Death is not a pleasant subject to broach, but one which touches every one of us in life. We have all lost someone close to us, and it doesn’t get altogether much easier – but some of us receive fresh responsibilities in the wake of loss. One such responsibility is that of ‘executor of the will’; what are an executor’s duties?
What is an Executor?
First, you might be confused as to the meaning of executor full-stop. If you have never been involved in the management of someone’s estate after death, the jargon and administration can be confounding, on top of the emotional stresses linked to loss and grief.
An executor, quite simply, is a named person in the will of the deceased who has been chosen to ‘execute’ the wishes of the deceased. Someone will nominate a trusted friend or relative to handle the ins and outs of distributing assets and possessions to the right people. If this is you, you might be wondering exactly what an executor’s duties and processes are.
Valuing the Estate
Following the death of a friend or relative, the first step in an executor’s role is to value the real estate in question. The deceased’s estate is the sum total of their belongings, assets and savings – from stocks and shares to bank accounts and property, and from all belongings to any gifts given within the last seven years.
This aims to calculate how much Inheritance Tax may be due. Inheritance Tax is a standardised rate of tax applied to the value of a deceased person’s estate above a pre-set threshold. At present, the standard Inheritance Tax rate is 40% on any value above £325,000; that is, the first £325,000 of the deceased’s estate is tax-exempt.
Typically, Inheritance Tax is paid from the estate directly, as opposed to from executors or individual beneficiaries. But there are cases in which the Inheritance Tax due on an estate is high, despite there being no money available within the estate to pay it. In cases such as these, executors might use an executor’s loan to pay the tax bill in the short term while managing the estate.
Applying for Probate
In order to legally manage the estate, though, executors generally must apply for probate. Being named as an executor is not quite enough to take control of the deceased’s property and assets, apart from in a few edge cases; attempting to do so without government sanction can be illegal. Probate allows the executor to legally control the contents of someone’s estate after death, where sole ownership of property, stocks and other assets is concerned.
Distributing the Estate
With probate granted, you can begin your main role as executor: overseeing the distribution of items and assets to named beneficiaries in the will, according to the wishes of the deceased. Before this, Inheritance Tax is calculated and paid. You have a conveyancing solicitor to help you with the estate distribution, which is best managed by creating estate accounts for each beneficiary.