When considering the role of an Executor, many people underestimate the complexity and responsibilities involved in administering an estate. This oversight can lead to significant financial and emotional burdens, as illustrated in the below case study.
An Executor reached out to Kings Court Trust (KCT) for help with his sister's estate, she had died three years earlier and apart from contacting a few utility companies there had not been any progress. The estate, valued at over £1 million, included the whole of her husband's estate which she inherited three years prior to her death. This means her estate was eligible for claiming an unused Nil Rate Band (NRB). However, the Transferable Nil Rate Band (TNRB) must be claimed within two years of the individual's death, a deadline the lay (meaning not a professional) Executor was unaware of. Consequently, the estate ended up paying much more Inheritance Tax (IHT) than was necessary.
This estate highlights the knowledge which is needed when administering an estate:
- Executors often lack the specialised knowledge and do not realise the impact their actions are having on the overall value of the estate
- The risks associated with being an Executor, particularly when navigating deadlines with HMRC
- An Executor can be held liable for a mistake which has caused the estate to experience a loss
Without professional guidance, these duties can become overwhelming and error-prone.
Benefits of a Professional Executor
Having a professional Executor can mitigate these risks significantly. Professionals, like Kings Court Trust, possess the expertise to handle estate administration promptly and accurately, ensuring compliance with legal requirements and maximising financial benefits. We are well-versed in claiming allowances like TNRB, thereby minimising tax liabilities and safeguarding the estate's value.
Moreover, professional Executors can alleviate the emotional strain on grieving family members. Handling a loved one’s Estate is a daunting task, often exacerbated by the emotional weight of the loss. By entrusting these responsibilities to a professional, families can focus on healing rather than becoming entangled in the complexities of estate administration.
Conclusion
In conclusion, appointing a professional Executor is a sensible decision. It ensures the Estate is managed efficiently, legal requirements are met, and financial advantages are maximised, thereby protecting the estate’s value and easing the family’s burden during a difficult time.
