The Role and Responsibilities of an Executor or Administrator

After someone passes away, the individual appointed as the executor of their estate is granted various powers and responsibilities. This article will outline the tasks an executor is permitted to perform, as well as what they are prohibited from doing.

An executor is named in the deceased person’s Will. Their duties involve gathering information about the deceased's assets, reporting to the relevant authorities, and settling the deceased’s affairs. If no valid Will is present, an administrator may be appointed to carry out these tasks. This will typically be someone entitled to inherit under intestacy rules.

What Does the Role of Executor or Administrator Involve?

Acting as an executor or administrator can be demanding, especially if the estate is large, complex, or if there is the potential for family disputes. It can also be a lengthy process, particularly where the deceased held numerous assets or had outstanding liabilities.

The key responsibilities include:

• Valuing the estate

• Securing the estate’s assets

• Notifying creditors and asset holders of the death

• Calculating and paying Inheritance Tax

• Applying for a Grant of Probate (or, if there is no Will, a Grant of Letters of Administration)

• Collecting the assets and settling any debts after obtaining the grant

• Filing reports on the estate’s income and capital gains and paying the necessary taxes

• Distributing the estate to beneficiaries and obtaining receipts

Executors or administrators may choose to instruct a solicitor or legal professional to assist with estate administration. Doing so can help expedite the process and lower the risk of personal liability. If an executor administers the estate themselves and makes an error or neglects a duty, they could be held personally accountable for any resulting losses.

What Are Executors or Administrators Not Allowed to Do?

Executors and administrators have a legal obligation to safeguard the estate and act in the best interests of the beneficiaries at all times.

They cannot disregard the terms of the Will and must distribute the estate exactly as outlined. Any funds due to beneficiaries must be paid according to the Will’s instructions.

Assets must be sold at fair market value, and executors are generally prohibited from purchasing estate assets themselves, a practice known as "self-dealing."

Executors must handle the estate diligently, taking reasonable steps to prevent financial loss. This includes seeking professional advice when necessary, particularly to ensure that all available tax allowances and reliefs are claimed, helping to avoid an inflated tax bill.

Executors are not permitted to take money from the estate for personal use, including compensation for their time spent managing the estate. While some executors may be entitled to payment for their work, this is subject to limitations, and they should seek legal advice before withdrawing any payment.

Additionally, executors must not mix their own finances with the estate’s funds. For example, they should not close the deceased's bank accounts and transfer the balances into their personal account, even temporarily. Estate funds must remain separate at all times.

By adhering to these guidelines, executors can ensure they fulfil their role effectively and in line with legal requirements, safeguarding the estate for the beneficiaries.

Rachel Reeves’ Inheritance Tax Changes: A Wake-Up Call for Farmers

In a move that has sent shockwaves through the agricultural community, Labour’s Chancellor, Rachel Reeves, has unveiled a significant change to inheritance tax (IHT) rules that could affect thousands of farmers across the UK. Farmers, who had been assured that their ability to pass on agricultural land without facing hefty tax bills would remain intact, are now faced with a looming new tax regime that threatens to undermine this promise.

Starting in April 2026, agricultural property relief (APR) will be capped at £1 million, with assets exceeding this threshold subject to inheritance tax, albeit at a reduced 50% relief. For many farmers who own estates valued above £1 million, this change means they will face an effective inheritance tax rate of 20% on the value of their assets over the £1 million cap.

How Does Agricultural Property Relief (APR) Work?

Currently, agricultural property relief allows you to pass on agricultural land and certain related assets free from inheritance tax, either during your lifetime or through your will. This relief includes:

1. Land or pasture used for growing crops or rearing animals

2. Farm buildings, including farm cottages and farmhouses

3. The value of milk quotas linked to the land

4. Some agricultural shares and securities

However, not everything qualifies for APR. The following items are excluded from the relief:

1. Farm equipment and machinery

2. Derelict buildings

3. Harvested crops

4. Livestock

5. Property that is subject to a binding sale contract

From April 2026, the agricultural property relief will be capped at £1 million. This means that any agricultural property valued above this threshold will no longer be fully exempt from inheritance tax, with only 50% of the value above the £1 million cap qualifying for the relief.

The Chancellor claims this change will only impact a small minority of farms, with smaller family farms being largely unaffected. However, the National Farmers’ Union (NFU) has raised concerns, suggesting the Treasury’s estimates may be overly optimistic and that the new rules could affect as many as half of all working farms in the UK.

With these upcoming changes it’s now increasingly important that farmers take a proactive approach in reviewing their estates and consider their options well in advance of any succession planning.

New Partner Promotion at BSG Solicitors

BSG Solicitors has announced the promotion of Hannah Forsyth to Partner within the Family Law Department.

Hannah specialises in Children Law and is a member of the Law Society’s Children Panel. Her expertise includes advice on care proceedings, special guardianship and child arrangement orders.

