It is an honour to be entrusted with the responsibility of being the executor of a will, but what exactly does this duty involve? And how can you ensure that you are protected against any liability?
Even the simplest of estates can have unexpected issues and problems that can cause you difficulties as an executor. Laws around regulation can be complicated, and if you do not know your rights and legal protections, you could be left in an extremely vulnerable situation.
What does an executor have to do?
If you are names as the executor for the will of a loved one, you have many responsibilities which mean that the decision to accept the offer should not be taken lightly.
However, if you are able to act as executor, it will save you the expense of hiring in professionals to handle these responsibilities.
As executor, you are necessitated to pay taxes or apply for tax refunds, claim on life insurance policies, clear any debts, and, of course, ensure that assets and transfers to the named heirs and beneficiaries.
Ensuring that all insurance policies are in effect during the finalisation of the estate means that heirs and beneficiaries are not at risk of loss if the assets deplete in value for any reason.
It is common to name more than one executor, although those named can decide amongst themselves whether they will carry out their duties together, or name one person to handle this while all others are on hand to offer assistance when needed.
What are the risks?
Creditors, beneficiaries, tax officials and others may choose to take legal action against you as executor, which can be costly even if you are successful in the case.
If you make a mistake during the process, which is more than possible if you do not have legal experience, you could be personal liable for any mistakes you do make.
Dealing with the death of a close friend or relative is difficult enough for a person to handle, if you also have to face the possibility of legal proceedings without protection or support, it can all feel like too much.
How do you protect yourself?
The first way to make sure that you are protected as executor of a will is to take time to familiarise yourself with the legalities around your duties. If you understand what your responsibilities and rights are, you will be more able to protect your own situation in the event of legal action.
However, research can only go so far, and it is important to have protection outside of your own knowledge. The best way to do this is to take out executors’ insurance.
If you take out executors’ insurance from a professional company, you will be protected from any legal action being taken against you if you misinterpret a will, or make any innocent mistakes during the process.
Being the executor of the will is a huge responsibility, and for someone to entrust you with such a duty is a sign of genuine trust.
However, it is important that you guarantee that you are protected from any costly or unpleasant legal proceedings as a result of your role as executor. Taking out executors’ insurance from a trusted and reputable company is the only way that you can guarantee that you will not be vulnerable to lawsuit in the event of any complications.
Peter Collins is a director at LFC Risk and Insurance, who provide individuals and businesses with insurance and risk management advice.