Choosing an executor is an important decision, but what exactly is an executor and what does an executor do? According to a number of dictionary definitions, an executor is someone who performs, carries out or executes some duty. An executor should not be confused with an executioner!
What is an executor of a Will?
In the legal context of someone’s Last Will and Testament, an executor is the person term who is appointed to carry out the instructions of someone’s Will. An executor’s responsibilities are many and varied and include applying for, and then dealing with, probate; ensuring the deceased’s debts and taxes are paid and distributing the estate to the beneficiaries named in the Will, in accordance with the instructions in the Will.
That sounds straightforward enough but it can take a fair amount of time and can involve making some difficult decisions, such as negotiating the sale of property so that the beneficiaries named in the WIll will inherit the proceeds.
What makes a good executor?
Executors need to be trustworthy, good with responsibility, able to deal with administrative tasks and able to make difficult decisions at a stressful time. The executor must be comfortable with financial matters and have a strong enough character to ensure that everyone is treated fairly and according to the wishes in the Will. As well as being trustworthy and financially literate an executor should be good at liaising with different people and organisations and able to deal with stress.
Who can be an executor?
Anyone over the age of 18 can be an executor, as long as they are mentally competent. An executor can be a beneficiary of the will, and this is very often the case. Many people choose their spouse or partner, their siblings or their children as executors of their Will.
Some people choose close friends or business associates to be their executor, and some choose a “professional executor” such as a financial adviser or a specialist trust company and some choose the family solicitor although this is becoming less commonplace as the benefits of online will writing become more apparent.
Because they do not wish to overburden their loved ones, many of our customers appoint two executors: a relative or close friend and a “professional executor”. If a “professional executor” is chosen, it is recommended that they belong to an organisation that is regulated.
How many executors do I need?
Up to four executors can be appointed, but as they often have to act together, having so many is not practical. We recommend having either one or two executors. We also recommend naming a reserve or substitute executor in case one of your first choice executors are, for any reason, able to act.
Should an executor be paid?
In some countries, most notably the United States, an executor is automatically entitled to compensation for their services. This is not the case in the UK, although compensation can be directed with the Will. If a “professional executor” is used, they will expect to be paid. This is where many solicitors let their profession down by charging fees which can be hard to justify. A typical solicitors’ fee is 4% of the value of the estate, which doesn’t sound much, but it amounts to a bill of £20,000 on a £500,000 estate. Other “professional executors” would normally charge less than half this amount.
Appointing the right executor is an important decision, and is one that should be discussed with the potential executor to make sure that they understand what is involved, and agree to it.
If you are ready to write a Will online it is essential that you appoint at least one executor – and our online will writing tool will help you do this – in fact it’s foolproof – it won’t let you complete your Will unless you have chosen at least one executor.
Probate is the name generally given to the process of administering someone’s estate when they die. When someone dies, a formal Grant Of Probate must be obtained from a Probate Registry, which is part of the court system, to enable the estate to be collected in and divided amongst their beneficiaries. There are eleven Probate Registry Offices in England, and one in Wales.
Probate is used to describe both the Grant of Probate and the process involved in obtaining it. It includes making an Inheritance Tax return to HMRC and paying any tax due; collecting in the estate from banks, building societies and selling assets if necessary; finalising income tax affairs and pensions; preparing accounts for the estate and paying money due to beneficiaries; including making any gifts as outlined in the Will.
There are actually two types of grant: probate and letters of administration. Probate is granted when the deceased left a valid Will, and is granted in favour of one or all of the executors named in that will. Letters of administration are granted where the deceased did not leave a Will but most people still refer to this as probate because, although there are some differences in the process before the grant is issued, for all practical purposes, the two types of grant are the same.
Is probate necessary?
Where the estate is less than £5,000 and only includes cash funds held in deposit accounts, you would not normally need to obtain a grant of probate in order to obtain the money. However, where the estate is over £5,000 and includes certain assets, like property or shares, then a grant will need to be obtained before these assets can be ditributed to the beneficiaries named in the Will.
Who obtains probate?
If there is a Will, this responsibility falls to the executors named in the Will unless the executors do not want to act. Where there is not a Will, usually the next of kin are entitled to administer the estate and there are statutory rules about which family members that is.
