Taking on the role of executor carries real legal and financial responsibility. Many people accept the appointment without fully understanding what it involves. This article sets out the most common risks so you can go in with your eyes open.
What does an executor do?
An executor is the person named in a will who is legally responsible for administering the deceased’s estate, dealing with their personal and financial affairs after death. Where there is no valid will, or the named executors cannot or will not act, someone entitled under the intestacy rules applies to the Probate Registry instead and is appointed administrator.
Both roles require the same core work: identifying and valuing all assets, handling inheritance tax matters, settling outstanding debts, and distributing what remains to the beneficiaries. That responsibility brings exposure to risks that are both financial and legal in nature.
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Disputes with other executors
A will can name any number of executors, though a grant of probate can be issued to no more than four of them at a time (section 114 of the Senior Courts Act 1981). Where more are named, four apply for the grant and the rest have power reserved, which leaves them free to step in later. All appointed executors share equal responsibility for carrying out the deceased’s wishes. They may be relatives, friends, or professionals with no prior connection to each other. Reaching agreement on every decision is not always straightforward.
Disputes about what to do, and how to do it, are common. Often, one executor is appointed as the lead to act as the main point of contact and ensure the process runs smoothly. In practice, though, that arrangement depends on everyone’s goodwill. An executor may also be a beneficiary of the will, which can give rise to accusations of bias from other parties.
Where disagreement cannot be resolved, professional probate legal advice is often the most effective way forward.
You may want to read: Can I challenge an executor of a will?
Disputes with beneficiaries
Executors must deal with everyone who receives something under the will, and also with those whose expectations are not met. People often have complicated family circumstances, and the administration of an estate can surface long-standing tensions.
The will itself might be challenged, which creates further difficulty. The executor must continue to preserve the estate while legal proceedings run their course, sometimes over many months. Getting that balance wrong can result in legal costs being awarded personally against the executor. For more on what those costs can look like, see our guide to how much solicitors charge for probate.
Property raises particular tensions. There may be a probate property to sell, occupied by family members, with some beneficiaries pressing for a quick sale and others resistant to any sale at all. The executor sits in the middle of every such dispute.
In addition, beneficiaries can bring personal claims against an executor if they believe the estate is not being administered properly or promptly. Executors have a legal duty to safeguard the estate and act in a timely way. The usual benchmark is the executor’s year: beneficiaries cannot generally compel a distribution within twelve months of the death, but delay beyond that needs explaining. Delays or poor asset realisations can expose an executor to financial claims.
You may want to read: Can I contest a will?
The time commitment
Many executors are surprised by how much of their time the role takes. Establishing the full extent of assets and debts requires contact with banks, utility providers, investment companies, accountants, and often many others. The process can take months, sometimes longer for complex estates.
Executors are not paid for their time, unless the will contains a charging clause, which is standard where a solicitor or other professional has been appointed. They can, however, claim reasonable out-of-pocket expenses from the estate.
Cash flow during the administration
Most costs of administering an estate can eventually be reclaimed from it. The difficulty is that funds are not always accessible at the right moment. Where an estate includes non-cash assets such as property or a family business, it may not be possible or desirable to sell them quickly to pay the tax. In these cases, HMRC allows the inheritance tax attributable to certain assets to be paid in ten annual instalments. That covers land and buildings, a business or an interest in a business, controlling shareholdings, and unquoted shares worth more than £20,000. Interest runs on the outstanding balance.
Where cash is needed before assets are realised, executors can consider probate loans, including a loan to pay inheritance tax. There remains a risk of being temporarily out of pocket, so it is worth understanding all the options before committing. HMRC charges interest on late inheritance tax at the Bank of England base rate plus 4 per cent, currently 7.75 per cent, so a loan could work out cheaper in some cases. Loans come with their own risks and obligations, so it is important to take advice before committing.
You may want to read: How to pay inheritance tax without selling probate property.
Personal financial liability
This is the area of greatest risk for most executors. Inheritance tax is primarily payable by the estate. However, the executor is personally responsible for ensuring it is calculated correctly and paid on time.
The estate must be fully and accurately valued, covering all assets and liabilities. Personal liability arises if estate assets are distributed before HMRC is fully settled. Agreements with beneficiaries do not remove executor liability. Executors must verify and disclose all estate assets and liabilities.
