Creating a comprehensive will is a crucial part of your financial planning. Within this legally binding document, you can lay out exactly what you would like to happen to your wealth when you pass away.
When you create your will, you’ll need to name your executor(s), the person or people who will be responsible for carrying out the wishes you’ve set out.
Arguably, choosing an executor is one of the most important parts of estate planning. You need to choose someone who can understand and conduct the duties that come with the role.
As a result, it’s worth being aware of what an executor needs to do, allowing you to choose individuals who you are confident will correctly perform the necessary tasks in the position.
Equally, your parents or another relative may name you the executor of their will, meaning you’ll have to carry out these responsibilities at some point in the future, too. In this case, knowing what the role entails ahead of time can help you do so correctly.
So, find out what’s actually involved in being an executor, both to help you choose the right people for your will, and prepare yourself if you’re in line to have this responsibility in future.
Registering the death and checking the will
When someone dies, you have to register the death in the UK and get a death certificate. This doesn’t have to be done by the executor, and could be registered by any relative.
Usually, it only takes a few days to get a death certificate. It can also be sensible to get multiple copies of the certificate, as you may need them when handling other aspects of a death, and it tends to be more expensive to request copies later than it is to do when you first apply.
Once this is done and you have the death certificate, the executor needs to find and check the most up-to-date version of the will. You’ll need to properly read what’s included and make sure you fully understand all the wishes contained within it.
It’s often a good idea to make copies of the will and keep the original safe somewhere. This ensures that it isn’t damaged or destroyed, which could make everything far more complicated in the long run.
Arranging a funeral
Many people now leave instructions for their funeral in their will, helping take away administration and decisions to make for their loved ones.
They may also leave specific funds earmarked to settle these costs, as funeral bills can easily run into multiple thousands – SunLife measured the average cost of a funeral in 2022 to be £3,953.
The executor will be responsible for arranging the funeral. You’ll need to follow the instructions if there are any in the will, or decide on what to do for it if there are no notes left for you. You’ll also need to pay for it, although you can ask the funeral home to attach the bill to the estate directly.
Valuing the estate
The next big responsibility for an executor is calculating the value of the deceased’s estate – that is, their property, money, and possessions.
You’ll need to calculate the total value of all these aspects of an individual’s wealth, and then subtract debts such as mortgages, loans, and bills.
At this stage, it’s worth checking for details of any gifts given. Gifts can fall outside the value of an estate provided that they meet certain criteria, so it’s important that you check for any details of these.
There are various financial aspects that executors are responsible for when someone passes away. This includes:
- Stopping any salary, pensions, or state benefits from being paid
- Requesting information about debts, and settling any outstanding tax, debts, or bills
- Sending a copy of the death certificate to banks and building societies, especially if the deceased has any joint accounts
- Contacting and sending a death certificate to any pension providers, to check whether any benefits are payable to beneficiaries
- Contacting the insurance company if there is a life insurance policy in place to find out what needs to happen to this payout.
The government’s “Tell Us Once” service can be useful, allowing you to inform all government organisations about the death at once.
You may also want to consider opening a specific executor’s account with a bank, to prevent your money getting mixed up with the deceased’s.
Paying Inheritance Tax
With the estate calculated, this is the point at which the executor will need to work out whether Inheritance Tax (IHT) is due.
This is potentially the most complicated step that executors have to deal with, and it’s crucial to do it correctly. Otherwise, the bill may have to be settled later, and this can cause difficulty if the rest of the estate has been distributed to the beneficiaries.
It may be worth seeking professional tax advice to help you navigate IHT, as it can be notoriously complex.
Applying for probate
Only once any IHT is settled can you apply for probate, which is the legal right to deal with the deceased’s estate. If there are executors named in the will, it is their responsibility to apply for probate.
The government website states that you will usually receive the “grant of probate” within 16 weeks of having submitted the application. This means you can start administering the estate.
You may not need to apply for probate if the estate is particularly small.
Distributing any inheritance to the beneficiaries
The final responsibility as executor is to divide and distribute the leftover inheritance to the beneficiaries named in the will.
You’ll need to draw up “estate accounts” for each beneficiary, showing what and how much they are entitled to.
It can be sensible to wait for a period before distributing an inheritance, as claims for debts or tax could be made. As a result, it may be worth waiting for up to 10 months after probate is granted to carry out this final step.
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This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.