Pensioners > Life events > Being an executor or personal representative
Being an executor or personal representative
Wills and intestacy
What does an executor or personal representative do?
What is a beneficiary?
What is probate?
We also look at:
How do I deal with the tax affairs of an estate?
What happens if the beneficiaries decide the estate would be better divided differently? - Deeds of Variation
What happens when the estate is wound up?
If you die without making a will, we say you have died intestate. Your estate is divided up between your spouse, civil partner, family and friends in accordance with the law, which may be different from your own wishes.
- The rules for dividing up an intestate estate in Scotland are different from those in England and Wales.
- It is therefore important to make a will so that you can decide who gets what rather than leaving it to the law.
- It is usually wise to obtain legal help with drafting a will. Most solicitors will not charge you a lot for this service and you can also contact various charities such as Age Concern. Age Concern have a fact sheet on making wills and you can access it here. There is also an excellent section on the Directgov website for England and Wales. For Scotland have a look at the Scottish Government website.
- As well as making a will you can also have a 'Letter of Wishes', which will make certain requests of your executor. This type of letter is useful for giving away your personal effects and other small items, as a 'Letter of Wishes' will be treated as if it were part of your main will.
What does an executor or personal representative do?
- If you have made a will, you will have named one or more executors (also called personal representatives) in the will as the person or persons who will deal with your estate for you. This can be your solicitor or other professional person but is also quite often a member of your family or a family friend.
- If you die intestate, the person who will be dealing with your estate will be called an administrator.
- The executor or administrator has responsibility for collecting together all your assets including any debts, paying all bills still outstanding at the date of your death, paying funeral and any other post death expenses. He or she will also deal with payment of any taxes including IHT and will also obtain probate or Letters of Administration where you died intestate.
- The HMRC website has an inheritance tax customer guide which is intended to help executors and there is a very good general section on Directgov.
Back to the top
- A beneficiary is a person who you name in your will as someone who will receive assets or cash from your estate or someone who is entitled to receive assets from your estate if you die intestate.
- You can leave something specific to a beneficiary e.g. your house or you can just leave them a share of what is left after all other gifts, tax and expenses have been paid.
- If the executor pays out any income to one or more beneficiaries during the time that he is administering your estate, he will need to let them have a certificate each tax year showing the income paid and any tax deducted. The form is called an R185. The beneficiary will need to include the income each year and any tax deducted on a self-assessment tax return if one is to be completed or on any repayment claim.
Back to the top
- A Grant of Probate is simply a legal document your executor will obtain. Basically the Grant is a legal acknowledgement of your estate and the amount of the estate. It also states the names of your executors and thereby recognises their legal entitlement to deal with your estate.
Back to the top
- Firstly you need to contact HMRC so that they know about the death and with whom they will need to correspond regarding any matters arising in connection with the estate. You will normally be dealing with whichever HMRC office dealt with the tax of the person who has died. However a specialist tax office may deal with larger estates and HMRC will advise you if this is the case.
- To work out whether any IHT will be due, you may be asked you to fill in an HMRC Account. This is a summary of the assets and liabilities including funeral expenses of the person who has died.
- If any tax is due these will be payable out of estate funds.
- HMRC may ask to see the Grant of Probate.
- You will also then need to complete any self-assessment tax returns or repayment claims to the date of death.
- HMRC will check the forms and advise you as executor whether any further tax is payable or any repayment of tax is due. If the latter they may need to see some authority such as the Grant of Probate to enable them to make the repayment to you. Any repayment is treated as part of the estate.
Back to the top
- If all the beneficiaries agree, it is possible for them to vary the way an estate is paid out, or for some beneficiaries not to claim their legacies.
- If they do so within 2 years of the date of death, the variation takes effect for capital gains tax and inheritance tax purposes as if it were made at the date of death.
- If the changes result in further tax being payable, the executors must notify HMRC within 6 months of the date of the variation and send them a copy of the Deed of Variation.
- These types of Deed can be useful for paying less IHT and CGT but they have no effect for Income tax. It is necessary to say in the Deed that it is to apply for IHT and/or CGT or neither as required.
- If there are beneficiaries who are minors (i.e below age 18) it will be necessary to have a court order varying the will where the change might have an adverse effect on that beneficiary's share of the estate.
Back to the top
- Once all taxes have been paid, and all other matters relating to the estate have been settled, the executors can then transfer the estate to the beneficiaries under the terms of the will. This then winds up the estate.
Back to the top
