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Common probate mistakes and how to avoid them
- AuthorSharon Richardson
If you are someone’s executor, then it can be tempting to try to administer the estate yourself with a view to saving money. If the estate is simple and you are comfortable with the legal and tax regulations, then this may be straightforward.
However, executors are personally liable to the beneficiaries and to HMRC in regard to inheritance tax, so it is important to be aware of the pitfalls.
Sharon Richardson, Head of the Private Client team at Crombie Wilkinson Solicitors, sheds a light on some of the mistakes which she has seen people make over the years albeit with the best intentions.
Failing to use the correct Will
Before starting the estate administration process, you must ensure that you have the deceased’s most recent valid Will.
It may be that they told you exactly where to find this but, if not, you must locate the original. If the deceased has changed their Will several times, they could have copies of several different Wills with their paperwork. If you administer the estate according to old Will terms, you may end up giving assets or money to the wrong people, which risks leaving the actual intended beneficiaries out of pocket and finding yourself liable for their loss.
If you are unsure which is the correct Will, a solicitor can help you determine this. A solicitor can also confirm the validity of the Will and advise you on searches you could undertake to ensure there is not a more recent valid Will of which you are unaware.
An invalid Will
As executor, it is your job to ascertain the overall validity of the Will. If the Will has not been signed or properly witnessed it will not be valid, and an earlier Will should be found and administered instead.
There are other reasons why a Will may be invalid, including if there are doubts regarding lack of capacity or undue influence, changing status with marriage or divorce. In some cases, part of a Will may be valid whilst other parts may not.
Failure to locate all beneficiaries
Some Wills leave gifts to members of a class. This means that the beneficiaries are not individually named. It will, therefore, be up to you, as executor, to locate all the class members. This may involve making enquiries with known beneficiaries and family members and will extend to taking all reasonable steps to ascertain all of the beneficiaries. If you fail to take all reasonable steps and a disappointed beneficiary later comes forward, you would be personally liable for their loss.
A solicitor can help you to determine what counts as ‘all reasonable steps’ in the circumstances.
Failure to follow the Will terms
It is important that you follow the terms of the Will exactly, but mistakes in this regard are very common.
You must deal with all the gifts and trusts according to the instructions in the Will, and possibly also a letter of wishes. For example, there may be limitations on when and to whom money can be paid. Sometimes, part of a Will may seem like a straightforward gift, but in fact it may be a trust. While a solicitor is trained to spot this, the difference is subtle and may not be noticed otherwise.
Whilst there are circumstances under which the terms of a Will can be altered, this must be done using formal legal procedures. It is not simply up to an executor to change a testator’s wishes after death, and you should consult a solicitor if you think this is necessary.
Failure to keep estate funds separate
Too often executors place monies that have been collected in from the estate in their personal bank account. While this is usually only done temporarily and without any malice, it does amount to a breach of executors’ duties. Opening an executors’ bank account is a simple process and this should be done before any estate assets are collected.
Failure to collect all the assets
Sometimes small sums can be held in accounts that the testator may have forgotten, but as executor it is your duty to track down these accounts and make sure that the sums are claimed and distributed to the beneficiaries.
It can also be tricky to track down some digital accounts if you cannot find login details. Although financial institutions should have clear processes, they are not always straightforward to follow if you do not have all the necessary information.
Another very common mistake made by executors is failing to obtain accurate and up-to-date valuations. Outdated or estimated valuations can affect the value of the estate and mean beneficiaries may miss out. Valuation mistakes may also affect the inheritance tax that is paid which could result in you, as executor, being personally liable for an underpayment.
If you are the executor of an estate, it is imperative that you understand your duties before you commence the estate administration. Whether you require some initial guidance or would like a professional to deal with the entire process on your behalf, our solicitors can help you ensure that you do not fall foul of some of the most common probate mistakes.
For further information, please contact a legal advisor in our Wills and Probate team at any of our offices – York, Selby, Malton and Pickering.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.