There is a significant rise in disputes against the executors of Wills. Why?

Research published by the Times states that in the last 12 months, High Court claims against executors in England and Wales have grown by more than 20 per cent.

Many claims involve allegations of a breach of fiduciary duty, with executors failing to act in the best interests of the beneficiaries, often by distributing assets of a deceased person against the terms of the Will. This is partly due to the increase in the number of blended families—where partners have their children and another child or children from a previous relationship—and escalating property values.

These findings come as no surprise. As the research indicates, blended families' increasing prevalence and popularity arise from people living longer, having relationships in later life, more remarriages, increased cohabitees, more stepchildren, adult children living at home, and other evolving trends. Similarly, as estates continue to grow in value – in line with property prices – they fuel the potential for disputes to arise.

Often, parents pass on this legal and financial liability to their children without knowing the potential damage to the estate and family relationships.

Although the research highlights these as the main causes of disputes, multiple potential contributory factors exist (see below). These include:

• Executors' Inaction. Probate is a big responsibility, and some may be unable or reluctant to deal with the legal, financial, and administrative issues surrounding it. Estate funds might be used as if they have already been inherited.
• Executors who are also beneficiaries. A conflict exists between the two roles that can be hard to separate. Executors have to be neutral, whereas beneficiaries have a vested interest—people can get into difficulties when trying to juggle the two roles.
• Reluctance to leave. Some occupants of a property owned by an estate—cohabitees, spouses, or adult children—do not want to or refuse to leave. In this context, executors may have to take possession proceedings against them.
• Family executors. We see many homemade Wills in which people appoint their closest family members as executors rather than solicitors or professional executors.
• Lack of understanding. People are often unfamiliar with their role as executors, their primary responsibility to the beneficiaries, and their duty to carry out the terms of the Will.
• Out of date Wills. Regrettably, failure to update Wills to allow for changing circumstances is all too common. We see cases with deceased executors, for example. Homemade Wills may not include a substitute executor.
• Probate delays. These can lead to property maintenance costs and expenses – potentially for a long time. The executor's expenses can be a point of dispute, particularly if the executor is living in the property.
• Difficult circumstances. It can be very challenging if, for example, an executor does not inherit a property but remains living in it without paying rent.
• Moral views mainly depend on whether there is a departure from the traditional, customary or expected position.

Other liabilities around IHT include

1. Legal Duty to Administer the Estate: Executors, as named in the Will or appointed by the court, have the legal authority to collect, value, and manage the deceased’s assets. This role is responsible for ensuring that IHT is calculated accurately and paid from the estate before any assets are transferred to beneficiaries.
2. Compliance with HMRC: HMRC requires executors to submit accurate documentation, such as the IHT400 form, detailing the estate’s assets and their values. The executor must also ensure that the correct amount of IHT is paid on time. HMRC views executors as the point of accountability, so executors are legally liable if the tax is underpaid or not paid by the due date
3. Personal Liability: If executors distribute the estate without paying the required IHT, they could be personally liable for any unpaid tax.

Solution

Instructing specialist professional executors is the common sense option for managing an estate because we bring expertise, impartiality, and efficiency to the process. Here are the key benefits:

• Protection for Beneficiaries: UK law aims to protect beneficiaries from receiving distributions from an estate burdened with outstanding tax liabilities by placing the responsibility for tax payment in the hands of professional executors. Professional Executors ensure that taxes and debts are cleared first, leaving beneficiaries with a “clean” inheritance and no personal liability.
• Expert Knowledge: Professional executors understand the complexities of probate law, tax regulations, and estate management and ensure compliance with all legal requirements.
• Efficient Estate Administration: With experience in estate administration, professional executors can expedite the probate process, reducing delays and minimizing stress for the family.
• Impartial Decision-Making: Professionals provide an unbiased approach to handling the estate, which is especially helpful in preventing or resolving conflicts among beneficiaries, particularly in complex family situations.
• Accurate Inheritance Tax Calculation and Payment: Specialist executors are well-versed in Inheritance Tax (IHT) regulations, minimizing the risk of underpayment or penalties and ensuring that the tax is paid correctly and on time.
• Avoidance of Personal Liability: Family members acting as executors can be held personally liable for any mistakes. Professionals take on this risk, giving families peace of mind.
• Cost Savings: While fees are involved, professional executors can save the estate money by identifying potential tax reliefs, exemptions, or efficient ways to settle liabilities.
• Professional Handling of Complicated Assets: Estates with complex assets, such as overseas property, business interests, or investments, require specialized knowledge that professional executors possess.
• Reduced Emotional Burden on Family Members: A professional executor shields grieving families from estate management's administrative and often stressful responsibilities.

By appointing specialist executors, families ensure a smoother, more efficient administration process, ultimately safeguarding the wishes of the deceased and the interests of all beneficiaries.

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We continue to work with the Honey Legal Probate team to offer our clients peace of mind.

With a team that has over?125 years of?experience managing the probate process, Honey Legal is a Trustpilot 5-star rated specialist in this somewhat complex legal area. Unlike many other providers, Honey Legal control the whole end-to-end process in-house with a combination of probate and conveyancing experts. This makes our process much more efficient than those who outsource varying elements.