Executor Expenses

homogeenik1

I was retained by the executor of a substantial estate to take on most of the administration work
as the executor is pressed for time. The estate is substantial but I have performed most of the work reconciled the accounts dealt with hmrc in any tax due. Whilst I have a background in finance i am not a chartered accountant but have been doing the work correctly. One of the beneficiaries has decided to take legal action against the executor as they are upset that he has retained other people to do the work. The beneficiary expected all work to be done for free. My efforts have saved the estate about 70K in fees that would otherwise have to be paid. So the question is what rights do an executor have (1) can an executor pay for their own time or only for reasonable expenses (2) can the executor in his sole discretion hire competent non-accountants to perform the financial work

Marcon

Entirely up to the executor what help they hire - but it's irrelevant here. You can enforce your contract against the person who hired you, so don't get involved in this argument.

For the record, executors can't normally charge for their own time unless the will specifically provides for this, even if they are professionals.

Brynsam

Marcon wrote: »

You can enforce your contract against the person who hired you, so don't get involved in this argument.

This is the relevant point. Whether you are qualified or not doesn't matter; the executor chose to appoint you and if you have carried out your work as agreed, must pay you under the terms of your contractual agreement with him.

If the beneficiary thinks the executor has failed in their duties (doesn't sound as if he has), that's an argument between the pair of them and nothing to do with you, so don't start getting involved. The chances of any 'legal action' succeeding are remote.

Mojisola

homogeenik1 wrote: »

One of the beneficiaries has decided to take legal action against the executor as they are upset that he has retained other people to do the work.

The beneficiary expected all work to be done for free.

So the question is what rights do an executor have (1) can an executor pay for their own time or only for reasonable expenses (2) can the executor in his sole discretion hire competent non-accountants to perform the financial work

The executor can only take expenses for their own work but can hire whoever they want - cleaners, gardeners, solicitors, house clearing companies, etc.

The beneficiary is going to waste their money if they pursue this.

As Marcon says - nothing for you to worry about. Get the executor to pay you asap.

Yorkshireman99

homogeenik1 wrote: »

I was retained by the executor of a substantial estate to take on most of the administration work
as the executor is pressed for time. The estate is substantial but I have performed most of the work reconciled the accounts dealt with hmrc in any tax due. Whilst I have a background in finance i am not a chartered accountant but have been doing the work correctly. One of the beneficiaries has decided to take legal action against the executor as they are upset that he has retained other people to do the work. The beneficiary expected all work to be done for free. My efforts have saved the estate about 70K in fees that would otherwise have to be paid. So the question is what rights do an executor have (1) can an executor pay for their own time or only for reasonable expenses (2) can the executor in his sole discretion hire competent non-accountants to perform the financial work

The executor is allowed to pay a qualified professional for help. Difficult to see how youcan have saved them £70K in fees. A lay executor can only claim theri genuine out of pocket expenses not for their time. I think the executor needs to get paid for legal advice as they should have done before engaging you. I would think that you could enforce your contract with the executor as an individual but not as executor.

Yorkshireman99

Mojisola wrote: »

The executor can only take expenses for their own work but can hire whoever they want - cleaners, gardeners, solicitors, house clearing companies, etc.

The beneficiary is going to waste their money if they pursue this.

As Marcon says - nothing for you to worry about. Get the executor to pay you asap.

Do you not think that a charging clause would be needed? In any case using someone with no professional qualification to do the executor’s work could be seen as dubious. Personally I don’t think the beneficiary would win but it could cause a lot to defend the action. Not clear cut IMHO which is why I think the executor should check.

Brynsam

Yorkshireman99 wrote: »

The executor is allowed to pay a qualified professional for help. Difficult to see how youcan have saved them £70K in fees.

Executors can hire whoever they want to hire. I don't think cleaners and gardeners regularly come professionally qualified!

You know nothing about the estate or what OP has done, so gratuitous comments about what they might or might not have saved add nothing to this thread.

Tealblue

Yorkshireman99 wrote: »

Do you not think that a charging clause would be needed? In any case using someone with no professional qualification to do the executor’s work could be seen as dubious. Personally I don’t think the beneficiary would win but it could cause a lot to defend the action. Not clear cut IMHO which is why I think the executor should check.

It's completely irrelevant, as others have pointed out. OP's contract is with the executor and as an 'executor' is a role, not a persona at law, the contract is enforceable. Why waste time arguing non-points?

Yorkshireman99

Tealblue wrote: »

It's completely irrelevant, as others have pointed out. OP's contract is with the executor and as an 'executor' is a role, not a persona at law, the contract is enforceable. Why waste time arguing non-points?

Well you are doing exactly what you say others should not do! If that is the best you can offer to a reasonable discussion then why comment at all?

Linton

AIUI and IANAL: In answer to the OPs questions...

(1) can an executor pay for their own time or only for reasonable expenses

An executor can only charge the estate for their own time if they are acting in a professional capacity or if the payment has been authorised, eg by the will.

(2) can the executor in his sole discretion hire competent non-accountants to perform the financial work

An executor has the authority to hire whoever they deem necessary/appriopriate to carry out tasks required for the management of the estate.


However any decision can be challenged by a residual beneficiary as a misuse of estate funds and it would ultimately be up to a judge to decide on the facts of the case. For example if the executor hired their spouse at an exorbitant rate one might imagine a challenge would be successful.

SevenOfNine

Linton wrote: »

For example if the executor hired their spouse at an exorbitant rate one might imagine a challenge would be successful.

I was just wondering if it was indeed something along these lines, hence infuriating the beneficiary.

"Retained", presumably your charges discussed beforehand & the executor has your invoice. Sounds like the beneficiary thinks something underhand has taken place.

What is the value of the estate & your £££ charge for the administration of it? Fair, cheap, exhorbitant? Is there only 1 beneficiary on the warpath?

As others have said, why are you bothered?