She qualified as a Solicitor in 2019 and is experienced in dealing with highly complex matters and has run cases through the High Courts. Hannah is also a Legal Aid Supervisor, which involves all aspects of compliance and file management, supervision of staff, dealing with Legal Aid Agency audits and improving efficiency.

Hannah commented:

“I’m thrilled to be joining the Partnership at BSG Solicitors. The firm is committed to providing the best possible advice and support to clients and our family law team has a strength in depth covering all aspects of family law, both private matters and legal aid cases.”

Speaking of the promotion, Rebecca Lauder, Partner at BSG Solicitors, added:

“Hannah is a hugely talented Solicitor and her promotion is thoroughly deserved. She has made a valued contribution to the family law department and the firm’s continued success as a whole. I look forward to seeing her flourish in her new role as partner.”

Pictured L-R: Fiona Jolleys, Pippa Weld-Blundell, Rebecca Lauder, Hannah Forsyth, Emma Edwards.

BSG Tickled Pink

BSG Solicitors are once again delighted to support the #Wearitpink campaign raising funds for Breast Cancer now.

Breast Cancer Now’s wear it pink day is one of the biggest fundraising events in the UK. Taking place during Breast Cancer Awareness Month, thousands of amazing people wear it pink in their communities, schools or work places for the UK’s largest breast cancer charity.

Why might you want to purchase your freehold?

Most flat owners do not own the freehold of their homes. Instead, they are known as ‘long leaseholders’. They do not own their property outright, and ownership will revert to the landlord when their lease expires. This type of arrangement can have some pretty significant consequences, particularly in relation to your property’s value, what you are permitted to do with it, and your ongoing payment obligations. Therefore, some long leaseholders decide to exercise their legal right to join together with other long leaseholders in their building to purchase the freehold. You may see this referred to as collective, freehold, or leasehold enfranchisement, all of which mean the same thing.

Here, we discuss five key reasons why, as a long leaseholder, you might want to consider purchasing your freehold.

1.      To gain control of your building.

When you purchase your freehold, you take control of the management of your building and have a say in decisions relating to important matters such as maintenance and refurbishments.

2.      To bring an end to excessive service charges.

A common complaint among long leaseholders is the perception that their landlord is charging excessive service charges or providing substandard services for the sums demanded. By purchasing your freehold, you gain maximum control of the building and can ensure the service charge expenditure is fair and reasonable.

3.      To increase the value of your property.

The value of your property will likely drop as your lease term decreases. In addition, many mortgage lenders do not like short leases, so you may find it more difficult to obtain a mortgage. When you buy the freehold, you and the other freehold owners can extend the terms of your leases to 999 years, thereby increasing the value of your property.

4.      To increase your property’s saleability.

Purchasing a share of the freehold is generally attractive to buyers. This, coupled with the ability to extend your lease before selling, can significantly increase your chances of attracting buyers willing to pay a good price for your property.

While there are many clear benefits to purchasing your freehold, it’s important to consider the potential downsides before proceeding. The process itself can be complex, costly and time-consuming, sometimes taking many months to complete. Owning a share of the freehold is a significant responsibility, requiring an ongoing commitment both financially and in terms of your time. An experienced property solicitor will help you understand the pros and cons and decide whether it is the best option for you.

Transfer of Equity Process

‘TOE’ stands for ‘Transfer of Equity’. The TOE process is used to transfer the ownership of a property from one party to another, such as when a property owner gets married and wishes to add their new spouse to their property’s title documents.

A general overview of the TOE process is as follows:

1.      Agree on the TOE terms.

Before proceeding with a TOE, it’s crucial to ensure that all parties have a clear understanding of the terms. For example, if you are divorcing your partner and wish to remain in the family home, you may need to agree on a price for buying them out. We would recommend matrimonial advice from a Family Solicitor if the transfer is due to a divorce.

2.      Secure the existing mortgage lender’s consent or obtain a new mortgage.

If there is an existing mortgage on the property, you must seek the lender’s consent to the proposed TOE. If the lender does not believe the new owner can afford the mortgage repayments, they are unlikely to agree to the TOE. If the new owner cannot secure an alternative mortgage, the transfer cannot proceed.

3.      Carry out all necessary searches and checks.

You must review the title deeds to check that there are no restrictions that may affect the proposed TOE. Your solicitor or conveyancer will do this for you.

4.      Draft the legal documentation.

The key document in a TOE is the transfer deed. Your solicitor or conveyancer will prepare the document, outlining the TOE and stating who will own the property going forward.

5.      Sign the legal documentation.

Once your conveyancer or solicitor has prepared the transfer deed and any other legal documentation, they will send it to you and the other parties to sign.

6.      Complete the TOE.

Your solicitor will complete the TOE by dating the signed documentation and arranging for the payment of any money.

