Importance of Choosing The Right Executor
When clients approach us to make a Will with us, they often come ‘armed’ with strong views on who they think should inherit. However, one of the most crucial, most over-looked decisions clients face is choosing the right executor.
The executor is the person or professional firm who is responsible for carrying out the wishes set out in your Will. They ensure your estate is managed correctly, that inheritance tax is correctly calculated and settled within strict timeframes, ensuring all assets are collected and finally funds are distributed correctly according to the Will.
Ensuring you choose the right person or professional firm for this role is crucial and can be the difference between a simple estate administration and a prolonged, complicated and ultimately costly one - both financially and emotionally.
Above all else the executor should be trustworthy and have the requisite technical know-how to handle significant estates. They will need to have the ability to:
be responsible in handling financial and tax matters correctly
follow the correct legal processes
handle different family dynamics with sensitivity
be empathetic as everyone grieves differently
act impartially and show now biased no matter if the agree or disagree with any instructions in the Will
Being an executor is time-consuming, especially during the early stages when gathering the correct information needed like date of death values, house valuations. Not to mention calculating inheritance tax due and completing the probate and tax forms. Therefore, it is important to choose someone who has the time, commitment and technical expertise to take this on.
In many instances, it is useful to appoint more than one executor in your Will and / or reserve executors, just in case. This can help share the workload and responsibility: however, this again could come with its own challenges as it is important you choose people you know will work together and not against each other! Another challenge is nominated executors not willing to act or being too old themselves and not having the capacity to act. As specialist later life financial and legal advisers, we can step in as that independent professional firm to ensure continuity, technical expertise and peace of mind when the time comes. As well as taking on the unlimited legal responsibility of being an executor.
Joining the Dots with a Financial Adviser
Often when people hear the phrase ‘Estate Planning’, they often think of writing their Will, perhaps incorporating a Lasting Power of Attorney. However, Estate Planning often involves more than many people think. When families begin reviewing their estate plans more holistically, especially with our guidance as later life financial and legal specialists, they are often surprised to discover gaps and inconsistencies.
A well-considered estate plan usually brings together several areas of financial and legal planning. Wills, LPAs and Trusts form part of that picture, but so do questions about inheritance tax, long-term care considerations and investment management.
Alongside legal arrangements, financial planning considerations are often closely connected. Investment decisions, pension planning and inheritance tax allowances can all influence how efficiently assets might pass between generations both in lifetime and on death.
For some families, another important aspect of estate planning, particularly with regard to LPAs, is considering how financial resources might be used later in life, particularly if care or support becomes necessary. With this in mind, thoughts turn naturally to aligning investment management, Immediate Care Plans and inheritance tax strategies.
Many people find that different parts of their planning have been put in place at different times of their life. A Will may have been written many years ago, LPAs actioned at some point but long forgotten about, pensions and investments taken out whilst still working.
Individually, each decision may have been sensible at the time. But without reviewing them together, it is not always clear whether the overall plan still reflects current intentions and your life situation as it stands. It is critical that the financial and legal arrangements for your estate planning are perfectly aligned. If they are not, it can create unwanted upset down the line.
The up-coming changes to pension rules bring the need for joined up planning into sharp focus. With un-used pension funds to form part of people’s estate for Inheritance Tax purposes from 2027 it means that an already complicated probate process is about to be made impenetrable for the lay executor. Recent industry consultations are highlighting to the Government the impending difficulty of bringing estates together which include pensions and calculating the IHT due and on what part of the estate. The draft processes look horrible and are still being agreed as you read this. Meeting the 6-month deadline to pay the IHT from date of death would appear fanciful for those without the relevant financial and pension expertise along an understanding of the legal probate process. Heavy IHT late payment interest awaits the unprepared.
Local Estate Planning Events
To help people understand these issues more clearly, we will be running a series of free Estate Planning seminars locally this June and July. These sessions will explore key elements such as Wills, LPAs and Trusts and explain how they work alongside your financial planning arrangements like inheritance tax, investment management and care fee planning.
Tuesday 23rd June - 2.30pm - 3.30pm - St Peter’s Church, Henleaze
Wednesday 24th June - 10am - 11am - Thornbury URC
Tuesday 30th June - 6pm - 7pm - Stoke Lodge, Stoke Bishop
Wednesday 1st July - 2.30pm - 3.30pm - St Peter’s church, Henleaze
Tuesday 7th July - 10am - 11am - Henleaze Bowling Club
Call 0117 3636 212 or email community@haroldstephens.co.uk to book your place.