A Will appoints executors to administer the deceased’s estate. If there is no Will, then certain relatives, entitled to the estate under the “rules of intestacy”, can apply to the Court to appoint administrators.  

If you act as an executor or as an administrator, you accept a high degree of personal responsibility.  

You must ensure that all the deceased’s debts have been settled. If a debt comes to light after you have distributed the estate, you may have to pay it from your own money. Recovering the money from the beneficiaries will be your problem. If the deceased was of modest circumstances, did he receive means tested benefits and, if so, did he report his circumstances accurately and report subsequent changes in them? If the deceased was wealthier, did he put all information in his tax returns? The deceased may have incurred substantial debts of which you are unaware; and you may choose to protect yourself by publishing so-called statutory notices in the London Gazette and a local paper.           

Unless the estate is very small, or passes by survivorship, you are likely to need a Grant from the Court to gain access to the deceased’s assets. You will not be able to obtain such a Grant unless you complete documents for HM Revenue and Customs. Where the estate is below the threshold for inheritance tax, or where certain exemptions apply, you can give a shortened report. In other cases, however, you will have to complete the long and searching HM Revenue Account - IHT400 – with its schedules.       

A critical question, with which you will have to deal in your report or in IHT400, concerns gifts made by the deceased during his lifetime. Such gifts can affect whether inheritance tax is to be paid, and, if so, how much.  

In IHT400, you are invited to claim, where appropriate, business, agricultural, charitable or spouse reliefs. Some lifetime giving may not increase inheritance tax because you can show that it is “regular expenditure from income”.  

Overlooking something which should have been reported could lead to penalties and even, in the case of deliberate omission or extreme negligence, to prosecution. Conversely, failure to claim a relief could result in the estate paying more tax than necessary. It is often difficult to judge whether a relief is available, since the requirements are complex, and detailed negotiations and discussions with the Revenue may follow.    

The size of the estate – in broad terms in the case of a small estate, and with specific figures in the case of a larger estate – must be repeated in the Oath, which you must swear before a solicitor or notary.  

Most executors and prospective administrators decide that if would be safer and easier to appoint a solicitor who will act for them in the administration, and will take the worry off their shoulders. The solicitor will be responsible for seeing that the administration is conducted properly, and he will be able to save his client the bother of opening a personal representatives’ bank account by channelling funds through his clients’ account.