Case Studies


Executor fails to tell insurer about mortgage interest and claim is unpaid

An Executor let out a house which was part of the estate to a tennant without telling insurers about interests of mortgage provider. As a consequence when a claim arose the insurers refused to pay.

In addition the mortgage also had to be re-arranged at considerable cost to the executor.


Executor Personally Liable for £20,000 Overpaid Pension Credit Connected with Deceased Estate

An executor and sole beneficiary asked solicitors to release estate monies on account to her. The Pension Credit was the only matter left unresolved. All other debts had been paid and the monies collected in. She was advised that the Pension Credit issue was outstanding and the total amount of the liability was unknown and that if the monies were released to her, she would have to sort the matter out herself. Reluctant to pay further solicitors fees she settled with the solicitors and the estate monies were transferred. Nine months later the Department of Work and Pensions wrote to her with a demand for £20,000 in overpaid pension credit. As the executor she was held personally liable for the debt.


Undeclared Gift Resulted in an Executor being Fined £10,000 by HMRC

An executor did not declare a gift which resulted in a fine of £10,000 from HMRC. Although liability insurance would not cover the fine it would provide defence costs for the executor if they had chosen to challenge HMRC.


Executor Faced with £33,000 Bill Over Non-refundable NHS Care Fees

An executor failed to advise the NHS in time after death to receive a full reimbursement of care fees paid in advance. The Executor was unable to recover the fees and the loss to the executor was £33,000.


Executor Failed to Notify HMRC of Fall in Value of an Asset and Forfeited the right to Offset the Loss

In this case an asset was discovered long after the death and had by the time of its discovery fallen in value. The 12 months statutory period for claiming IHT loss relief had expired. The executors were not able to extend the reporting period and factor in the loss of value.

The estate suffered an unecessary loss as a result of this mistake but it is not known if the executors were subsequently sued by the beneficiaries.


HMRC Tries to Fine Executor for a Negligent Property Valuation although the Executor Declared an Increase in Value

In 2007 Mr Lever, acting as executor for his late mother-in-law’s estate, paid £400,000 in inheritance tax, closed the accounts, and distributed the balance of the estate to beneficiaries of her will. Four months later he received a letter from HMRC saying they were re-considering the value on his late mother-in-law’s home – the house had orginally been valued by a local estate agent at £1.4 million (this was declared in the IHT200 form and submitted to HMRC) but it eventually went on to sell through a non-binding sealed-bid auction for over £2 million.

Although Mr Lever paid the full value of inheritance tax on the £2 million sold value of the property and not on the original estate agent’s lower estimate HMRC said they were considering enforcing a personal penalty for negligence on Mr Lever for the sum of £44,000 because of the information he submitted in his original IHT200 form. He refused to pay the penalty, arguing that he had not been negligent but had informed them promptly when the house sold for more than its estimated value and paid all inheritance tax in full.


Executor Had to Reimburse £300,000 to an Estate Because of Intentions Set Out in an Earlier Mutual Will

Two sisters made detailed mutual wills (leaving their estates to each other) in 1991. The wills stated that when one sister predeceased the other, further clauses in each other’s wills would come into effect, leaving their estates to 15 beneficiaries. In spite of this agreement however, in 2003, the surviving sister decided to change her will to add two new beneficiaries including her hairdresser. Then in 2006 she changed her will for a second time leaving the entire estate to her hairdresser, Ms Fraser, whom she also appointed as sole executrix. Upon her death, this had the effect of leaving Ms Fraser with £300,000.

The claimants in this case – who were some of the beneficiaries under the original mutual wills – brought action claiming the original mutual wills were still valid, therefore requesting the new executor and beneficiary return the £300,000. The court found there was sufficient evidence of intention when the original mutual wills were created for them to still be in force; therefore, the executor had to reimburse the estate.


Mutual Wills Dispute Results in Executors Paying £350,000 in Court Fees on a £134,000 Estate

Here, in a further case of mutual wills, two widowers with their own separate families married each other and created their mirror wills leaving everything to each other, with the provision that afterwards, the estate would be equally divided among all their children. However, upon the wife’s death, her husband altered his will, leaving the estate to just his descendants, and naming his son-in-law as one of the executors.

The claimants – members of the wife’s family – succeeded in claiming that the previous wills should be treated as mutual wills and so were in fact still valid.

Initially, the executors were allowed to reimburse their costs out of the estate, but due to legal bills amounting to over £350,000 for a £134,000 estate this left the claimants with nothing; this fact, and the extent to which the executors had become involved in the dispute, led the Court of Appeal to conclude that the executors should be personally liable for the entirety of the costs.


Executor Became Personally Liable for £90,000 in Court Case Costs and Estate Capital Transfer Tax and Interest

Here, the Inland Revenue attempted to sue the executor of a deceased’s estate for approx. £75,000 capital transfer tax and interest. The defendant claimed that firstly, as executor he was only a representative of the estate and not personally liable, and secondly, as a resident of Jersey he was immune from any English legal action. However, it was held that both the court had appropriate jurisdiction under which it could bring the case, and furthermore, the executor could be sued in de bonis propriis form; therefore, he was personally liable for the amount – which, by the end of the case had reached over £90,000 plus the Revenue’s costs.