Trust & Probate Support

Acting as Executor and or Trustee

Being a trustee and or executor can often be a daunting task and it’s common for those appointed as these roles to not realise they can be personally liable if things are not done correctly. 

Why you should consider appointing a professional 

A appointing a professional executor and or trustee gives you peace of mind everything is being done correctly, and in the most efficient way possible. 

Executors have a legal obligation to act in the accordance with the Will, and Trustees a legal obligation to act in accordance with the Trust.  Both have a legal obligation to act in the best interests of the beneficiaries. If this is not being done, a claim can be made against them on the ground of Breach of Fudicial Duty. 

Is it too late for a professional to be appointed after death?

In short, no.  Whilst a professional executor and/or trustee can be appointed in the Will, it is possible and common for the appointed executor to act on their behalf at the time, and for the appointed trustee(s) to appoint a professional to act alongside them. 

Professional Executor / Professional Administrator 

An executor would be required in cases where there is a Will.  An Administrator would be for situations where there is no Will.  Collectively, they are known as “Personal Representatives”.  

It is the job of the Personal Representative to carry out the estate administration following death. 

A Personal Representative is:

• Legally responsible for the “estate assets” (money, property, possessions, etc.) of the person who has died
• Responsible for the “estate assets” from the date of death until everything has been passed to the beneficiaries (“administration period”).
• Where relevant, required to apply for probate before certain assets can be dealt with.
• During the administration period, there may be a requirement to:
  • Pay any debts of the deceased (unpaid bills, unpaid personal taxes, applying for tax refunds, etc.);
  • Inform the deceased’s employer or pension provider of the death;
  • Sell assets (properties or shares, for example);
  • Pay any Income Tax (rental income from property, for example, or profits from business investments or interest from any investments);
  • Pay any Capital Gains Tax on profits (from selling shares, property, investments, etc.); and
  • Report to HM Revenue and Customs the estate value, income and tax liability.   
• Responsible for distributing the estate in accordance with the terms of the deceased’s Will or, if there is no Will, in accordance with the Rules of Intestacy.
• Required to complete estate accounts once the estate is distributed. 

It is important to note that a Personal Representative may be required to pay any remaining debts and/or tax bills personally in the event the estate is distributed to the beneficiaries and there is not enough remaining money or assets in the estate for the debts and/or tax bills to be paid.     

In deciding whether to appoint a professional or not, many people base this solely on whether the estate is complex or not, or whether there is likely to be a form of conflict following the death.  But, it is important to consider the emotional strain that families and loved ones are under at this time; there is a lot involved when it comes to administering an estate and it’s not uncommon for this to feel overwhelming to the lay person. 

Having an impartial party as the Personal Representative ensures any decisions are made without bias to any personal or emotional complications (i.e. they can easily act within the best interest of the beneficiaries and the estate) whilst also removing the added stress to families and loved ones.

Professional Trustee

A Trustee is required where the Will creates a trust or directs assets into a trust.

In very simple terms, a Trustee assumes responsibility for the money and assets in the trust for the beneficiaries.  The Trustee will manage the money and assets on their behalf and have a legal obligation to only act in the best interests of the beneficiary and follow the rules of the trust. 

There are many different types of trust, with each trust having its own set of “rules”.  For example, the Will may create a Children’s Trust or it may create a Discretionary Trust, or even Interest in Possession Trust.  All three have very different rules, different taxes, different reporting requirements, and they may be flexible or they may be rigid.  For these reasons, it’s very common for a Professional Trustee to be involved. 

A Trustee is required to:

• Act in the best interest of the trust and it’s beneficiaries at all times.
• Understand the trust’s terms.
• Invest in assets where necessary, if the trust dictates as such.
• Manage and run the trust.
• Make ongoing decisions.
• Keep track of records and prepare tax related firms. 

Appointing a Professional Trustee gives peace of mind that the Trust can be managed both correctly and in the most tax efficient manner possible. 

Periodic and exit charges are applicable with some types of trust – a Professional Trustee will know the best and most efficient ways to lessen these, meaning more funds for the beneficiaries… all whilst ensuring the assets remain protected. 

When considering whether to use a Professional Trustee, it’s important to remember “it’s what they do” – they know the best ways to keep assets protected, they know the most tax efficient ways to manage the assets, they know what they are doing.  You take your children to the doctors when they are unwell, because doctors know what they are doing.  You take your car to a garage when it needs fixing because they know what they are doing.  A Professional Trustee is no different. 

As with a Professional Personal Representative, having a Professional Trustee guarantee impartiality for all decisions and removes the risk or conflicts of any form of bias, personal or emotional complications (i.e. they can easily act within the best interest of the beneficiaries and the estate) whilst removing the added stress to families and loved ones for the duration of the trust (which can continue throughout generations).   

How Kinherit can help

At Kinherit, we have a panel of trusted and regulated firms who we can put you in touch with who offer these services.  Each firm operates differently when it comes to their fees, but these are always discussed with you at the outset before you decide whether you want to proceed. 

We do not provide professional executor or trustee services in house, as we believe it is a conflict of interest.