When a person makes a will, they appoint one or more Executors. The role of the Executor is to gather in the assets of the estate, to pay off all debts and liabilities, and to distribute the estate in accordance with the terms of the will. An Executor must be of sound mind and over the age of 18.
A person can name as many Executors in their will as they wish, but the Probate Registry will only appoint four at any time. If an estate is straightforward, one Executor may be appropriate and this is often the spouse or partner of the person making the will.
Often two or more Executors will be appropriate – it is good idea to appoint someone from a younger generation (e.g. adult children). It is important for Executors to understand that they are taking on a lot of responsibility when agreeing to administer an estate. They could take on personal responsibility to any creditors if they remain unpaid and to HM Revenue and Customs if Inheritance Tax is due and remains unpaid or is calculated incorrectly.
A key role for Executors is to ensure that the assets of the estate are properly distributed. This will involve identifying the beneficiaries named in the will to ensure that their entitlement is received by them. An Executor will obtain a receipt from a beneficiary. However, an additional worry for Executors is the situation involving the insolvent beneficiary.
If a beneficiary is insolvent, they may not be able to give a receipt for an entitlement that they receive from an estate. In such circumstances, the Executor could face personal liability. The risk is that the Trustee in Bankruptcy may be entitled to the funds and they may be able to claim on behalf of the creditors if any funds due are not properly paid.
This risk highlights the importance of considering the appointment of a professional Executor as well as family members or friends. Alternatively, Executors can take professional advice to help them to administer the estate. Such steps would be well advised if it is known that a beneficiary is in financial problems.
To discuss this or any other wills and probate related issue, contact us.