This is a general summary overview of your Role and Duties as an Executor in respect of the administration of the Estate which may be of assistance to you and answer some questions you may have regarding your role.
Your function as an Executor (also called a Legal Personal Representative) is to extract a Grant of Probate to the Estate and to administer the Estate of the deceased.
As Executor your powers and duties date from the date of death of the deceased.
From the date of death the whole Estate devolves or passes to you as Executor. You have very wide powers under general law, apart from any powers given to you under the Will.
Personal Representatives are legally obliged to distribute the Estate of the deceased as soon after death as is reasonably practicable having regard to the nature and the extent of the Estate. However, no action can be taken against an Executor for their failure to do so before the expiration of one year after death (referred to as the Executor’s Year). However, if money is due to any creditor of the Estate, such as Revenue, they can bring proceedings against the Executor without waiting for the expiration of the year as aforesaid.
The duties of an Executor last for life, therefore your obligations as Executor are ongoing.
The following is a simple set of guidelines on the powers and duties of Executors. It is, necessarily, set in very brief and summary form but it is hoped that it will be of assistance to you.
We shall be guiding and advising you in all matters in relation to the administration of the Estate and we will be undertaking all your tasks which we are able to undertake and as per our Letter of Engagement.
We will, of course, be instructing you in all those duties or tasks which you alone can perform and likewise we will fully explain all documents and Declarations which you are required to sign during the course of the administration.
DUTIES OF AN EXECUTOR
INITIAL ARRANGEMENTS FOLLOWING THE DEATH.
The first duty of an Executor is the disposal of the deceased’s body of which the Executor has custody until burial or cremation. Effect should be given to any wishes of the deceased as to the disposal of his or her body (although these are not legally binding). The deceased should be buried in a manner suitable to the Estate, which he or she leaves behind him or her. In practise all of this will have already been arranged and dealt with by the deceased’s family, namely yourselves.
VALUATION AND PROTECTION OF ASSETS.
The next duty is to ascertain the precise value and extent of all of the deceased’s assets. Generally once a bank or financial institution is notified of a death the accounts or investments are automatically frozen and no further activity can take place in relation to the accounts. An Executor may also sell or otherwise dispose of, at his or her discretion, the goods and assets of the Testator before the Grant of Probate issues but this would only really be limited to such matters, if appropriate, as household goods, car or other personal effects. However, certainly in relation to assets such as land or stocks and shares it would be difficult to do so without the Grant of Probate and, in practice, sales of assets will usually only occur after the Grant of Probate issues. The Executor must ensure that the assets of the Estate are properly protected. It follows that there is a duty to insure with a reputable insurance company all assets normally requiring insurance, such as a house or land or other valuable items such as jewellery, house contents, car, etc.
ASCERTAIN LIABILITIES AND BENEFICIARIES.
An Executor must ascertain all outstanding debts, taxes etc. and check that there are no claims outstanding against the Estate. All of the beneficiaries must also be ascertained. An Executor must make enquiries of all beneficiaries in relation to prior gifts or inheritances received by them, where appropriate, and, again, where appropriate to obtain details of the Personal Public Service (PPS) number for each beneficiary. Quite often it will also be necessary for an Executor at this stage to open an Executor’s Bank account, usually with the same bank where the deceased was a customer. This is so all the funds received during the course of the administration can be lodged to the one account. Usually a cheque book is requested so that cheques can be written on the account when the need arises. If necessary, an Executor can also apply for an overdraft facility on the account, should one be required, if there are any urgent debts or bills that have to be paid before the Grant of Probate to the Estate issues and the funds in all of the deceased’s accounts are gathered in.
INLAND REVENUE AFFIDAVIT.
When all enquiries have been made (and these can be numerous and complex) a schedule or list of all the assets and liabilities of the deceased must be prepared. This is an official document known as an Inland Revenue Affidavit and has to be sworn by the Executor along with several other relevant documents and declarations.
