishes after our death, administering our estate, selling everything and passing on items to our heirs.
On the one hand, you want someone who will do his job well and not cause more unrest in an already emotional situation. On the other hand, just one look at the busy lives of our families and we realized how heavy the responsibility is.
Add to that the fact that the number of executors being sued by disgruntled beneficiaries increased by 21 percent last year, and the role becomes even less attractive.
According to research by TWM Solicitors, angry families have taken executors of wills to court, claiming they had not acted in their best interests, or that their neglect had damaged the value of the estate.
But let’s get back to what exactly an executor does.
The responsibilities should not be underestimated. An executor’s job is to sell assets, calculate and pay any inheritance taxes, settle any debts the deceased may have, and ensure that heirs receive their inheritance.
Get it wrong and you could find yourself personally liable for unpaid inheritance taxes, in the midst of a bitter family dispute or, as is increasingly common, in court.
We’ve heard stories of executors discovering debts owed by the deceased after distributing the entire estate, leaving them with the choice of paying off the debt themselves or recovering money from family members. Or executors of wills who, due to pressure from beneficiaries and arguments within the family, have thrown in the towel and appointed lawyers to act on their behalf.
Probate delays in recent years have led some executors to pay inheritance tax out of their own pockets, as the bill must be paid before probate is granted. They must then pay themselves back from the estate. ‘Appointing an executor should be done after obtaining professional advice,’ says Caroline Foulger, partner and head of private client at TWM Solicitors.
‘Choose the wrong executor and costly disputes can easily arise.’
If you have been asked to become an executor, or are considering who to choose, it is crucial that you understand what is involved, as many do not realize what they are taking on.
“An executor is responsible for ensuring that the wishes set out in a person’s will are followed after their death,” says Kieran Osborne, CEO of estate planning firm Squiggle Consult. Executors may also need to manage the deceased’s property until it is sold. This may mean clearing, insuring, and maintaining the contents.
“Sometimes even simple tasks such as paying beneficiaries can be more complicated than expected: confirming the identity of a beneficiary, conducting a bankruptcy check, checking that bank details are correct,” said Jade Gani, managing director of Circe Law.
“Being a will executor can be a thankless job,” says Foulger. ‘The biggest risk to beneficiaries, and the executors themselves, can be as simple as a lack of understanding of what is expected, or a lack of time to deal with matters properly and efficiently.’
If the heirs feel that an executor has not done his job properly, family disputes and divisions may arise.
Executors of wills can also run out of money if they make mistakes. For example, errors in calculating inheritance tax could result in HMRC requiring the executor to pay all unpaid bills in years to come.
‘Executors are personally responsible for all aspects of the administration. One of the most technical is declaring the estate’s inheritance tax; reporting the accurate value of all assets and all relevant lifetime gifts to HMRC and claiming all relevant exemptions, reliefs and allowances,” says Foulger.
However, it doesn’t have to be a nightmare, argues Osborne, who adds: ‘It can be a challenging responsibility, but it doesn’t have to be terrible. It is often doable for someone who can organize and communicate well, especially with the right support.’
Here, experts give their tips for taking on the role of executor without any hassle.
Make sure your executor has something to gain from carrying out the job, says Caroline Foulger of TWM Solicitors. ‘There are many cases where someone chooses an executor who inherits nothing at all from their will. In such cases, they ask that person to endure months of hard work, stress and even arguments without compensation.”
If an executor is not diligent, it can cost the beneficiaries, and possibly the executors themselves, thousands of dollars. If you are an executor, be careful when selling items. It is quite common for there to be disagreements between executors and family members about how and when to sell assets.
‘If the executor sells shares that later increase in price, this could lead to disputes. The same thing can happen if the executor sells a property during a crisis,” says Fougler.
‘Timing the market is an impossible task, but unfortunately some heirs see it as part of an executor’s job.’
Gary Rycroft, partner at Joseph A Jones and Co Solicitors LLP, says it is madness to take on this role without taking legal advice.
“If an executor is only a minor beneficiary or no beneficiary at all, one wrong move could still leave the executor personally liable for their mistake,” he says.
‘Seeking legal advice can also ease the burden of personal responsibility, and legal costs will be paid from the estate. ‘If the executor takes formal legal advice, the lawyer may be blamed for any mistakes and may even rely on the lawyer’s insurance policy to cover any losses or claims.’
Estate planning agencies can support executors of wills at various levels, ranging from free advice on calculating figures and taxes to complete estate administration where the executor can delegate a lot of responsibility.
‘It also helps if the person who drew up the will thinks about the tasks he leaves to an executor. Having clear instructions in your will and access to professional advice can make the process smoother.
‘When choosing an executor, you want to choose someone you trust, who is organized, reliable, and able to handle financial and legal matters. It’s not just about their relationship with you, but also about their ability to handle a time-consuming task. It is often wise to appoint a backup.
‘If you appoint more than one executor, consider whether they will get along. Disputes between them can cause problems or delays.’
Make sure you draw up a clear and valid will, says Jade Gani of Circe Law. If you want to make life easier for your executors, start with a current valid will and then leave clear information about your accounts and assets.
“It can be helpful to keep details of account numbers and values, but be careful not to add passwords or PINs,” she says.
‘If you use an accountant, financial advisor or other professional, keep the details with your personal documents. The more organized you are, the easier it will be for your executors.”
As for our decision? Andrew and I have chosen to let the professionals be in charge when we all die. Our lawyers will act as our executors and donate everything to charity.
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