How to deal with an estate as an executor, during the coronavirus pandemic
Adjusting to the challenges caused by coronavirus has been difficult for all of us. However, for those dealing with the death of a loved one, the onerous obligations placed on executors may seem overwhelming.
In recent years there has been an increase in the number of claims brought against executors by beneficiaries. Coupled with increased financial hardship as a result of the coronavirus pandemic, it is vital that executors understand their duties and obligations to avoid claims. In this article we set out what is required of executors, and how to ensure you carry out your obligations to the best of your ability whilst lockdown restrictions and social distancing measures are in effect.
You must act promptly and with reasonable care.
Social distancing restrictions and other priorities 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 for payment of taxes.
You must also keep in mind that many institutions are experiencing significant delays as a result of the pandemic, including HMRC and the Courts. You should ensure you have adequate time to meet these deadlines.
It is worth considering appointing an Attorney such as another relative or a trusted friend if you are a vulnerable person and are shielding. Alternatively, you have the option to instruct a solicitor to administer the estate on your behalf which will help alleviate the burden and ensure that the estate is administered correctly and in a timely way.
You must 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. You should ensure that any property forming part of the estate is secure, including removing valuables from any unoccupied buildings and notifying insurers that the property is now empty.
You must stay in regular contact with beneficiaries of the estate.
In this confusing and stressful era, beneficiaries may be feeling anxious about the estate. The fear of financial difficulty, combined with concerns about the economy, may also mean that beneficiaries are worried about the value of any property or investments of the estate. By staying in regular contact with beneficiaries you will alleviate these fears and keep them informed about the performance of the estate assets.
If the deceased owned shares and/or property you need to be aware of the values if a decision is made to sell the assets. Due to the Coronavirus share prices have fallen considerably and Executors should check with beneficiaries before authorising the sale to make sure they are in agreement with the proposed sale price which may be far less than the probate value.
You may also wish to seek professional advice from an experienced financial advisor, to ensure that you are minimising any losses.
If shares have been sold at a loss within one year of the date of death and inheritance tax was payable from the estate, a claim can be made to HMRC to claim “loss on sale relief” and recover the inheritance tax paid on the probate value.
It is also essential that you keep accounts and records up to date. This may be more challenging as a result of COVID-19, however, this does not protect you from criticism from beneficiaries if you fail to do so. You must also be responsive when beneficiaries request accounts or information.
How should I deal with difficulty from beneficiaries?
Sadly, even when you endeavour to carry out your duties as executor to the best of your ability, you may face criticism from 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.
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The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.