The topic of the duties of executors and administrators of estate is broad and a detailed exploration of the duties or how they apply to a specific estate is beyond the scope of this website.
The information on these pages is a brief overview of the main duties and matters that executors should be aware of when administering estates.
What duties exist before a grant of probate is obtained?
Unless there has been dealings with the administration of the estate (known as intermeddling) there is generally no obligation on a representative to the estate or anyone with an interest in the estate until a grant is obtained.
The process of obtaining a grant is beyond the scope of this website.
What duties exist after a grant of probate is obtained?
In broad terms executors’ duties are to identify and gather the assets in the estate and to administer the estate. The duties owed are owed creditors of the estate as well as beneficiaries.
When exercising their powers to administer the estate the executors must exercise reasonable care and skill
The steps required to administer an estate will be specific to each individual estate but will include paying debts and realising the estate assets or distributing the assets as appropriate. Ordinarily paying the estate’s debts will take priority over distributions. Debts should be paid diligently and delay could lead to the executors becoming personally liable.
If the estate is owed money then reasonable steps should be taken to recover those debts provided that the debts are sufficiently likely to be recovered. Executors will need to act promptly as they can be exposed to a risk of personal liability if they fail to take appropriate steps quickly enough and a debt cannot be recovered as a result.
If there are assets required be sold (for example a house, car or shares) there is a potential for the executors to incur a liability if there is a delay in doing this and the value of the assets falls.
If there are funds in an estate which cannot be distributed promptly the executors will have a duty to consider investing the funds for the benefit or the beneficiaries and this must be done as prudently as possible. Once invested the executors must review the invested funds periodically so see if better alternative investment arrangements could be made. Usually, it is appropriate for an executor to take and follow professional advice on investment.
What are the risks of acting as an executor?
If an executor does not properly administer an estate this can give rise to a claim against them personally by creditors of the deceased or beneficiaries.
If an executor acts in a way that causes a loss to the estate this is known as ‘devastat’ or wasting of assets.
Claims can arise from a variety of circumstances but are usually based on circumstances were:
- Estate funds are distributed without reserving sufficient funds for estate liabilities; or
- Estate funds or assets are distributed to parties who are not entitled to receive them; or
- There is negligent investment of estate funds or estate assets are realised for less than should have been achieved; or
- executors have taken or used estate assets for their own purposes without obtaining the consents of affected parties or Court permission as required.
- Delay in administration of the estate causing loss to beneficiaries has caused by:5.1 estate assets becoming devalued over time; or
5.2 an investment opportunity being missed; or
5.3 debts becoming irrecoverable.
It is possible that even if there is no loss to the estate a transaction by an executor in breach of duty may still be set aside by the Court.
The usual remedy granted by the Court if there has been a breach of duty is that the executor must personally compensate for the damage caused by the breach or account to the estate for any profit they have made.
When do executors have to distribute the estate?
This should be done as soon as reasonably possible but an executor cannot be required to distribute the estate less than a year from the date of death. Any retentions in the estate after that time will may require the executor to justify why distributions are not being made.
Not all estate liabilities may be clear straight away. For example, a claim for provision against the estate from a spouse, civil partner or dependent can be brought within 6 months after the grant of probate is obtained. For information on these types of claims please see these notes.
Before distributing from the estate it is prudent for the executors to protect themselves from any claims they have distributed the estate prematurely by advertising proposed distributions in the London Gazette and relevant local newspapers in accordance with the Trustee Act 1925.
What if the deceased operated a business?
Appointed executors can carry on the deceased’s business if the will specifically provides for them to do so.
If the will does not provide for this then it may or may not be appropriate to carry on the business. By far the safest approach for executors is to agree an approach with all beneficiaries, or, if this is not possible by asking the Court for directions how to proceed.
When should an executor apply for directions to the Court?
If an executor is uncertain how to proceed with the administration of an estate an application can be made to the Court for guidance and directions.
Directions from the Court will protect the executor from claims relating to the course of action taken provided that the directions given by the Court are based on full and frank disclosure of all relevant matters to the Court by the executors.
Usually, applications are appropriate if it is not clear whether distributions can be made or whether an apparent creditor should be paid.
It would also be appropriate to make an application if there is uncertainty how to interpret the will or where the executor proposes to purchase an asset out of the estate.
All executors and any beneficiaries, creditors or interested parties should also be joined into the application as appropriate depending on the reason for the application.
If the application relates to a beneficiary who is a child the Court will require input into the application from a solicitor or barrister representing to the Court what is in the child’s interests.