Posted on Feb 27, 2015 in Private Client by Lynne Hopkins
The first in a series of blogs from our Private Client team where they explain the processes of some of the Private Client services.
An Executor is formally defined as 'a legal representative of a deceased person whose duty is to wind up the estate of the deceased'. They are the person appointed, whether by a Will, or by the Court where there is no Will, to deal with matters following a person's death.
You can have more than one Executor and they can be any combination of family, friends or trusted professional advisors such as your solicitor or accountant. Often, the Executor can be assisted by a professional advisor, in most cases this will be a solicitor. It is not uncommon for an individual who is appointed Executor to also be a beneficiary. It is a common misconception that an Executor cannot be a beneficiary.
If the deceased has not left a Will it may be necessary to have an Executor appointed by the Court. Who it is appropriate to have appointed is usually determined by entitlement to benefit from the deceased's estate.
The Executor has to identify what is in the deceased's estate i.e. assets such as bank accounts, policies, property and also any outstanding debts and liabilities (for example utility bills, credit cards, loans, mortgages) which will have to be paid from the estate. They have to take control of the estate, gather in the assets, pay any debts and then ensure the estate is distributed to the correct beneficiaries.
Acting as an Executor can be relatively straightforward, but an Executor does have a duty to act with care and if they don't, can incur personal liability. The Executor is entitled to be reimbursed for any reasonable expenses (e.g. travel, purchase of extract death certificates) but are not entitled to be reimbursed for their time and are expected to act without payment, unless this has otherwise been specifically provided for by the deceased in the Will. Where professional advisors charge a fee, the fee is not because they are acting as Executor but normally for the service being provided to administer the estate.
Once the Executor has gathered in the estate and settled any debts, they are then in a position to pay or transfer the estate to those persons who are entitled to benefit, either under the Will, or in accordance with the law where there is no Will.
A role often confused with that of an Executor is that of an Attorney. Whereas you may put a Will in place during your lifetime to direct what is to happen on your death and appoint an Executor to deal with this, you may also put a Power of Attorney in place, appointing Attorneys, whose role is to assist you with your affairs during your lifetime. It is not uncommon for individuals to appoint the same people to both roles, therefore you may be their Attorney during their lifetime and their Executor on their death.
Lynne Hopkins is an Associate in our Private Client department providing specialist advice on Wills, Powers of Attorney and Executry services. If you have any questions about these services please contact Lynne on 01382 229111 or email firstname.lastname@example.org