From Will to Distribution: What an Executor Must Do

practical guidance · Private Client · England & Wales

close up of mans hands holding documents on a desk with keys next to them.

Few people actively choose to become an executor. Their name may have been placed in a will years earlier, possibly without being asked. The significance of that decision often becomes clear only in the fortnight after a funeral.

An executor is not simply the person who hands out an inheritance. It is a legal office carrying real responsibilities. The work is normally unpaid unless the will provides otherwise, and an executor who makes a serious mistake may be personally liable for the consequences.

That can sound daunting, but the role has a beginning, a sequence and an end. The key is to deal with the estate in the correct order.

This article covers the law in England and Wales. Scotland uses a separate process known as confirmation, while Northern Ireland has its own probate rules.

The first task is to establish what exists

Before applying for probate or making promises to beneficiaries, the executor needs to understand the estate.

This means identifying everything the deceased owned. Property, bank accounts, possessions, investments, pensions and insurance payouts may all need to be considered. The executor must also identify outstanding debts, including mortgages, loans, credit cards and household bills.

The figures used should reflect the open-market value of each asset on the date of death. The GOV.UK guide to valuing an estate explains the information that must be gathered.

Not every asset necessarily forms part of the estate.

A home owned as joint tenants passes to the surviving owner. Nominated pension benefits and insurance policies written in trust will usually pass directly to the named person. A share of property owned as tenants in common does not pass automatically and remains part of the estate.

Written valuations should be obtained and retained. Trying to reconstruct them months later can create unnecessary difficulty. The same figures will be needed for the inheritance-tax calculation, the probate application and the estate accounts eventually provided to the beneficiaries.

The tax deadline does not wait for probate

One of the less obvious features of estate administration is that inheritance tax may need attention before the executor has full authority to access the estate.

Inheritance tax must be paid by the end of the sixth month after the person died. Interest is charged after that date. Where tax is due, the value of the estate must also be reported to HM Revenue & Customs within one year of the death.

The inheritance-tax threshold is £325,000, and the standard rate above the available threshold is 40 per cent. Important reliefs may apply, including transfers between spouses and civil partners and the additional allowance that may be available when a home passes to children or grandchildren.

The official guidance explains both the general inheritance-tax rules and the allowance relating to passing on a home.

The practical problem is that the executor may have a tax bill before being able to access the deceased’s money.

Possible solutions include using the direct payment scheme through the deceased’s bank, paying tax by instalments on the value of property or arranging a short-term loan. The GOV.UK guidance on paying inheritance tax gives further information.

This situation is common and can usually be managed, provided it is identified early.

Probate may be necessary, but it is not automatic

Probate is the legal right to deal with the deceased’s estate.

A grant is not required in every case. If everything was jointly owned, the assets may pass directly to the surviving owner. Banks and other organisations may also release modest balances without probate, although each organisation sets its own threshold.

Where probate is required, an estate worth more than £5,000 attracts an application fee of £526. There is no fee for an estate worth £5,000 or less. Additional copies of the grant cost £2 each when ordered with the application.

Executors named in a valid will apply for a grant of probate. If there is no will, or no executor is able to act, the closest relative applies for letters of administration instead.

The GOV.UK guidance on applying for probate advises against making financial plans or putting a property on the market before the grant has been issued.

Executors should also prepare for the process to take months rather than weeks.

Why beneficiaries cannot be paid first

An executor may face understandable pressure from beneficiaries who want to know when they will receive their inheritance. Legally, however, beneficiaries come at the end of the payment order.

The executor must first settle the estate’s debts, funeral expenses and tax liabilities. Distributing money too soon, only to discover an unpaid creditor later, can leave the executor personally exposed.

If there is uncertainty about unknown creditors, executors commonly publish a statutory notice in The Gazette and wait for the prescribed period before distributing the estate.

An estate that cannot meet all its debts is insolvent. A statutory order of payment then applies. This is not a situation in which the executor should decide for themselves who gets paid. Professional advice should be obtained.

Distribution is more than writing cheques

Once the debts, expenses and taxes have been settled, the remaining estate can be distributed according to the will.

If there is no valid will, the estate must be divided under the intestacy rules.

The work may include selling or transferring property, closing accounts and paying specific legacies. Further practical guidance appears in the GOV.UK information on dealing with an estate.

Throughout the administration, the executor should keep a clear record of money and property coming into the estate and every payment made from it. Final estate accounts should show everything received, everything paid out and the amount or assets passed to each beneficiary.

Beneficiaries are entitled to know how the estate has been handled. Proper accounts provide that explanation and can prevent disagreements from developing into disputes.

The final payment may still need to wait

Completing the administrative work does not necessarily mean that the estate should be distributed immediately.

A claim under the Inheritance (Provision for Family and Dependants) Act 1975 will usually need to be brought within six months of the grant. A separate challenge may also be made against the validity of the will.

Distributing the estate very quickly, before that six-month period has ended, is a recognised risk. Executors must consider the possibility of claims even when the main work appears to be complete.

Can you decide not to be an executor?

A person who has been named as an executor can refuse the role, but timing matters.

If they have not started administering the estate, they may formally renounce. If they do not want to take an active role but are willing for the other executors to proceed, they can instead have power reserved to them.

Once an executor has begun administering the estate, withdrawing is much more difficult.

Accepting the appointment does not mean handling every issue alone. An executor may instruct a solicitor or probate practitioner, with the professional costs paid from the estate.

The Law Society of England and Wales provides a public solicitor-search service. Citizens Advice also offers free information about dealing with the financial affairs of someone who has died.

The rules are different elsewhere in the United Kingdom

The process set out above applies to England and Wales.

Scotland uses confirmation rather than probate and requires an inventory of the estate. The process is covered by the official mygov.scot guidance on confirmation.

Northern Ireland operates a separate probate system, explained in nidirect’s probate guidance.

Official sources