The person who is going to obtain probate needs to access the deceased’s bank accounts, investments and other assets in order to pay their debts, inheritance tax and distribute their estate. It is worth noting that no-one who has an interest in the estate of someone who has died can receive their inheritance until a grant has been obtained.
The Probate Process
The probate process is generally carried out by the executor if there is a Will, or by a court-appointed representative if there is no Will.
The executors will need to obtain a Grant of Probate by applying to their local Probate Registry office. Once the grant of probate is issued, the executors are able to carry out their duties in dealing with the deceased’s assets.
Applying for a Grant Of Probate
There are three main stages in obtaining the grant:
1. Identifying and inventorying the deceased person’s estate.
The executor will need to investigate the extent of the estate including gathering all information about the assets and liabilities of the person who died. The executor will need to contact the relevant banks, building societies, insurance companies and any other relevant organisations to obtain proper valuations of the deceased’s home, other assets, including stocks and shares; and any liabilities, such as the mortgage.
2. Accounting and appraisal of the estate.
The executor will need to complete the inheritance tax return form, currently form IH205 or IHT207. They will also need to contact HMRC to establish the inheritance tax due. Depending upon the circumstances, an accountant or tax adviser might be helpful here to double check the numbers. Once the tax return has been completed in full and filed, the application to the Probate Registry should be made.
3. Filling Out The Probate Application Form
The Probate application form AP1 now needs to be completed. This form includes details of the inheritance tax that has been sent to HMRC. Along with the AP1 from, the executor will need to provide the original Will and three copies of the will together with an official copy of the death certificate. A visit to the the probate office is necessary for an ‘interview’ to take place to ensure everything is in order.
After Probate Has Been Granted
There needs to be a formal distribution of the remaining estate as the Will directs. This involves collecting in the assets, and paying the debts of the person who has died, and then distributing the remaining estate to the appropriate beneficiaries in accordance with the terms of the Will (or the statutory order of distribution if there is no Will), and producing final estate accounts for the beneficiaries and a final tax return for the deceased.
The hold up here is often selling the property, as that is normally the major asset; and it oftens take longer than people expect.
The probate process is relatively straightforward and is a lot less complex than people imagine. Do not be afraid to use specialist legal and tax experts though. However, a word of advice when using solicitors. Obtain a firm fixed price from them for the work you want them to do. Do NOT agree to an open ended pay-by-the-hour arrangement as they will then be incentivised to take longer than is necessary and longer than you would want. Please remember that most probate work is done without needing to employ solicitors, and most of the work involved with probate is administrative. It is often the case that you will be asked to provide the solicitor with extra paperwork and you will be charged £200 per hour or so for a non-qualified legal secretary to do the bulk of the work.
As previously stated, the probate process is relatively straightforward and is a lot less complex than people imagine. We hope that this probate guide has been useful, and welcome any comments.
A well respected influential legacy body argue that proposals put forward by the Law Commission for reforming wills need to urgently address the impact of technology.
In a consultation response to the Law Commission, the Institute of Legacy Management, the membership body for legacy professionals – those responsible for the successful and sensitive administration of donors’ final gifts to charitable organisations, said the Law Commission ‘seems to defer’ all conversation on technology and that the issue needs consideration as the growing trend towards writing wills through technology is already affecting the probate process.
They stated that their consultation highlighted several areas the Law Commission should be looking at with a greater sense of urgency, expressing a concern about the consultation’s approach to the impact of technology. They stated that the commission has failed to acknowledge and promote discussion around the challenges being felt by technology, and that the distribution of digital assets increasing role of technology in the drafting, execution and the storage of wills and the rising number of unregulated providers in this area gives their members cause for concern now.
The consultation suggested that the Lord Chancellor should be given the power to introduce fully electronic wills by statutory instrument, but it warned that it does not ’specify a timeline or the level of public consultation this would involve’.
Institute of Legacy Management chief executive Chris Millward said: ‘The consultation seems to defer all conversation on technology in the will process, suggesting it’s a future problem. But we know that people writing wills online is having an impact now and requires considerable consideration, fast.’
‘Our members are already seeing the consequences of wills made online, and as we become more reliant on technology, this is likely to increase We can embrace technology while retaining essential safeguards and standards to make sure such wills are legally robust and vulnerable people are protected.’
