The executor of a will is someone that is put in charge of carrying out the instructions in a will. If there is no will, then an administrator such as the next of kin can apply for a grant of representation to deal with the estate.
Many people choose a family member or friend to be the executor of a will. This is because the alternative of selecting a professional organisation such as a solicitor, bank or accountancy firm to execute their wishes can cost in the region of 2-3% of the value of their estate, which can be considered expensive.
Apply To Be a Personal Representative
All executors must apply to become a personal representative. They will then receive a grant of representation which gives them the right to control the person’s estate and have access to bank accounts.
The first step is to fill out a probate application form PA1. This initial process can take several weeks and you must swear an oath before you receive the grant of representation. Executors should then send a copy of the grant to all banks or other organisations that they need to release information from regarding the assets of the deceased. You will also usually need to provide a copy of the death certificate.
Paying Inheritance Tax and Debts
Executors must collect or sell the assets of the deceased and pay inheritance tax and all other debts such as utility bills that are outstanding. If you place a notice in ‘The Gazette’ then creditors will check here and be given the opportunity to come forward and claim debts that they’re entitled to. This step protects executors from the responsibility of those debts.
As the paying in and out of money on behalf of the deceased person can become quite complicated, it is normally a good idea to open a separate executor’s bank account.
Distribution of the Estate
It is then necessary to distribute the possessions and finances of the estate to those beneficiaries who are entitled to it. If recipients are legally named in the will, then they will receive parts or all of the estate. However, alternatively if there is no will, then an executor must follow the rules of intestacy which states who will inherit the property and estate of the deceased.
Consider Executor Insurance
If you have been selected to be an executor for a will, it can initially seem like a daunting prospect, particularly if you’ve never had to do it before. However, if you take certain precautions then it can be a straightforward and certainly achievable task.
It’s a very wise idea to take out some executor insurance before you get started. This is to protect you against liability and any hidden problems that you may be unaware of within the estate. If any beneficiaries, tax officials or estate creditors attempt legal action against you, then the insurance will cover you. The premium can be deducted against the value of the estate.
There’s no need to feel overwhelmed by the processes involved in becoming an executor. If you have any concerns about the red tape, then speak to the Probate and Inheritance Tax helpline on 0300 123 1072.
Peter Collins is a director at LFC Risk and Insurance, who provide individuals and businesses with insurance and risk management advice.