Large or complex estate
A large or complex estate can be difficult to administer due to the sheer amount of work that may need to be completed. There is also the issue of completing the correct Inheritance Tax forms and sending the correct amount of tax to HMRC. There may be cross borders issues to resolve, business assets to sort out, or complex investment schemes to deal with. Appointing a specialist probate solicitor as your Executor at the outset will enable all of these matters to be dealt with by someone who has the relevant expertise and ensure that the common pitfalls are avoided.
As well as setting up a trust during your lifetime, it is also possible for a trust to be included in your Will. This may be appropriate if you wish to protect minor children, or to look after disabled or vulnerable beneficiaries. Appointing a professional Executor/Trustee will ensure not only that the trust is set up and run properly, but also that the beneficiaries’ needs are met throughout the life of the trust, and their best interests taken care of in all circumstances.
A professional trustee has no interest in the assets of the trust (ie they are not a beneficiary) and they are not entitled to share in the assets of the trust. A professional trustee’s function is to work with the other trustees in looking after the beneficiaries, the trust assets and in administering the trust. The difference is that a professional trustee is trained to understand what has to be done when running a trust.
A professional trustee who does their job keeps you out of trouble and, usually, out of expensive trouble that you would not have seen coming. So, whilst having a professional trustee is not legally necessary, it can be an enormous advantage.
Professional trustees are usually well acquainted with trustee duties and what action has to be taken to satisfy those legal responsibilities. Whilst a mechanic is not legally required to carry out all car repairs, most people want to ensure their car is safe and so usually have a mechanic do repairs. Not using a mechanic might save a few pounds, but ultimately could result in some nasty consequences. Having a professional trustee who carries out their functions is much the same – the benefits can far out weight any costs involved.
Individual trustees are often busy people, leaving little time to administer the trust under their control. Additionally, just like many of us do not know how a car engine works and would not know how to carry out car repairs, many people do not know how to meet their trustee duties and how to administer a trust. Remember, trustees are personally liable to all the beneficiaries of a trust and unfortunately, ignorance of their duties is no excuse in the eyes of the law.
Sometimes there can be issues within a family that make it difficult to appoint family members as Executors. This could be because members of a step family do not agree with the deceased’s family from a previous relationship, or it could be where family members simply do not get on with one another. Either way, the process is slowed down when the parties are unable to agree either between themselves or between Executors and beneficiaries.
The recent case of Ridley v Ridley is an example of this. Albert Ridley was a war hero who had survived the Normandy landings and who had been decorated for the bravery which he had demonstrated during WW2. He had left the majority of his estate to his surviving children, and to his grandchildren by a daughter who had predeceased him. He appointed his youngest son as his Executor.
After Mr Ridley’s death, his son made no attempt to fulfil the role of Executor with which his father had entrusted him. The case went to court and the judge removed him as Executor and appointed his older brother as personal representative of the estate. The older brother then launched proceedings against his younger brother to recover money that had been misappropriated from the estate by the younger brother.
The judge in the High Court condemned the younger son as an aggressive and gratuitously rude witness who appeared to have felt that his position as Executor gave him the right to do whatever he wished with his father’s estate. He had, amongst other things, withdrawn £76,000 from his father’s bank account and kept it for himself, rather than sharing it amongst the beneficiaries of his father’s Will.
His father’s military medals had been lost or stolen whilst he was Executor and he had also breached his legal duties by refusing to part with the title deeds to the family home so that it could be sold and the proceeds divided.
It is clear that choosing an appropriate Executor is a very important decision. Selecting an inappropriate Executor can be a big problem. The appointment alone, as highlighted above, can cause disharmony within a family. The selection of an Executor is a critically important decision as the amount of responsibility involved is high and the liability can also be high.
Many people choose to nominate a solicitor along with a personal executor when they write a will. This enables the burden of the work to be shared with a professional who can provide expert advice and guidance.
Whoever you choose, it is crucial to consider and ensure that the Executor is able to act responsibly, fairly and in accordance with your wishes. A professional Executor will keep all parties informed and can retain impartiality between family members, ensuring that the administration is carried out with objectivity. It removes the responsibility for the job from family and friends, particularly the surviving spouse or civil partner, and relieves friends and relatives of the duty at a time when they will be grieving.