EXTRACT RELEVANT GRANT AND COLLECT ASSETS.
When all the relevant papers have been lodged and the relevant Probate and/or tax offices, the Grant of Probate subsequently issues within a period of several weeks. The Executor is then in a position to collect in all the deceased’s assets. It is, at this stage, that assets not being specifically given to named beneficiaries will be sold or retained as appropriate.
PAY EXPENSES AND DEBTS OF THE ESTATE AND DEAL WITH TAXATION MATTERS.
The Executor is obliged to pay the funeral expenses and all other outstanding debts of the deceased. Generally, the funeral bill is the first item paid as it is the only debt that a bank or other financial institution will release funds from a frozen account for. Any other outstanding debts or costs must be paid and discharged at this stage. The Executor is then required to distribute the assets to those entitled, while ensuring that taxes are paid. These taxes include all taxes due by the deceased prior to his or her death, all taxes arising out of the administration of the Estate itself and possibly inheritance tax or capital gains tax arising out of the distribution of the assets to the beneficiaries, depending on the circumstances of the case. In certain circumstances it will be necessary for the beneficiaries themselves to file inheritance tax returns. In general, it will be necessary to make sure that all of the pre-death taxes and Estate taxes and, where appropriate, inheritance tax, are paid and discharged and clearance, where appropriate, obtained from the Revenue Commissioners before the Estate is finally distributed.
Finally, the Executor must furnish an administration account wherein he or she accounts for all monies received and all monies distributed during the administration period and a copy of the administration account is sent to any relevant beneficiaries. It is important that accounts are kept of all income and expenditure and any Executors Account Statements furnished to us as and when received clearly itemising the activity on the account so as to facilitate the expeditious preparation of the
DUTY FOR LIFE.
Duties of the Personal Representative are for life. For example, if any assets are discovered after the distribution of the Estate is complete, it is the duty of the Personal Representative to dispose of that asset as per the Will or on Intestacy as appropriate and deal with any associated tax issues arising therefrom.
RELEVANT POINTS FOR EXECUTORS (FREQUENTLY ASKED QUESTIONS).
The following points are of relevance to Executors and are mentioned here as they are the most frequently raised queries asked:
- There is no obligation on an Executor to act in relation to the administration of the Estate. An Executor has a choice to accept, reserve or renounce their executorship. You should note that once you accept your appointment as an Executor, once the Grant of Probate issues, you cannot then turn back and decide not to act without the consent of the High Court. By reserving your right to act, you will stand aside from the administration of the Estate and will not be actively involved in same but if the need arises you can come back into the administration at a later date and apply to the High Court for a Grant of Probate to issue in your own name. This will involve a fresh application to the Probate Office.By renouncing your right to act you will permanently stand aside from the administration of the Estate and will not be allowed to become involved in the Estate in any way, as Executor, at any point in the future.
- The general rule is that an Executor sufficiently discharges his/her duty where he or she takes all precautions which an ordinary prudent person would take in managing similar affairs of his or her own. The office is a personal one, the Testator having chosen the Executor for trustworthiness purposes.
- An Executor may not delegate his/her authority but he/she may need to employ other persons, experts in their own field, to help in the administration of the Estate such as Accountants or tax advisers.
- The office of Executor is gratuitous, i.e. the Executor is not entitled to receive fees or to profit from carrying out the duty of Executor. However, neither should the Executor incur a loss, so all expenses properly incurred during the administration period are recoverable by the Executor.
- There is no obligation on an Executor to give a copy of the Will to anyone before it is admitted to Probate, or to inform a beneficiary of his interest. If required, an Executor must give any information to a beneficiary in relation to his interest in the Estate, and in the normal course he will do so in any event. However, it should be noted that once the Will is “proved” (i.e. admitted to Probate) and the Grant of Probate issues, a copy of the Will is contained in the Grant of Proabte and the Will becomes a document of public record, of which anyone is entitled to inspect and obtain a copy.
For further information contact Helen McGrath, Partner :