Does being an execitor cost you money?

BlondeHeadOn

Hi, I'm a newbie to this site so am not sure where to post this thread - I'm sure someone will tell me if I've got it wrong though!

Right, now for the question:
My brother has terminal cancer, and has asked me to be an executor to his will, along with a cousin. Cousin has done this before, I never have. I have been searching through the forums for info on what being an 'executor' entails, and found a worrying thread suggesting that as an executor one member had to take out a loan to cover inheritance tax, before the estate could be settled (eeek!)

This set alarm bells ringing, as I am not exactly debt-free myself (which is why I've been lurking around the forums for a few weeks now!), and don't want to have any difficulties trying to get a loan. I also don't like the idea of being legally responsible for someone else's debts (another thread seemed to suggest this) through acting as exceutor. My brother's affairs are likely to be in a mess, knowing him.

Could being an executor end up being a problem for me? I really don't want the responsibility anyway, but it would be awkward to say no to family.

Any helpful responses would be very welcome!

MrsTinks

Firstly it's ok to say no to your brother about being an executor of his will. If you explain to him that you don't feel you know what you're doing and you're not sure about taking on such a great responcibility even though you are very happy he felt he could trust you with it then you feel he might be better handing this on to somenoe else.

I have never heard of an executor having to cover any costs but for a good explanation of what is involved look at this article from the Guardian:
Where there's a Will there's a way

Sorry to hear about your brother

BlondeHeadOn

Hi Tine, thank you for such a quick reply and for the extremely informative link.

I would like to say no to this request, but I will then feel guilty if my cousin has to do it all - she has complained in the past about the amount of work involved with the estates of her parents, so I don't think she would be happy to be the only executor. I also don't want to let my brother down by wimping out - he has enough to deal with! I absolutely hate dealing with financial stuff though, even somebody elses ......

ozzyfan_2

firstly hi blondeheadon & welcome to the DFW board :wave:

I'm very sorry to hear about your brother

I haven't got any advice I'm afraid but would like to thank you for posting about this as I would also like to know what an executor actually has to do.
My parents have told me that I am one of the executors for their estate along with another relative who also hasn't done this before. It feels like a huge responsibilty doesn't it but I agree its so hard to say no when you feel its your duty even when you know yourself that you may not be the best person to do it.
It doesn't make it any easier that they refuse to talk about anything financial so when the time does come we won't know where to begin.

Sorry not to be of any more help but I thought it might help you to know that you're not alone in feeling this way.

MrsTinks

That is understandable
I am listed as the executor on my parents (and my step dads) wills as I am about the only one in the family likely to not mess it all up (GAH!) so I cna appreciate where you are coming from and to add to it they are all danish and it will come under danish tax laws etc so it's very different. With any luck we are talking many years in the future yet so fingers crossed

In your case then I think it looks like you'll end up beating yourself up if you don't agree. Whilst I don't think this is the right reason to agree then it obviously the only option you feel there is (unless you can think of anyone else?) but you DO have your cousin to help you whom as you say has done this before. That measn that all the legal stuff she will already know about and where to get the paper work etc.

It might be worth siting down all three of you and saying that you will help but you're unsure on the legal side of things. If she is ok with it then would she mind being the person in charge of things and you can be the one doing the leg work? ie so long as she tells you what you need to do then I am sure you can both manage this
One thing that will also make it a lot easier is for your brother to make a very clear will. Does he want things sold and the proceeds split? Or are there certain items to go to certain people and make sure you all know where important paper work is like insurance policies and a list of who will need to be notified after his passing. It's very morbid yes, but I am sure he will feel a lot better knowing that he hasn't left you both a burden and that everything will go according to his wishes.

T

BlondeHeadOn

Wow - thank you for the helpful responses, this is great. It's also really nice to know that I'm not the only one who has ever felt a bit outfaced by all this.

I think it's a very good idea for the three of us to sit down and discuss this asap. I will suggest this and try and arrange something.

It is difficult to admit to feeling overwhelmed by (what I guess is really) a bit of admin work when my brother is facing so much and the whole family is trying to come to terms with it as well. So it was great to be able to post on this site and say what I really feel.

