Who Might Make a Financial Claim Against an Executor?

Typically, the only people who end up putting in a claim against the executor are the beneficiaries or an organisation/charity who feel that they have been left short by an executor’s calculations. They are then likely to challenge the executor’s ruling in an attempt to obtain a bigger proportion of the estate. This can be very stressful for the executor, especially if this isn’t a role that they have carried out in the past, or if they were close to the deceased.

When an executor identifies any outstanding debts of the estate, it is easy for them to unintentionally overlook one or more debts. This risks creditors ‘coming out of the woodwork’ at a later date, demanding that the debt is settled by the executor.

It is also worth noting that if a beneficiary of an estate is bankrupt, then it’s against the law to distribute their inheritance to them directly. Instead, the executor will need to give the beneficiary’s share of inheritance to a beneficiary’s ‘trustee in bankruptcy’, who will use it to pay creditors before passing filtering it down to the beneficiary. If an executor gives inheritance directly to a bankrupt beneficiary, the beneficiary’s creditors could then hold the executor liable for the money that is still owed to them. If you are an executor who has found yourself in this situation, you should seek the advice of a solicitor as soon as possible.

Miscalculating inheritance tax can also have serious repercussions for an executor. If HMRC suspect that inheritance tax has not been calculated correctly or is being withheld, they will launch an enquiry. If they find that the estate paid too little in inheritance tax, then the executor will personally be liable for making up the shortfall. This is why we always recommend that you talk to an LR Financial Adviser, to get the best advice when dealing with an estate.