The role of the executor is to ingather, administer and distribute the estate in accordance with the deceased's will. It may be challenging knowing where to start if you have been appointed as an executor of a will. So, what does an executor of a will actually do?
1. Appoint an executry (probate) lawyer
Most executors will need legal assistance to administer the estate and there are many things to keep in mind when appointing an executry (probate) lawyer. The first step is to arrange an initial meeting with an executry lawyer, during which they will gather information about the deceased's background; take details regarding the deceased's assets and liabilities; review and discuss the terms of the deceased's will; and set out the next steps of the executry process. You may be wondering about costs – you can get a quick estimate from our probate calculator.
2. Ingather details of the deceased's estate
The executor must gather information about the deceased's assets and debts as at the date of their death. This involves writing to the various organisations involved to inform them of the death and obtain exact details of each asset and debt. It may also be necessary to obtain a valuation of the deceased's home. If you do not have any information about the deceased's estate, an electronic search can help to identify what assets and debts the deceased may have held.
3. Consider legal rights
Legal rights are a form of forced heirship in Scotland which prevent spouses and children from being disinherited by the deceased. The amount to which the spouse and/or children are entitled depends on who survives the deceased. Once the extent of the estate is known, the executor must identify who is entitled to legal rights and provide those persons with a calculation showing how much they are due. Those entitled to legal rights then decide whether they want to receive them or give them up.
4. Deal with pensions
The executor should liaise with pension providers to confirm whether any death benefits are payable. If there are any death benefits, it is often (but not always) the case that the pension scheme trustees will have discretion as to who to pay those to and, therefore, the death benefits will not pass in terms of the deceased's will. Nevertheless, the executor may need to liaise with the pension trustees and complete necessary claim forms in order for death benefits to be paid to the relevant beneficiaries.
5. Pay inheritance tax
Depending on the extent of the estate, the executor may need to settle inheritance tax from estate funds and/or report the estate to HM Revenue & Customs ('HMRC'). An executry lawyer can prepare any necessary return but the executor must review and sign it to confirm that it is accurate before it is sent to HMRC.
6. Apply for confirmation (probate)
Confirmation (the equivalent of probate in Scotland) is an order of the Sheriff Court which gives the executor the power to deal with the estate assets and debts. The application for confirmation involves sending a detailed inventory of all the deceased's assets to the court which must be checked and signed by the executor. If there is inheritance tax to pay it must be paid before confirmation is applied for.
7. Ingather assets and settle debts
Once confirmation has been granted, the next step for the executor is to ingather the estate funds by closing bank accounts, liquidating assets and claiming policy payments etc. The executor must then pay any outstanding debts and legal costs. The executor should also consider whether any income tax or capital gains tax needs to be paid and/or reported to HMRC.
8. Account to the beneficiaries
The executor must act in the best interests of the estate beneficiaries and has a duty to account for their dealings with the estate property. It is good practice for the executor to prepare an account showing all their intromissions with the estate, including assets received, any gain or loss made on those assets, and debts and expenses settled.
9. Distribute the estate
The executry account will bring out the final balance available for distribution to the estate beneficiaries, which the executor should then arrange. This may involve liaising with the beneficiaries as to how they would like to receive their inheritance, i.e. if assets are to be transferred into their name, or liquidated and the proceeds paid out.
Being appointed as an executor, and therefore responsible for administering the estate of a deceased person, can feel daunting. The executry lawyers at Brodies are here to guide you through every step of the process and support you in your role during what is a difficult time.
This blog applies to the administration of estates in Scotland where the deceased was domiciled and resident in Scotland at the time of their death. For more information, please do not hesitate to contact a member of our executry team.