Thank you!

serena

Just in case it may be of help, there is a Which? book called something like
'What to do when someone dies'. You may be able to get it from the library, and as The Consumers' Association are usually prety reliable, it may help you either decide whether or not to agree, and also know what to do when the time comes.

tyllwyd

If your brother has asked you to be an executor, I guess that he has gone to a solicitor to draw up an up-to-date will? Do you think it might be possible to arrange a meeting with your brother, your cousin and the solicitor so that the solictior can explain a bit more about what you would be needed to do as executor? It might also help you to understand what your brother wants, so that you can be more confident that you are doing what he would have wanted when the time comes.

I don't think that under normal circumstances you would be expected to pay inheritance tax out of your own funds but if you speak to the solicitor they can reassure you - and if necessary it might give your brother a chance to sort out his affairs in good time to make sure that something like that doesn't come up, because I'm sure he wouldn't want to put that burden onto you.

Your family must be going through a very difficult time at the moment, and you have all my sympathy.

fatbelly

My sister and I were both named executors of our Dad's will, and the estate was a bit complicated, including Inheritance Tax. Sis let me do the admin on the estate while she persued the medical negligence angle (different story). I think they call it 'reserving your right to act' or something like that. If anything had happened to me she could have continued the work. But we found everyone very helpful. And that includes the banks and the Inland Revenue!

We needed a solicitor's help on a couple of things but the solicitor worked for us. I think it is a mistake to appoint a solicitor as executor unless you really cannot find friends/relatives willing or able to act. The problem with solicitors as executors is that they are acting for the deceased and you have little control over timing and costs (usually slow and expensive respectively).

Hope that helps - PM me if you want any specific info.

fb

Extra info - inheritance tax only applies on the bit of the estate valued at over 275k (this year's figures)

CLAPTON

its a very sad and distressing situation
I would suggest, although only you can judge, whether is would be appropriate to discuss the situation with your brother. assuming your brother is aware of the seriousness of his illness, you may be able to suggest he simplifies this financial affairs now..... obviously i dont know the full situation so can't judge...but for example if he ownes shares selling them now to realise the cash would greatly simplify the executors duties, similarly if he has mulple B soc acccounts etc. they could be consolidated.
gathering facts about any insurance policies, emplyment, pensions etc would be helpful

you dont say if he has wife, children or is likely to incur inherence tax.

You mentioned whether the executors incur costs....all reasonable costs (e.g funeral ) can be charged to the estate....if inherence tax is payable most building societies and major banks will release funds to pay the tax...I found that i spend a lot on postage and phone calls that were not repaid but that was my choice
..difficult to be more specific without knowing the value of the estate, whether propery is involved , shares, saving, debts, pensions, whether there are children, wife etc etc .

BlondeHeadOn

Following the great advice I've had in this site, I rang my bother last night and arranged a meeting (with my cousin as well) to discuss it all. My brother also has agreed to go through everything with us both, and see what can be simplified. I feel a lot better about the whole thing now - like I am doing something not just leaving it all as a great unknown.

Further information: he's divorced, 2 children (who don't live with him), has a house and insurance policies etc which accordingto him may tip him over the IHT limit, so this may well be an issue. Mind you, he's always been crap with money so this may be completely wrong, which is one of the issues that we will need to discuss!

It's a bit ironic really. I'm sure he became ill because he has/had massive debts (huge mortgage, business went belly-up, owed over £65k just in loans and CC's etc and had business debts on top) and used to worry himself sick about it all - and then would go and spend yet more money on a holiday or something to cheer himself up, as he 'needed a break from thinking about it because it made him too stressed'. Then he was diagnosed with cancer, and could claim on his critical illness cover - £30k, which he spent like water on more holidays etc.

Then a year later he was told he had less than 12 months to live, which meant he could claim on another insurance - around £100k this time. Suddenly the debt which made him ill is no longer a problem, and because of all the insurance policies and house value etc. he actually seems quite well off for the first time ever. But now the money and the debt and all of it don't seem at all important anymore......

Please please, all you lovely people on this site, take care of your health whatever your debt situation - some things are much more important than money!!

Sorry to digress, but I feel better for sharing all that with you.