17 July 2020
There are two main ways you become a Personal Representative (PR):
1. If you agree to be someone’s Executor under their Will.
2. If someone dies without a Will (intestate) and you are a family member.
The PRs are responsible for paying the inheritance to the beneficiaries. Sometimes PRs inherit too, for example if the deceased died intestate and you are a family member. If you are an executor appointed under a will, the deceased may have left you a gift to say thank you, but this is not always the case.
It may be that you are only entitled to recover your out-of-pocket expenses. The PRs often have to cover expenses (such as the cost of death certificates) in the short term, until some of the estate assets (such as bank accounts) are accessible. The PRs should be reimbursed for these costs, so it is important to keep records of how much you have spent. The costs of covering the wake expenses, probate application fee etc. can mount up.
Acting as a PR is a demanding and time consuming responsibility. It usually takes at least six months to administer an estate but it can take much longer if there are complications. This is often the case if there is a property that is difficult to sell, foreign assets, shareholdings or many people due to inherit.
It can be stressful and frustrating for PRs to communicate with impatient beneficiaries (people who inherit under the will or intestacy law) particularly if they do not know them well. You will have to understand the will or intestacy law thoroughly and may have to organise a number of payments to dozens of beneficiaries, in the UK or abroad.
However, a crucial point to bear in mind when deciding if you are willing to act as a PR is that you are personally liable for any mistakes you make.
Example 1.
You agree to act as PR. You miscalculate the inheritance tax. You submit the application to HM Revenue & Customs and then pay the cash to the beneficiaries as per the instructions in the will. HMRC months later come back to you and explain that on further consideration they disagree with your calculation and £25,000 is due in tax. You no longer have any estate funds. The beneficiaries won’t return the cash they’ve received. They stop answering your calls and emails. HMRC will seek the funds from you personally.
Example 2.
You agree to act as PR. You misunderstand the will. It’s complicated and written in old-fashioned language. You pay Sally Aldridge £50,000 believing that’s what the will instructs you to do. In fact, the gift is for Mary Aldridge. Sally says she can't return the cash as she's already spent it. Mary finds a copy of the will online and realises that she was supposed to inherit. Mary instructs lawyers to sue you for the £50,000 she should have received.
These situations may sound extraordinary but they are based on real-life examples. This is why it is often a good idea to seek professional help in administering an estate.
You are personally liable for mistakes but legal advice can be paid for by the Estate if you choose to take it.
As a PR you can instruct a specialist lawyer to help you. It makes sense to protect yourself by having an experienced solicitor help you with complex situations in which you may understandably feel out of your depth. The legal costs are actually payable from the Estate funds (not by you personally). Lawyers understand that their accounts cannot be paid by the estate until funds are available and are unlikely to ask you to settle their bills up-front.
When you appoint someone as your executor you should consider carefully whether you feel comfortable for them to take on the risk. If not, you can suggest that when the time comes they may wish to get professional help.
Alternatively you may wish to appoint professionals as your executors in the first place. Whilst professional executors do charge for their time (often at an hourly rate) this can work out less expensive than having professionals appointed alongside or by an inexperienced friend or family member. You can find out more about how this firm charges by clicking here.
If you would like assistance in applying for probate or a grant of letters of administration please contact our Wills, Trust and Probate lawyers based at our Bournemouth and Christchurch offices for a quote.
Please note, this is not legal advice. It is intended to provide information of general interest about current legal issues.
