When making a Will one of the most important clauses in it is who your Executors and Trustees will be.
Your Executors and Trustees are the people responsible for dealing with the administration of your estate after you have died.
Most people will appoint their closest relatives such as their spouse or children but is this always the best thing to do?
Zoe Watson, paralegal in the Wills, Trust and Probate team at Wake Smith Solicitors looks at the role and the most suitable choices to make.
This article covers:
- The role of an Executor and Trustee once you’ve died
- Do your current Executors and Trustees have time and knowledge and are they tech savvy?
- Considerations on appointing executors
- Your next move?
The role of an Executor and Trustee once you’ve died
While some people may appoint their spouse or children to not upset them, or make them not feel left out, the reality of being an Executor is it can be a very difficult and time-consuming job. Factor into this the fact they will also be grieving your loss, and it can make things even harder.
Their roles will include:
- Locating and identifying the assets and any liabilities of the estate, for example where are all your bank accounts, do you have any shares, are there any final utility bills or debts that need paying, do you have a house that needs to be sold?
- Once they have located the assets, the Executors need to get them all valued, so that they know the total value of your estate. They will also need to keep a note of all liabilities that need to be paid back once they have funds to do so.
- Calculating if Inheritance Tax is payable and if so, complete the relevant HMRC forms and schedules and arrange payment of the tax due.
- Applying to the Court for a Grant of Probate. Probate is the document naming the Executors and gives them the legal authority to administer the estate. There are some estates where this document may not be needed, but it is becoming much rarer for this to be the case.
- Dealing with the administration of the estate by collecting in the assets – this can include closing bank accounts, selling shares, dealing with the sale of a property etc. and having all funds paid into an Executor account.
- Making sure all claims, debts and administration costs are paid.
- Dealing with taxation returns – Income Tax up to the date of death, income tax during the administration period. In some cases, Capital Gains Tax may also need to be reported.
- Locating the beneficiaries named in the Will.
- Arranging for the distribution of the estate in accordance with the terms of the Will.
- Preparing Estate Accounts.
- Managing any Trust in included in your Will eg: a Property Trust, Vulnerable Persons Trust or Life Interest Trust.
- Holding funds for children until the date specified in the Will eg: some people don’t want beneficiaries to inherit until they reach a certain age, such as 21 years.
- Complying with regulatory obligations which may include registering any Trust arising under your Will with HMRC's Trust Registration Service.
Therefore, there is a lot of work to do and a lot of paperwork and form filling. There are also now a lot of online requirements to complete, such as the Probate Application.
Do your current Executors and Trustees have the time and knowledge to deal with these tasks and are they tech savvy?
The most important consideration when choosing an Executor is speak to them and ask them whether they are happy to take on the role. Lots of people name Executors that haven’t actually been consulted about it.
The other thing to consider is whether your Executors will have the time to deal with your estate or are they local enough to you. Will they be able to visit banks, visit the house regularly to comply with home insurance requirements, meet estate agents or house clearance companies. Will they be able to sit and complete Inheritance Tax Returns or applications for Probate?
Considerations on appointing Executors
You have a couple of considerations when appointing Executors.
These are:
- Name your closest relatives or friends regardless as to whether you think they will be able to manage the administration. They can always appoint a solicitor to help them deal with the estate.
- Appoint people you know have the relevant skills, are local to you and have the time to be able to deal with the estate on your behalf. These might not necessarily be your closest relations, but may be more able to get the job done quickly and efficiently.
- Appoint a professional solicitor to deal with your estate. As an example, you could appoint Wake Smith Trust Corporation to be your Executors and Trustees and the firm will deal with everything. This way, professionals dealing with estates every day will be sorting out your affairs and your family members do not have to worry about legal requirements and tax affairs at a difficult time. Your beneficiaries will be kept in the loop about what is happening in the estate, but none of the burden of handling the admin will fall to them.
- Make sure executors get along with each other. They could be having to talk to and deal with each other for 12-18 months, so make sure they know each other, are friendly with each other, or are professionals.
There have been too many occasions where estates have become delayed and have incurred extra costs because Executors have been appointed that can’t be in the same room together.
Your next move?
If you have any questions, or would like to book an appointment to review your Will and estate planning please contact our Private Client Team on 0114 266 6660, or contact us online by clicking the contact us button below.