Acting as executor for an estate carries a great deal of responsibility, and while the majority of executries are completed without incident, complications can arise and executors can sometimes find themselves in a difficult and unexpected situation.
In one recently reported case, an estate’s executor ended up personally liable for paying the majority of a £340,000 inheritance tax bill that was due on the estate.
Glyne Harris had been appointed executor of an estate worth around £1.2 million, reports MoneyWeek. He identified the assets belonging to the estate and filed an inheritance tax return with HMRC and paid some of the tax due with money from the estate. However, he then agreed to pass the majority of the estate to one of the beneficiaries before the rest of the tax was paid, on the understanding that this beneficiary would pay the outstanding tax.
Unfortunately, the beneficiary reneged on this and moved to Barbados without meeting any of the tax obligations. This meant the executor was responsible for paying the inheritance tax, and as he no longer had access to the estate’s assets he had to settle the bill from his own funds.
He appealed against this liability, but was unsuccessful.
This case demonstrates why you should always think very carefully before agreeing to act as executor for an estate and be sure you fully understand the responsibility you are taking on. Employing the services of legal professionals to help you administer the estate can help ensure the role is carried out correctly and minimise any personal risk to yourself.
To find out more about our probate and executry services then contact our specialist executry lawyers today.