Millward said tighter regulation and standardisation of online will-writing platforms would help achieve this, an idea solicitors have also backed.
The consultation closed last week and the Law Gazette revealed that this had been one of the Law Commission’s most engaging consultations ever.
Anyone drawing up their will should think carefully before appointing a solicitor as an executor as they can often charge crippling fees.
A recent article in The Times provides damning evidence that solicitors can charge exorbitant fees to act as executors. One of their readers found himself powerless to stop his father’s estate, worth £300,000, being stripped of more than £115,000 in legal fees.
After their father’s death Paul Cutler, 47 discovered that his father had appointed a solicitor as executor of his will. The solicitor then chose to appoint the legal firm that he worked for, Blake Morgan, to handle probate.
As a beneficiary of the will, Paul complained to Blake Morgan that the probate costs were spiralling, and was told that only the “client” of Blake Morgan, that is the executor (Blake Morgan’s employee), was able to complain, despite the obvious conflict of interest.
The outrageous costs included £90,000 being charged to administer assets, primarily two small properties, and about £4,000 for fees to pay utility bills, some of which were not paid on time, resulting in late payment penalties. Work was undertaken on an hourly rate, with expensive senior staff used to oversee the most simple of tasks. An incredible 18 members of Blake Morgan’s staff billed for their time in administering the small estate.
A spokesman for Blake Morgan, whose company slogan is “Making A Difference” said: “We recognise that the fees charged in the administration of this estate were substantial. They reflect the complexity of the issues encountered in the administration. We responded to a complaint made by the beneficiaries under our internal complaints process. Following a review of the file it was concluded that the fees charged were reasonable for the work done.”
After lodging a complaint with the legal ombudsman, Mr Cutler says he was told that the ombudsman did “not have the power to override the executor’s discretion and to say that the costs incurred were not appropriate, if the executor has decided they are”.
Mr Cutler said: “It was a surprise to learn that only the solicitor acting as executor, an employee of his legal firm, could say that the estate had been overcharged. Clearly it would not be in his interest to do so. The solicitor also gave his firm power of attorney over his executorship. This meant the partners were acting as the executor [client] and the solicitor [for the client] determining the fees that should be charged.”
Rob Sendall of Lifetime Legal, which offers affordable legal services from a panel of solicitors, says: “Some solicitors systematically encourage clients to appoint the firm as executor, without explaining that this appointment gives them absolute power over the administration of the estate and ultimately the fee that is charged.”
The Law Society sets out guidelines for solicitors who wish to appoint themselves or their firm as executors in a will they are drafting. It states: “You must not exploit your client’s lack of knowledge for your own advantage by leading the client to believe that appointing a solicitor is essential or indeed the norm.”
It goes on to outline that there “may be no advantage where, for example, the estate is small or straightforward . . . and the client should be advised accordingly.”
Chun Wong, a partner at Hodge Jones & Allen, an expert in civil disputes, says that a solicitor acting as executor owes a fiduciary duty of care to act in the beneficiaries’ best interest, and will have to decide if there is any potential conflict with using their own firm.
“While it is the norm for solicitors to do this, the duty to the beneficiaries must outweigh the commercial benefit to the firm. In most cases you’d expect fees to work out at between 1 per cent and 2 per cent of the value of an estate.”
Blake Morgan certainly follow their slogan of “Making a Difference” by somehow managing to charge over 30% of the value of the Mr Cutler’s father’s estate.
Readers of The Times were quick to comment online on these exorbitant fees, using terms such as professional gold-diggers and crooks. Here we reproduce just a few of the comments.
Richard Smith echoes the view of many by saying: “Never appoint the solicitor who draws up your will to be your executor. This common practice should be outlawed as a grossly unprofessional conflict of interest. The only reason for it is so that the lawyer’s firm can benefit unchallenged from the subsequent fee income from administering the estate.”
Richard M said: “I thought solicitors’ fees could be “taxed”/assessed by the Law Society. But if that is now the Legal Ombudsman process, as referred to, and he can do nothing, the answer is simple -don’t have the solicitor as executor. Really disgraceful.
Mr Ogilvie said: “The idea of appointing a solicitor firm to do as they like (because I will be dead and unable to supervise their work) is horrific.”
Wyn Ford said: “As a result of this article, my draft will shall be amended to remove the law firm as executor.”
