Avoiding Difficulties with Beneficiaries in Estate Administration
An executor or administrator of an estate, has the job of winding up the deceased’s affairs and distributing the estate to their beneficiaries. At a time when emotions tend to be running high, it can often be the case that disagreements arise. We offer some tips on avoiding difficulties when dealing with beneficiaries after a death.
Taking steps to avoid disputes after a death is always advisable. Contentious probate cases can become very bitter and relationships can be irreparably damaged. Care must be taken to resolve issues as soon as they arise. By dealing sensitively with an estate administration, you stand the best chance of avoiding difficulties when dealing with beneficiaries. Also being able to resolve them amicably if necessary.
Understand your duties as an executor or an administrator
As an executor or an administrator, you have a duty to act in the best interests of the estate at all times. You also need to understand the steps in the administration process and the liabilities you will be taking on.
By knowing exactly what you should be doing, you will be able to explain the process to any concerned beneficiaries. For example, if they query the reason why you have not yet applied for a Grant of Probate or why the estate has not yet been distributed, you will be able to help them understand the procedure that you are following and that you may be relying on other organisations such as asset holders or HM Revenue & Customs to provide you with information.
You also need to know what you cannot do. For example, there is a strict rule which prevents self-dealing. This means that as the estate’s executor or administrator you should not purchase assets from the estate yourself. This is because there is a conflict of interest and a potential breach of your fiduciary duty not to exploit your position for profit. A beneficiary may be able to ask the court to set aside a purchase of an estate asset made by an executor or administrator.
In some cases, it may be possible to arrange to buy an asset. However, there is a strict procedure to be followed and it is advised that you seek legal advice if you are thinking of doing this.
Make sure you understand exactly what the Will is saying
Check that you fully understand the contents of the Will. If it is ambiguous or you are not sure exactly what certain clauses mean, you are strongly advised to speak to a Wills expert or probate advisor.
Having the confidence of knowing exactly what the Will says must happen to the deceased’s assets is crucial. If the Will is ambiguous, you could run into problems. Never assume you know what the deceased wanted to happen if it is not clearly spelt out.
Keep the channels of communication open
Relationships can deteriorate if individuals believe that they are not being kept in the loop, particularly if they feel that others are. Make sure that you keep in touch with the beneficiaries to reassure them, even though you are not legally bound to respond to enquiries and requests for information. Maintaining a good relationship goes a long way to avoiding disputes.
Have professional valuations carried out where necessary
If the deceased’s estate includes valuable items, it is open to you to have professional valuations carried out. Prevent beneficiaries from claiming that an item has been undervalued. As well as major assets such as property and cars, you can also have items worth more than £500 valued. Including things like art, jewellery and furniture. The cost of a valuation can be paid out of the estate.
Ask for professional help
As executor or administrator, you have personal liability for any errors that you make that cause a loss to the estate. For example, if Inheritance Tax is incorrectly calculated and underpaid. HM Revenue & Customs will impose a penalty and you are required to pay this out of your own funds.
If you are not sure about some aspects of the estate administration, such as correctly interpreting the Will, calculating Inheritance Tax or preparing the estate accounts, you are advised to ask a probate solicitor for help. This can also reduce the time taken to wind up an estate. The process can be very time-consuming for a layperson who is likely to have other commitments.
Asking a solicitor to deal with the estate administration can lessen the risk of disagreements. Beneficiaries are more likely to feel confident that the correct procedure is being followed and that delays will be minimised. A solicitor can deal efficiently with any issues as soon as they arise and prevent them from escalating.
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