Acting as an Administrator or an Executor of an estate is an onerous responsibility. If you start to intermeddle with an estate by assuming the role of an Administrator or Executor you will become personally liable should anything go wrong. Some of the pitfalls:
- In an insolvent estate, where the debts are higher than the assets; paying off the debts by the wrong amount or in the wrong order.
- Not applying for the Grant of Probate at the appropriate time. If Inheritance Tax is payable; the first instalment should be paid within 6 months of the date of death to avoid interest becoming due.
- Not paying specific cash gifts within 1 year of the date of death. Late interest is payable to the beneficiaries after that date.
- Failing to prepare estate accounts. As an Executor or Administrator, you have a duty to prepare accounts showing what happened to the estate after the date of death which will need to be approved by the residuary beneficiaries.
- Failing to collect in all the assets and failure to pay off the debts of the deceased. You have a duty to make full enquiries. In certain cases, where you have chosen not to advertise, you may become liable for debts which may only come to your attention after you have distributed the estate.
- In an intestacy, that is in the case of someone not leaving a will, failing to appreciate who may be entitled to a share of the estate.
- Not realising that you need to obtain a Grant of Probate or Letters of Administration. It may be more costly and complicated to deal with the estate in future.