Executors, Trustees, what does it all mean?

Executors and Trustees are crucial to ensuring that your estate is dealt with, and your trusts are managed effectively after you pass. They carry out a number of legal duties, so it is important to appoint people that you trust to carry out such obligations. 

 

 

 

What do they do? 

 

When someone dies, they leave behind their ‘estate’ – this is all of their assets and liabilities. The named executors in their Will are then responsible for dealing with the estate. 

 

Executors are legally responsible for collecting everything in the estate, valuing the assets, calculating any debts and liabilities of the estate, and providing a total value of the estate. 

 

Once the executors have provided this information to the HMRC, they must then arrange payment of any Inheritance Tax, if necessary. 

 

In order to begin distributing the estate to the beneficiaries named in the Will, the executors must first obtain a grant of representation. This is a document which confirms that the executors have been given the legal authority to administer the estate. 

 

Once the grant of representation is received, the executors can comply with the terms of the Will and give any gifts to the chosen beneficiaries after settling any outstanding debts to the estate. It is important that the executors account for all debts and liabilities before distributing the estate, as any shortfall may be payable by the executors if they cannot recover it from the beneficiaries. 

 

Who can be an executor? 

 

You may choose a friend, family member, colleague, or a legal professional to be the executor of your Will. In England and Wales, an executor must be over 18 at the time of your death, and they must have the mental capacity to execute the terms of your Will. 

 

It is also possible to appoint one of your beneficiaries as an executor of your Will. 

 

How can executors be appointed? 

 

When your Will is created, you specify who you would like to act as your executor(s), and provisions are made in your Will to clearly state this. 

 

You must appoint at least one executor, but no more than four can act at a time. It may be a good idea to appoint at least two executors in case one is unable to carry out their duties. 

 

It is possible for your chosen executor(s) to choose not to act, or they may be unable to act, maybe due to their health or their geographic location etc. Therefore, it can be a good idea to name any replacement executors who can step in, in the event that your chosen executors are unable to act. 

 

In some cases, it is a requirement to have at least two trustees. 

 

 

What are trustees? 

 

Some people may place their assets into a trust either in their Will or during their lifetime, for the benefit of their beneficiaries. 

 

A trustee is someone who takes legal responsibility for the assets that have been put in a trust for someone else. They manage the assets for the beneficiaries, only use them in their best interests and adhere to the terms of the trust. 

 

The trustees are not able to benefit from the trust unless the trust instrument states that they can. 

 

Who can be a trustee? 

 

Anyone over the age of 18 can be appointed as your trustee. You may also appoint a professional body as a trustee too. 

 

You may wish to appoint a beneficiary of the Trust as a trustee, however you must be careful to ensure that this doesn’t invalidate the terms of the trust or cause a conflict of interest. 

 

How are trustees appointed? 

 

For trusts created during the course of your lifetime, the trustees are appointed in the legal documentation which creates the trust – the trust deed. 

 

For trusts which are created in your Will, you must appoint your trustees in your Will. You must ensure that clarification is given as to who is to be appointed as the trustee to ensure that the trust doesn’t fail. 

 

You must appoint at least one trustee, but a maximum of four can be appointed. Like executors, it may be appropriate to appoint at least two trustees in case of a situation where one trustee cannot carry out their duties. 

 

It is also a legal requirement to appoint two trustees if the trust involves land. 

 

__________________________________________________________________________________ 

 

At Avery Walters our team of specialists can provide advice about Wills, Lasting Powers of Attorney, Trusts and Probate. 

 

Contact us on 0113 2007480 or email us at info@averywalters.com to arrange your free initial, no-obligation consultation with a specialist.