What are the risks if I don’t have any insurance as an executor?
May 28, 2014 10:51 am
For any first-time executor, the demands of managing a deceased estate can be daunting. From applying for a Grant of Probate, to the day-to-day accounting, asset management and eventual distribution of the estate to beneficiaries – but what often comes as a shock is the level of legal responsibility associated with the role. When someone is named as an executor, they often don’t realise that they can be held personally liable for any mistakes made during the management and / or distribution of the estate.
An executor can become personally responsible for:
– Any financial losses to the estate as a result of their actions
– Any shortfall in Inheritance Tax payments or Inland Revenue fines
– Any unpaid debts after the estate has been distributed
One of the best ways to avoid these potential problems is to take out a specialist indemnity policy, when you take on the role. Executors Insurance can protect you against legal or financial claims arising from your mistakes but you need to insure at the outset – it won’t be effective if problems have already come to light and you have been in the role for more than six months.