Rue de Remarques said: “How solicitors justify fees of the size mentioned is a mystery and a scandal.”
Tim Chilton said: “I’ve just completed probate on my mother’s estate of similar size and complexity. It is simple logical and straight forward. My only direct cost was the £220 probate fee.”
Irene Brown said: “A solicitor drew up my will several years ago and I appointed his firm as executors. On Monday I shall be drawing up a new will myself and appointing my son as sole executor to ensure that he will not be ripped off.”
David at Wateroakley said: “To remind me never to use a solicitor to draw up a will and be nominated as the executor, the statement of account for my Grandmother’s estate is framed for posterity. Due to the stupidity of the solicitor’s wording of the will, and his subsequent intransigence, the estate took 15 years to be settled. The solicitor’s fees funded his lifestyle for many years, and the money from the estate he spent on wholly unnecessary disbursements helped his mates in the local business community. By which time the sole beneficiary had died three years earlier.”
David went on to say “An estate is a source of regular fee-income for an intransigent executor.”
Vincent Green went as far as to comment “I would say they are crooks.”
Anthea Rogers said: “You do not have to use a solicitor for the majority of the work. Much of it is simple administration and for the more complex tasks you can either ask HMRC for help or employ a solicitor to perform specific tasks that you cannot or do not wish to. It is very distressing to see a firm unable to perform basic tasks without error. For me, that smacks of lack of professionalism – if you can’t carry out the work without spelling mistakes in documents and errors on HMRC forms, then should you really be charging £250 an hour?
Malcolm Slade with his tongue firmly in his cheek commented “Solicitors ripping people off? Who’d have thought it?”
Voice of the Voyager said: “Those who make the law of the land need to review such incestuous relationships between those drawing up such documents, and also transacting them. With 27 years in the finance world, I have seen it all. You do not need a solicitor to transact probate, it is easily done and the probate office are extremely helpful. If you need some legal work undertaking, employ a law firm to do that specific piece of work, not the whole estate. I also believe the ‘free will month’ is the loss leader to look to do good in the community and smiling faces in the local paper, but it is the golden opportunity to insert little time bombs into wills, for the probate to be picked up later down the line.”
Philip Anthony Hatton said: “When my mother died last year, my brother and I were the executors of her will. We registered her death and the registrar suggested that we could handle the probate ourselves, as we had a good record of the accounts and assets. I did this and it went very smoothly. It turned out to be very good advice.”
Dr Elaine Arnold said: “I agree. I did the probate for both of my parents’ estates -of around the same sort of value as above. It is really not much more difficult than doing tax forms and you can get help/info on-line. The biggest work is just finding all the papers/documents if your relative wasn’t so organised in their later life – and solicitors can’t help with that.”
Michael T said: “October in each year is Free Wills Month. Participating solicitors will draw up a simple will free of charge. The idea of a solicitor doing something for nothing might cause some people to raise an eyebrow. But I am sure that there they are all acting entirely altruistically. However, there is little money for solicitors in drawing up the Will. The real money is in probate. I wonder how many solicitors participating in Free Wills Month suggest to the client that the firm of solicitors might be the executor of the Will.”
I remain surprised at how many intelligent people appoint the solicitor as the executor. This is despite well-publicised reports of the fees that are charged by solicitors and the difficulty in removing them or challenging those fees.
Many solicitors charge by time, often in 6 minute blocks of time. So if the beneficiaries phone them up, this is likely to be logged. It is not difficult to see how fees of thousands of pounds could be racked up.
So the answer is simple. Do not appoint the solicitor as the executor. Appoint some trusted individuals and they can, if they so choose, hire and fire a solicitor. They might also find that they can carry out many tasks themselves.
Peter Levinger said: “One issue I have witnessed is that on many occasions a Client appoints a Solicitor because they have a personal relationship. On the Clients death the Probate is passed to the firms Private Client Department and the actual Executor ends up charging hourly fees for “rubber stamping “ other people’s work in their own firm”
Andrew Rossiter said: “The very definition of Racketeering”
EnglishRose said: “Don’t appoint the solicitor and I write that as a solicitor. When he died my father had unbilled solicitors’ work and it was very hard to disprove. I cannot believe how bad some firms are.”
The final word goes to Peter Wright who stated: “97% of solicitors give the rest a bad name.”
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