What are the risks associated with taking on the role of executor of a deceased person’s estate? Is it a simple matter of liasing with a few officials and keeping thinks moving or is an executor taking on far more responsibility than they might have thought? We discuss what is at stake for executors looking after an estate and whether they should consider professional help.
An executor is a person over the age of 18 who is appointed to take on the responsibility of dealing with the estate of a deceased person. The executor is required to handle the affairs of the deceased and distribute the assets of the estate in accordance with the law and their wishes as written in their will.
An executor can be held personally liable if they make a mistake in carrying out their duties meaning their personal property and assets can be at risk. The Trustee Act of 2000 imposes a statutory duty of care on executors. This applies equally to a lay executor and to a professional executor. The main difference however is that a professional executor will (or certainly should) have professional indemnity insurance cover in place to cover their actions. A lay person acting as an executor will not have cover, although it is available.
Few people realise that accepting the role as an executor of an estate means the liability to the estate is unlimited in the event of any errors made, putting their entire wealth of personal assets at risk as they could be held legally and financially responsible for any losses to the estate or its beneficiaries.
On many occasions the role of the executor is straight forward and within the capabilities of people able to cope with a little paperwork. The problems arise however if the estate is complicated with a business, or several properties to consider. Overseas property can also present challenges as there are different tax implications regarding the income from these and from the sale of the assets. There may be situations where the instructions in the will cannot be carried out either for a legal or a practical reason. There may even be arguments between the beneficiaries of the estate as to the distribution of the assets and the interpretation of the will.
It is therefore not surprising many people have solicitors / probate professionals to act as executors when dealing with a deceased person’s estate. Although this is something the estate will have to pay for, it is often well worth the expense. Having a third party act as the executor (or one of the executors) also removes the stress associates with carrying out such a task at what is often a difficult time.