When someone makes a will, they will usually specify the person they want to administer their estate, known as an executor.
Here, Darwin Gray explain the duties of an executor and how a beneficiary can hold the executor to account.
Executors have a number of important duties and responsibilities when it comes to managing the estate of someone who has passed away, including:
- Collecting in and managing the assets of the estate: The executor is responsible for identifying all of the assets that belong to the estate, including any bank accounts, investments, property, and personal possessions such as vehicles and jewellery. They must also manage these assets, ensuring that they are protected and preserved for the benefit of the beneficiaries.
- Paying the liabilities of the estate: The executor is responsible for paying any outstanding debts or taxes that are owed by the estate at the date of death. Typically this includes credit card bills, mortgages, loans, council tax and other debts. The executor must also file any necessary tax returns and pay any inheritance tax owed by the estate.
- Distribute the estate’s assets: The executor is responsible for distributing the assets of the estate in accordance with the provisions of the will or, if there is no will, according to the intestacy rules. This may involve selling assets for cash, transferring ownership of assets, or making cash payments to the beneficiaries out of bank and savings accounts.
- Keeping estate accounts: The executor is responsible for keeping records of the estate’s assets, debts, and distributions, known as estate accounts. These show how the estate’s assets have been managed, how the estate’s debts and taxes have been paid, and what is left to do to finalise the administration of the estate. Beneficiaries can ask to see copies of the estate accounts, and if the executors unreasonably refuse to disclose them the beneficiaries can issue legal proceedings against them.
If an executor breaches their duties, it can have serious consequences for the estate, the beneficiaries and for the executors themselves. By way of example, if the executor mismanages the assets of the estate, it could cause the estate to suffer financial losses, which will impact on what is distributed to the beneficiaries. If the executor fails to pay the estate’s liabilities, it could result in additional costs or penalties for the estate, again impacting on what is available to distribute to the beneficiaries. Executors have a personal liability for any losses suffered by the estate as a result of their breach of duties, and the financial consequences to the executor can be significant.
If a beneficiary believes that an executor has breached their duties, there are steps they can take to try and resolve the issues:
- Talk to the executor: often, the executor is not aware that they are breaching their duties and is doing so completely innocently, so may be willing to correct their mistake if it is brought to their attention. Explaining the concerns to the executor to see if they are willing to take steps to address the situation is usually enough to get things back on track;
- Seek legal advice: if the executor does not agree that he or she is breaching their duties, it is sensible to seek legal advice. A solicitor with experience in wills and probate disputes can assess the situation and provide guidance on the best course of action.
- Try to reach a settlement: a solicitor experienced in these claims will be skilled at negotiating to try and reach an agreement between executors and beneficiaries. Engaging in correspondence, conducting a meeting between the parties and mediating the matter may all assist in resolving the matter without the need to go to Court.
- Issue a High Court claim: If the executor is not prepared to correct their breaches, the beneficiaries may need to issue court proceedings. If the Court agrees that the executor has breached their duties, and that if they remain in post it may adversely affect the estate, the beneficiaries or the proper administration of the estate, the Judge is likely to remove the executor from their role and order that a substitute – usually a professional like a solicitor – takes their place.
Whether you are an executor or a beneficiary, if there is a suggestion or belief that the executor is in breach of their duties, the sooner the issue gets resolved, the better, as the potential financial consequences for the estate, the beneficiaries, and the executor for an executor acting in breach of their duties can be severe.