Duties of Executors

Duties of Executors

Welcome to Johnson & Co, Solicitors, Cork. We offer a friendly, professional and competitively priced Probate and administration of estates service, whether you are an executor or a beneficiary or both. Johnson and Company, Solicitors, based in Cork City provide a full service with regard to the administration of estates after death, in a calm and assuring manner to take the stress out of what is always a difficult process for any family to endure.

If a will has been made it must be proved to be a valid will by submitting an application to the The Probate Office. This is known as “extracting a Grant Of Probate”. Johnson & Co, Solicitors have extensive experience in advising on succession planning and drafting wills. You may also be interested in our pages about Wills, Inheritance and disputed estate claims and Enduring Powers of Attorney. While we have tried to provide some basic legal information, no website can answer all your questions. Do you live in Cork? If so please call now to book a telephone or face-to-face conversation with an experienced Cork solicitor.

Probate and administration of estates

If there is no will made then an Administrator must apply to the Probate Office to be appointed Administrator and this is known as “extracting a Grant of Administration”. A Tax Return must also be made to the Revenue. The whole process of preparing a will offers a great peace of mind, ensuring that loved ones are provided for in the manner you want, and that you also have the opportunity to consider the tax effectiveness of this and whether any other lifetime planning is appropriate for your circumstances. It also means that the responsibility for administering your estate can vest in people whom you have chosen.

Duties of executor

The duties of an Executor fall into four main categories that are summarised below. Although it is possible to administer an estate without the help of a solicitor it is not advisable

a. Identify and gather in the assets of the estate

Care must be taken to properly identify all assets of the estate. Generally it is easier to identify assets such as houses, land and quoted investments but private company shares or assets that are not in the sole name of the deceased can cause problems.

b. Pay lawful debts of testator.

Prior to making application for a grant of probate the Executor must identify all debts and liabilities of the deceased. There are legal requirements which must be satisfied including the placing of public advertisements etc. and legal assistance should be sought in complex or valuable estates as the Executor could be held personally liable for the debts if proper procedures are not followed.

c. Distribute the estate according to the wishes of the deceased.

In many cases the Will is clear and unambiguous. An Executor must follow the instructions laid down in the will. If there is potential for conflict, especially within the family, the Executor must be capable of acting objectively and impartially to avoid friction as far as possible.

d. Duty to Account

Executors are required to keep clear and accurate accounts of their dealings with the deceased’s assets and liabilities, and beneficiaries are entitled to inspect them. Where an Executor has no experience of the preparation of accounts, he is under a duty to delegate the task to a competent person. Otherwise, the court might intervene and demand an account. On completion of the administration of the estate, the executor must produce final administration accounts to the residuary legatees which must show the value of the estate as of date of death, all financial transactions which occurred during the administration of the estate including all payments made and received, all income earned during the administration of the estate such as rental income, bank interest income, share price increases and dividends.

Liability of executor

Income and Capital Gains during the administration period It may take the personal representative some time to administer the estate during which time income may be earned or capital gains may be made. Broadly the position is as follows.

Income Tax

The personal representative is liable to pay Income Tax at the standard rate on income earned during the administration period. There is no entitlement to personal credits or to any of the reliefs otherwise available to individual taxpayers.

In certain circumstances, the tax office may concessionally agree to treat the beneficiary as succeeding to the inheritance from the date of death. In such circumstances, the beneficiary will take full responsibility for paying Income Tax on the post-death income as if he or she had been entitled to the asset – and the income – from the date of death.

Capital Gains Tax

Death does not give rise to a Capital Gains Tax liability. For example, if the deceased bought shares for €12,700 and they were worth €19,100 at the date of death, the €6,500 capital gain is ignored. If the personal representative sells any property during the administration period, there may be a liability to Capital Gains Tax – but only to the extent that the value of the property in question has increased between the date of death and the date of sale. Following on from the example above, if the personal representative sells the shares during the administration period for €21,600, the relevant capital gain is only €2,600. The distribution of property by the personal representative to the beneficiaries does not give rise to a Capital Gains Tax liability.

Executors We can help

At Johnson & Co, Solicitors we have extensive experience in advising on succession planning and drafting wills.

Book a telephone or face-to-face consultation with an experienced solicitor.

Call021 484 7771

or email enquiries@johnsonsolicitors.ie