An executor is the person, or people, named in a will to distribute the estate. Although you do not need to name an executor, failing to do so can cause complications if the beneficiaries disagree on how matters are handled. Professionals will always recommend appointing at least one executor who you trust to manage your estate and affairs.
Almost any adult can be an executor of a will, even if they are a beneficiary, and for very straightforward wills, for example, if you are leaving everything to a child over eighteen, naming them as the executor might be the best option. For other situations, such as where the estate is complex, or there are minor children, it’s vital to get the appointment of the executor right. Indeed, in most circumstances, it’s sensible to appoint at least two executors, and consider whether one should be a professional executor.
The many responsibilities of an executor
The exact role of the executor will depend on both the will and the circumstances of the estate. However, their core duty is to ensure that the wishes expressed in the will are carried out. To accomplish this, though, may require a lot more work than most people realise.
In some cases, it can even mean the executor is responsible for all the administration that immediately follows a death. If there is no one else able to act, an executor may need to register the death and organise the funeral. And where there are dependent children and pets, but no prior arrangements in place, the executor may even find themselves providing interim care.
Generally, though, the bulk of the work is dealing with the administration of the estate. This can be a time-consuming, multi-year, task. The executor must identify all the assets and liabilities of the deceased. They may have to close bank accounts, notify lenders and arrange the repayments of debt, and apply for probate. It will usually mean managing additional bank accounts and records to ensure that everything is kept separate from their own assets.
Once the executor has established the final value of the estate, and paid any debts, including inheritance tax, they can begin the process of identifying heirs and distributing the estate. This is often not as simple as it might seem. Family members may have spread across the world, or relationships may have broken down, making it challenging to trace beneficiaries.
Bequests to minors are likely to require that trustees are identified to help manage them. And where there are disagreements, like what to do with a property that has been left jointly to heirs, the executor can find themselves having to make very unpopular decisions.
Finally, when everything has been distributed, the executor is responsible for drawing up a final set of accounts showing beneficiaries how the estate has been shared.
Aside from the amount of work, it can be emotionally challenging, too. Executors close to the deceased may find it difficult to handle matters that evoke powerful memories and may have to follow wishes with which they disagree. And even when an executor avoids these problems, they may still find themselves dealing with tension from other grieving beneficiaries.
Being an executor also comes with legal obligations and means they can be liable if they aren’t met. Perhaps the most significant obligation is the payment of inheritance tax, for which the executor or executors will be personally liable if it is not paid from the estate.
But despite the amount of work involved, only professional executors can be paid. Other executors can only be reimbursed for the expenses they incur and not paid to cover their time or to compensate for the toll the role can take.
Choosing the right executors
Many take on the role of executor because it makes sense for them to act in that capacity. For example, where everything is left to children, it can be practical and convenient for them to act as the executors. However, in other situations the choice of executor, or the decision to act as one, should be taken very carefully. While it can be hard to say no when asked, it is much worse to take on the duty and not do it properly.
If you are writing a will, always appoint more than one executor. This ensures someone can fulfil the role should one executor die or become incapable of acting, as well as helping them share the load. And consider whether using a professional executor, who acts alongside your other executors, is appropriate.
Using a professional executor can ensure that all duties are correctly discharged. Their independence also provides a benefit when complicated issues must be addressed, since they can make an impartial decision in the estate’s best interests.
However, they do come at a cost. Accountants and solicitors will typically charge 3-5% of the estate value, and often an hourly fee for their work. You can, however, reduce these by making arrangements as part of your estate planning. Our legal partners, Countrywide, only charge 1.5% of the estate value, plus disbursements, for example.
Identifying the right executors is a critical part of the estate planning process. Although you can set out your wishes, your executor ensures they are met. It can be a time-consuming and challenging role and exact a personal price from the executor.
It’s vital to make sure that you pick someone who you not only trust, but it prepared for the duties they will have to discharge.