John Pengilley, Solicitor in the Private Wealth team at BPE Solicitors, looks at the duties of Personal Representatives and what to do if you are named as an executor in a Will.
Administering the estate of someone who has died can be difficult, especially at a time of great sadness and loss.
This article highlights some helpful points for those charged with administering an estate (known as Personal Representatives, or PR’s for short) to consider, particularly at this time of the year.
What are the duties of PR’s?
PR’s have various duties – some of which include:
- Arranging the funeral
- Looking after the assets
- Settling debts
- Paying Inheritance Tax and other taxes
- Collecting in and distributing the assets according to the Will/Rules of Intestacy
- Being accountable to those inheriting the estate and to the Court on producing an inventory and account for the estate
- Meeting any claims against the estate
PR’s must act with reasonable care and skill in fulfilling their duties. Failure to act correctly can lead to them becoming personally liable for loss in certain circumstances. For example, if an estate has insufficient assets to pay both its debts and the gifts made by the Will, the PR will be at fault and potentially liable if they pay the gifts and do not settle the debts.
You do not have to be a PR if you do not want to be – but be careful!
If you are appointed as an Executor in a Will (a PR) then it is important to know that you do not have to take on this role. You can refuse the role and renounce your appointment so that the other Executors can continue without you.
If the deceased has not left a Will, the Rules of Intestacy dictate who can apply to become the PR’s of the estate.
Once you formally take on the role of PR then you must fulfil the duties mentioned above. However, if you do not want to be a PR, you should renounce and avoid what is known as “intermeddling”. Intermeddling is carrying out certain acts that a PR would do, which can commit you to acting as a PR – even if you do not wish to continue.
What to be aware of this Autumn/Winter
Autumn is an important time for PR’s to make sure that they have everything covered when looking after a property that is part of an estate. Such properties can often be unoccupied, and require work to secure, insure, maintain and monitor. Things to consider are:
Ensure that the property is well secured from thieves/vandals/squatters. You may wish to consider changing locks if there is the potential for others having had access to keys/copying keys.
As a PR is responsible for looking after the assets of the estate, loss caused through a lack of insurance can lead to personal liability for the loss.
Specialist insurance is sometimes needed for unoccupied properties, with strict policy terms to be aware of. Failure to follow the terms can invalidate the insurance policy, which means that it will not pay out if the property becomes damaged.
A common policy term for unoccupied insurance is that during the colder months the heating must be kept on at a certain temperature, or the water system must be drained down. This is becoming particularly relevant with Autumn now upon us.
Weekly or fortnightly visits to the property may also be a condition of the insurance. It is important to keep a log of visits, as the insurer is likely to ask for the dates when the property was visited. Perhaps do not keep the log solely in the property itself as it could be damaged or destroyed.
Check the terms of the proposed policy, and that the cover offered is sufficient. Some policies only have a very limited scope (fire, lightning, explosion and earthquake only, for example) and will not cover floods/escape of water, malicious damage and theft so you need to ensure that you get the correct cover.
This is the ideal time to check that the heating system is in good working order and does not need a service, etc. A defective heating system in winter can lead to cold/damp which causes damage. At worst, a broken heating system can lead to frozen pipes, which could burst and cause severe water damage.
There are many important things for PR’s to consider which cannot be covered here. These include the importance of Trustee Act Notices for locating creditors and protecting PR’s from personal liability for debts, potential claims against the estate and how to meet those, how to deal with beneficiaries that cannot be located, the importance of bankruptcy searches for beneficiaries when making distributions, dealing with various taxes, trusts, etc.
If you need any advice on this topic then please contact John Pengilley at email@example.com or call 1242 248440
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