You may want to read: How to value an estate for probate.
Whether a full inheritance tax return is required depends on the size and nature of the estate. Since January 2022, the reporting thresholds were significantly increased, meaning more estates qualify as excepted. For a low-value estate, the gross value must not exceed the nil-rate band. For these excepted estates, personal representatives do not need to submit a full IHT400 form to HMRC. Instead, inheritance tax information is included directly in the probate application. Where the estate does not qualify as excepted, a full IHT400 return is required.
It is worth noting that the nil-rate band and residence nil-rate band thresholds are frozen at their current levels until at least April 2031. The nil-rate band remains £325,000 and the residence nil-rate band remains £175,000. Frozen thresholds mean more estates are drawn into scope each year as property values rise.
Where a full return is required and an executor submits an inaccurate one, HMRC can hold them personally liable for the tax shortfall. The case of Harris v HMRC [2018] UKFTT 204 (TC) provides a vital reminder to executors that they will ultimately be held liable and pursued by HMRC in the case of non-payment of tax, even if executors have distributed the estate funds to beneficiaries who assured them they would pay the tax due.
It is therefore always important to obtain clearance for inheritance tax from HMRC, using form IHT30, before fully distributing the estate, so that any tax due can be paid from estate funds.
A second protection is worth taking at the same time. A notice under section 27 of the Trustee Act 1925, placed in the London Gazette and in a newspaper circulating in any area where the estate holds land, gives claimants at least two months to come forward. Once that period has passed, the personal representatives are not personally liable to anyone whose claim they had no notice of. It does not protect against a claim you already knew about, and a claimant can still pursue the beneficiaries who received the money, but it is inexpensive and it is the step most often missed.
Executors should also understand the position on gifts the deceased made in the seven years before death, known as potentially exempt transfers, or PETs. Primary responsibility for the tax on a chargeable gift sits with the person who received it. The executors become liable only if it is still unpaid twelve months after the end of the month in which the death occurred, and then only to the extent of the assets they received.
You may want to read: Probate and inheritance tax | Inheritance tax exemptions
The risks of being an executor: a final word
Being an executor is a position of trust. Most people who take it on do so with care and commitment. However, the personal financial and legal exposure is real, and it catches out those who are unprepared.
The safest approach is to take expert probate legal advice early. A qualified solicitor can help identify the risks specific to your estate before they become problems. Request a probate quote to find out what professional support would cost.
You may want to read: The duties of the executor of a will
You may want to read: What power does an executor of a will have?
Frequently asked questions
Can an executor be personally sued by a beneficiary?
Yes. Beneficiaries can bring a personal claim against an executor if they believe the estate has been administered negligently, too slowly, or in a way that caused them financial loss. Executors have a legal duty to safeguard the estate and act within a reasonable time. Taking professional advice and keeping clear records throughout the administration reduces this risk considerably.
Do executors always have to complete a full inheritance tax return?
Not always. Many estates qualify as “excepted estates,” which means a simplified declaration can be made as part of the probate application rather than filing the full IHT400 form with HMRC. Since rule changes in January 2022, a much larger proportion of estates qualify for this simplified route. Where the estate is larger, more complex, or includes certain assets, a full IHT400 is required. If you are unsure which applies, speak to a probate solicitor.
What happens if an executor distributes the estate before all tax is paid?
The executor can be held personally liable for any inheritance tax that remains unpaid. HMRC has pursued executors for tax shortfalls even where the executor had already passed funds to beneficiaries and those beneficiaries had promised to pay the tax themselves (Harris v HMRC [2018]). The safest course is always to obtain written clearance from HMRC, on form IHT30, before making any final distributions.
Can an executor be removed from their role?
Yes, though the process is not straightforward. An executor can be removed by the court where there is evidence of misconduct, a refusal to act, or a serious conflict of interest. This requires a court application and is generally treated as a last resort. Where there are concerns about how an executor is performing their role, taking early legal advice from a contentious probate solicitor is the recommended first step.
This article is for general guidance only and does not constitute legal, tax or financial advice. Rules and thresholds can change, and every estate is different. For advice on your own circumstances, speak to a qualified professional. You can book a free legal consultation through The Probate Network.
