In the second of a series of articles AMD solicitors discuss the pitfalls of DIY probate. In this instalment Sarah Burgess, a Solicitor dealing with contentious and non-contentious probate, highlights some of the issues she has come across.
There have been many occasions when an executor of a Will has come to our firm for advice after beginning to administer an estate, but things haven’t gone according to plan. Our job is to help the executors progress the estate efficiently whilst keeping the beneficiaries well-informed so that the executors themselves do not become personally liable for causing loss to the estate.
The legal costs involved in resolving a dispute or rectifying any errors will often far outweigh the initial costs of seeking professional legal advice regarding the estate administration.
If you find yourself named as an executor in a Will, you should be aware of the most common pitfalls to avoid:
1. Not placing Trustee Notices
It is a good idea to place Trustee Act notices in the newspaper because these advertise for any creditors to come forward within two months of the notices being placed and protect executors from becoming personally liable to creditors who come forward after the estate has been distributed.
2. Distributing the estate too soon and over distributing to beneficiaries
This mistake is quite common, especially as beneficiaries often put pressure on executors to finalise estates quickly. However, there is a legal process that needs to be followed which takes time.
You do not want to be in the very awkward position of having to try and claim money back from a beneficiary who may have already spent it! A recent and catastrophic example of an executor distributing the estate too soon can be seen in Harris as PR of Helena Norma McDonald v HMRC where the executor submitted an inheritance tax account to HMRC but before receiving tax clearance from them, he distributed the estate to the beneficiary because the beneficiary had agreed to pay any tax due.
However, the beneficiary has since absconded to Barbados and because the law says that it is the personal representatives who are liable for any inheritance tax due on a deceased person’s estate, the court has ruled that Mr Harris now has to make the payment of £341,278 to HMRC.
Executors could also face fines and penalties from HMRC if they do not pay the inheritance tax due for an estate on time or are found to have submitted an inaccurate account through negligence.
For advice on wills, inheritance tax, lasting powers of attorney, administration of estates and all other private client issues, please contact Sarah Burgess or one of our specialist probate solicitors in Bristol on 0117 962 1205, email firstname.lastname@example.org or call into one of our four Bristol offices.
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