A recent case has highlighted the potentially complicated duties of executor, and gives a concrete example of why it may be better to instruct a solicitor if you are appointed as the executor of an estate.
In this particular case, a lady died and appointed her friend as her executor. Her estate was worth approximately £1.1m and the Inheritance Tax payable well over £300,000.
The relevant Law states that it is the executors’ responsibility to pay the Inheritance Tax. However, in this case the friend collected in all of the money, sold the property and passed all of the proceeds onto the sole beneficiary, on the agreement that this beneficiary would pay all of the liabilities, including Inheritance Tax.
HM Revenue & Customs are now bringing an action against the executor, as it was legally his responsibility to pay the Tax. His defence was that he did not have the money, but this has been struck out. Not having the money is not an excuse. The responsibility for payment was with him.
Very harsh, but that is the letter of the Law.
If you would like any advice on acting as an executor then please contact any member of our private client team here at Forrester Sylvester Mackett on 01225 755621.