Estate Administration: How Professionals Can Help
Posted on 4 March 2019 by Catherine Murton
Hopefully we are at last moving into spring and can start to look forward to sunshine and longer days. I have been lucky enough to have been invited to talk to some local groups in the last few weeks and one of the duties of the Speaker is to judge The Best Flower Competition. There really is nothing like a daffodil to make you think that winter is over!
Sadly, the short days and the cold weather tends to mean that more people pass away between October and February than the rest of the year and new rules have been introduced from January to try to make the process of dealing with the administration of the estate of a deceased person a bit easier.
Previously, the Executor named in the Will was required to swear an oath before an independent solicitor and to ‘mark the Will’, which in essence meant signing the top of it. This requirement has now been removed and the Executor simply has to sign a statement of truth confirming the details of the deceased person, that they are the named Executor and that they have declared all of the known assets.
It has always been possible for an executor to administer an estate without the involvement of a solicitor but, previously, a solicitor would have been required to administer the oath. Under the new rules a solicitor is not required at all. However, it is still necessary for a tax form to be completed, regardless of whether any Inheritance Tax is actually payable, and where tax is payable a more complex return to H M Revenue and Customs is required.
The role of Executor carries with it personal liability. This means that if an estate is not properly administered, for example the Inheritance Tax paid is incorrect or money is wrongly distributed to beneficiaries, then the Executor must correct the error from their own funds. In some instances there may be insufficient assets in the estate to pay all of the liabilities (we call this an insolvent estate) and it is then the duty of the Executor to pay the outstanding debts in a strict order and to apportion payment between the creditors appropriately. Again, failure to do so correctly can result in a personal liability to the Executor.
When a solicitor acts on behalf of an executor the legal costs are a liability of the estate. This means they are paid from estate assets rather than the Executor paying from their own money. If the estate is incorrectly administered the Executor will still be personally liable but, as they have instructed a professional to act on their behalf, it will be for the solicitor to rectify any errors. All solicitors are covered by very substantial indemnity insurance to ensure that any error that results in a loss to the estate will be fully compensated.
There are internet videos on everything from plastering a wall to opening a can of beans and we are all keen to save some money and do things ourselves whenever possible. Sometimes that works out well (I once mended my tumble dryer from a You Tube online demonstration) but sometimes it is worth the money to have something handled professionally. Of course, I am completely biased, but I think estate administration in all but the most simple of circumstances is one of those things.
If you would like some more information then please do give me a call on 01935 382689 or email at email@example.com. As always, our legal clinics are available if you need some free advice and no appointment is necessary.
Posted in: Probate and Estate Administration