Understanding personal representative liabilities
Often people are unaware of the personal liabilities that can be faced when acting as a personal representative for a deceased’s estate. This post will explain these liabilities and why professional support can be needed.
What is a personal representative?
A personal representative is a person or group of people appointed by a Will (if no Will, the laws of intestacy specify the order). Later they become Executors (or Administrators if no Will) responsible for ensuring an estate is properly dealt with.
Some of the responsibilities include:
- Registering the death
- Arranging the funeral
- Valuing the estate
- Posting the relevant notices
- Paying Inheritance Tax or any other liabilities
- Applying to the Court for Probate
- Distributing the estate
- Keeping estate accounts
Whilst some may prefer to keep responsibilities like arranging the funeral and registering the death within the family, professional support can be needed for the more complex responsibilities like paying Inheritance Tax, probate court applications, publishing notices and distributing the estate.
Inheritance Tax Liabilities
There is a lot of legislation surrounding Inheritance Tax. Due to the complex nature of the area, it can be easy for executors to make costly mistakes. As seen in the case of Harris v HMRC [2018].
In this case Mr Harris was acting as a personal representative. He submitted the HMRC application but prior to making the Inheritance Tax payment to HMRC, he distributed the estate to the beneficiary; with the understanding that the beneficiary would pay the Inheritance Tax.
The beneficiary failed to pay the tax owed and the Court’s ruling left Mr Harris personally liable for the £341,000 Inheritance Tax bill.
This case illustrates the risk surrounding Inheritance Tax and administering a deceased’s estate. As personal representatives are personally liable for Inheritance Tax arising on an estate, it can be a stressful process for individuals who are not experienced in the area.
Liabilities surrounding estate debts
Personal representatives are also responsible for debts owed from the estate. For example, building work that has not yet been paid for. If the correct process is not followed the personal representatives will personally liable for the debts.
How can we help?
There are many risks and liabilities that come with a personal representative role.
Whilst some of the personal representative responsibilities may be preferred to be kept within the family, the complex responsibilities and risks which come with them can amount to too much in an already overwhelming time.
By instructing a WT Solicitors you can be safe in the knowledge that you will not be personally liable for Inheritance Tax or the expenses that can arise when administering an estate.
One of our trusted solicitors would be more than happy to help and guide you through this process; their expertise in this area ensures you remain separate from the financial risks.
At WT Solicitors we offer a range of services customised to your situation in order to best suit your needs.
Allow us to support you in your role as a personal representative to make this challenging time that little bit easier.
