Executor of Will Duties

Estate handling

An executor has the powers to handle the estate from the moment of death but, without a death certificate and often without a Grant of Probate, which confirms the executor’s authority, an executor may not be able to get assets collected and distributed without getting the Grant. The reason for this is that asset holders such as banks require evidence both of the death and that the Probate Registry has confirmed the authority of the executor.

Therefore, the executor might have to wait until the Grant has been obtained before starting to wind up the estate. If Inheritance Tax (IHT) is due, then this must be paid before the Grant can be applied for. An executor may have limited power to direct funds from a bank account to HMRC to pay IHT. They may also instruct a bank to pay the funeral bill directly before the Grant is applied for.

Can an Executor withhold money from a beneficiary in the UK?

An executor is personally responsible for sorting out the money and assets of the person who has died as stated in the will. They need to make sure they do everything necessary to complete what needs to be done legally before paying out to a beneficiary.

This means, not only paying all the debts the deceased person may have left, but also checking the status of the beneficiary. It involves formally checking they are not bankrupt as well as paying to the correct “John Smith” named in the will. If there is any possible ambiguity over the identity of the beneficiary this can cause delays. It may even lead to a legal challenge that needs sorting out through mediation or the courts to determine the correct identity. This can take a lot of time and prove costly to the estate.

Any debts must be paid off in full first

Any debts must be paid off in full unless the creditor agrees to write them off before any distributions can be made and beneficiaries paid. If there isn’t enough money to fully pay off all the creditors, there is a set order in which they must be met. If this order is not followed to the letter the executor is personally liable for paying any debts in the hierarchy laid down in law see the section on insolvent estates. Care is needed to correctly identify all debts outstanding at death to protect the executor from personal liability for these debts.

If there is money left over after paying off all the debts, but there isn’t enough to pay all the legacies in full, again a strict order is applied as to which ones are paid in which order. If there is still not enough then beneficiaries may need to be paid pro rata. Failure to follow this order leads to personal liability for the executor.

If a beneficiary is bankrupt

If a beneficiary is bankrupt, the executor cannot pay out to that individual. Any money receivable will be needed to pay off that beneficiary’s debts and has to be paid to the trustee in bankruptcy.

An executor, therefore, needs to be extremely careful not to distribute any of the estates to beneficiaries before making the appropriate checks, however much pressure they may be under from the beneficiaries. They need to take care that they do not become personally liable for such a mistake. They must act correctly and protect themselves. They don’t wish to expose themselves to legal challenges and personal financial loss.

It is up to the executor

It is for the executor to determine when they have done what is necessary so that they are fully protected and can make the distribution. No beneficiary can insist on receiving their payment at any time. It is possible to purchase executor’s insurance but it is usually expensive and beneficiaries may challenge whether it is a legitimate expense that can be claimed from the estate. If an executor is concerned enough to consider this, it is probably time to use a professional legal service rather than deal with the estate oneself.