June 17, 2019

Common Executor Pitfalls

Some need-to-know info about being an Executor

Many people do not realise the complexities involved in acting as an executor, nor the time it can take and all at a time when they are probably least likely to be able to cope, having just lost a loved one.

 

Did you know that acting as an Executor means that:

  1. You have to make sure that the wishes of the person who has died are carried out correctly as far as possible.
  2. You are duty bound, not only to the beneficiaries but also to the court and any creditors.
  3. You are obligated to achieve the maximum possible value from the estate for the beneficiaries and to act in their best interest at all times.
  4. You must keep the estate administration completely separate from your own affairs.
  5. If you get something wrong, even unintentionally then you could be held personally liable and you may have to put things right out of your own pocket.

 

Top 10 common mistakes made by executors:

  1. Executors without any prior experience typically underestimate the amount of time and work involved. The average estate can take 40 – 60 hours, which can span over 9 months to a year, if not longer.
  2. Executors do not keep clear records. Executors need to keep a track of what they are doing and will need to prepare detailed Estate Accounts for the beneficiaries, showing every penny in and out of the estate. Many executors fail to open up a separate bank account to manage the estate funds and so lose track of the estate funds.
  3. Executors bow under pressure from beneficiaries and start to distribute money too early. There is a strict order as set out in law in which things need to be paid from an estate and many executors overlook this.
  4. Executors fail to pay debts and inheritance tax out of the estate in time and so will often incur penalties and charges. They often forego to take the steps to advertise for unknown creditors and beneficiaries to come forward, which means they could be liable for any creditor or beneficiary who may come forward in the future.
  5. Executors can be too willing to take things on trust with removal of assets which claim to belong to beneficiaries. They can also fail to prevent the removal of assets and will not be aware of what belonged to the person who has died.
  6. Executors may misunderstand the meaning of Will and how the law applies. There are many powers and laws that apply to Wills which can be found in statute which most people will not be aware of.
  7. Executors fail to look after assets properly. There are numerous cases where properties are vandalised and the executors fail to ensure there is adequate insurance in place.
  8. Executors manage assets unwisely (e.g.by investing spare cash irresponsibly) and fail to preserve their value.
  9. Executors sell assets too cheaply and sometimes at “mates rates” so without achieving a true market value. Many will often be involved in “sell dealing”, whereby they purchase the estate assets themselves. Little do they know, the beneficiaries could seek recompense for any financial loss from the executor who would have to pay out of his own pocket.
  10. Executors do not use the latest valid Will. Failing to search for the latest Will is something many executors fail to do, which means that an old Will is followed, often having dire consequences to the taxation and distribution of the estate.

For more information or for support, speak to our friendly team. Email hello@fortislaw.co.uk or call 01543 747010

Fortis Law Shortlisted
..... ..... .....
..... ..... .....
...... ......
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram