The level of restrictions which have been imposed to help control the spread of Covid-19 are unprecedented in recent times and as a result, our daily routines have changed significantly. Sadly, during this difficult time many people have also found themselves appointed as the executor of a loved one’s estate. This can be a daunting prospect at the best of times, without the additional complications caused by a global pandemic.
Recently, there has been an increase of claims by beneficiaries against the executors of an estate. This rise is expected to continue as many people are facing financial hardship as a result of the pandemic.
It is therefore essential that executors are aware of their obligations to ensure the estate is correctly administered; this will reduce the risk of a successful claim being brought by a beneficiary.
In this article we will consider the main duties of an executor and how they should ensure the estate is correctly administered whilst also contending with measures which have been brought in to slow down the spread of Covid-19.
You must act quickly and with reasonable care.
An executor must act promptly and with reasonable care although this is difficult if the executor is required to maintain social distance or is vulnerable themselves.
There are various deadlines which need to be complied with; the most important of these is a 6-month deadline for the payment of inheritance tax. It is therefore essential that the executor makes the necessary enquiries to obtain all the relevant information so they can file the IHT return in good time. It is important to bear in mind that many organisations have a reduced number of staff dealing with enquiries and therefore response times are longer than normal.
You must protect assets of the estate.
Executors must ensure they protect the estate and its assets for the benefit of the beneficiaries. This includes making sure property is kept secure and insured. It is also important for executors to ensure they are complying with any additional terms stipulated by the insurance company; this could include regular visits to check empty properties or keeping the heating turned on in colder months.
You must update the beneficiaries of the estate on a regular basis.
Administering an estate can be a long process even without the additional difficulties caused by Covid-19. It is important that the executor updates the beneficiaries on a regular basis in order to alleviate any worries they may have and to help them understand when the estate will be distributed. This has become especially important in recent months as the pandemic has caused a strain on personal finances.
It is often reasonable for an executor to seek professional advice in relation to the administration of the estate. Financial advisors can assist with the management of assets and solicitors can assist with the preparation of estate accounts and the payment of any taxes owed.
It is imperative that complete accounts are kept. These will help the beneficiaries understand what was included within the estate and how it has been distributed. Preparation of full estate accounts can reduce the risk of a claim being brought against the executor and whilst this may be difficult for the reasons outlined above, it is imperative that all assets and liabilities of the estate are documented.
What happens if a beneficiary is unhappy?
Unfortunately, despite the best intentions of the executor there is always scope for a beneficiary to criticise the way in which an estate has been administered.
As is often the case in life, it is best to deal with any concerns promptly and to be direct in order to avoid any misunderstandings. If an executor is not sure how to respond or deal with the situation, it is best to seek professional advice from an experienced lawyer.