How to deal with an estate as an executor during the pandemic
In recent years there has been an increase in the number of claims brought against executors by beneficiaries. The continuing challenge and increased financial hardship resulting from the coronavirus pandemic have only increased the pressure on executors, making it more vital than ever that executors understand their duties and obligations to avoid claims.
In this article Kat King, a Chartered Legal Executive in our Private Client Department, sets out what is required of executors, and how to ensure they carry out their obligations to the best of their ability while lockdown restrictions and social distancing measures are in effect.
Act promptly and with reasonable care
Social distancing restrictions and other restrictions brought about by the pandemic make it more challenging for executors to carry out their duties in a timely fashion. However, it is vital that you endeavour to do so. As an executor, you are legally obliged to meet any deadlines, such as the payment of taxes (for example, the Inheritance Tax).
As Executor, you must also keep in mind that many institutions are still experiencing significant delays as a result of the pandemic, including HM Revenue & Customs and the Probate Registry. Any deadlines must be kept regardless of any delays caused by the financial institutions.
Take action to protect and maximise the value of the estate
One of the main duties of an executor is to protect the estate and maximise its worth for the beneficiaries. There are several things you may wish to do to make sure you comply with this duty, even while coronavirus restrictions are in place. For example, you should ensure any property forming part of the estate is secure, any valuables are removed from the unoccupied buildings, and the insurers are notified the property is now empty.
Stay in regular contact with beneficiaries of the estate
Under ‘usual’ circumstances a beneficiary may be feeling emotional and anxious after the loss of a loved one. Add to this the economic uncertainty created by the pandemic and this may also mean that beneficiaries are more worried about the value of any property or investments in the estate. By staying in regular contact with the beneficiaries you can help to alleviate these fears and keep them informed about the performance of the estate assets.
Use experts
As mentioned above, one of the main duties of an executor is to maximise the value of the estate for the beneficiaries. This may be more challenging as a result of COVID-19 especially as some investments may have fallen in value. However, this does not protect you from criticism from beneficiaries if you fail to endeavour to maximise the estate assets.
You may wish to seek professional advice from an experienced financial advisor to ensure you are minimising any losses, and to help keep accounts and records up to date.
How should I deal with any difficulties from the beneficiaries?
Sadly, even when you endeavour to carry out your duties as executor to the best of your ability, you may face criticism from the beneficiaries. The best way to deal with any difficulty is direct action. Take steps as soon as possible to mitigate the situation or contact an experienced lawyer for advice.
Can I be sued?
Yes. There is a possibility of being sued by the beneficiaries if they did not receive what they should have. Additionally, you may be sued or penalties may be imposed by creditors if the debts were not repaid, by HM Revenue & Customs if you did not pay the correct taxes, and by anyone else who suffered a loss as a result of your actions.
As you can see, acting as an executor is not an easy task and, therefore, should not be taken on lightly. If you are unsure as to what to do or what the correct procedures are, please seek professional advice to ensure you protect yourself from any potential legal action. Speak to a member of our Estate Administration team for support and to discuss your options today on 01225 750000 or email kat.king@mogersdrewett.com.