7.      Pay any necessary Stamp Duty Land Tax (SDLT)

Whether or not SDLT will be payable on the TOE depends on the circumstances. If the transfer is a gift, no SDLT will be due. However, SDLT can be payable even if no money changes hands. For example, if your new spouse transfers half of their property to you and you take on half of the mortgage, you will need to pay SDLT if your part of the mortgage exceeds the SDLT threshold, currently £250,000. There may also be other tax implications when disposing of property, even for no consideration, and it’s wise to obtain advice from a tax expert before proceeding.

8.      Update the property register

After the TOE is complete, you’ll need to apply to the Land Registry to update the property register to reflect the change in ownership. Once they have made the necessary amendments, the land registry will send you a copy of the updated register.

BSG Welcomes Experienced Family Solicitor

BSG Solicitors are delighted to have Alison Moore join our family law department in Lancaster.

Alison brings with her a wealth of experience, having qualified in 1992 she has worked exclusively in family law since then and has extensive experience in dealing with divorce, dissolution of civil partnerships and the resolution of complex financial disputes.

She also regularly advises on pre-nuptial agreements, cohabitation and separation agreements.

Alison is a Resolution accredited family specialist and an experienced collaborative lawyer, which means she can offer an alternative route to help separating couples reach decisions amicably.

Alison commented:

“I’m pleased to have joined such a well-respected family law team. Having spent much of my career based in Kendal, I’m looking forward to working with clients across South Cumbria as well as Lancashire.”

Amy Does It Again

Amy Nash has been shortlisted for National Paralegal of the Year - Midlands/North at the National Paralegal Awards for the second year running!

‘Paralegal of the Year’ is awarded to individuals who can clearly demonstrate how well they have performed to exceed clients’ expectations and how they have made a significant contribution to their practice.

Amy commented:

“I can’t believe I’ve been shortlisted for a second time. It was a fantastic experience last year and great to meet so many of my peers from law firms all over the country.”

Rebecca Lauder, Partner and Head of Private Client at BSG Solicitors added:

“This is so well deserved once again. Amy is an asset to the firm and has demonstrated her commitment to the firm and her career through her continued studies and progression each year.”

The National Paralegal Awards winners will be announced on 5th September 2024 at the Burlington Hotel in Birmingham.

Inheritance on Divorce

Often, one of the most contentious issues that must be resolved when a couple divorces is how their finances should be divided. Parties who have inherited money or assets often feel that their loved one’s wishes should be respected, and the inheritance should be kept for their sole benefit. However, whether or not an inheritance will be ring-fenced ie kept out of the marital ‘pot’ depends largely on how the divorcing couple treated the inheritance and, therefore, whether it should be classed as a matrimonial or a non-matrimonial asset.

Matrimonial and non-matrimonial assets

Assets are divided into two types: matrimonial and non-matrimonial. Generally speaking, matrimonial assets are those held in joint names or acquired or cultivated by the couple during their marriage.  However, the Court is more frequently takes into account the assets from the date of cohabitation. The marital home is always a matrimonial asset. Non-matrimonial assets are those acquired by one partner in their own right, outside of the marriage.

Matrimonial assets always form the bulk of the pot to be divided between the divorcing couple when reaching a financial settlement. Non-matrimonial assets are generally excluded from the pot. However, non-matrimonial assets can morph into matrimonial assets regardless of their origin, for example, if they become mingled with matrimonial assets. Furthermore, the Court may take non-matrimonial assets into account to reach a fair outcome if the matrimonial assets are insufficient to provide for both parties’ reasonable financial and housing needs.

How is inheritance treated in divorce?

The key question, therefore, is whether the inheritance is classed as a matrimonial or non-matrimonial asset. Since inheritance is left to one of the partners individually, many consider that it should automatically be classed as non-matrimonial in nature. Indeed, in some cases, it will be, particularly if it is due to be received after the divorce is finalised or was kept in a separate bank account throughout the marriage. However, assets that are initially non-matrimonial can easily morph into matrimonial assets. So, for example, if the inheritance was held in a joint account or used to benefit the whole family, it may have transitioned from being a non-matrimonial asset into a matrimonial one.

Essentially, therefore, there is no hard and fast rule governing how inheritance will be treated in divorce. Whilst the Court will not automatically include one partner’s inheritance in the financial settlement, it will nevertheless carefully consider how the inheritance was treated during the marriage. If the couple used the inheritance for their joint benefit, the Court may decide it is, in fact, a matrimonial asset and should be shared between them.  Even if the Court concludes that the inheritance is a non-matrimonial asset, it may still include it in the pot if the matrimonial assets do not adequately cater for each party’s needs.

For personal advice on any family law matter please call 01524 386500 or 01772 253841.

Divorce without consent

Acknowledging that your marriage has ended and you want a divorce can be life-changing. The stress and emotional toll can be intensified if your husband or wife makes clear that they have no intention of agreeing to a divorce. However, with the introduction of the no-fault divorce in 2022, it is now far easier to divorce your spouse without their consent.

Can you divorce your spouse without their consent?

In short, yes, you can divorce your spouse whether or not they consent, provided you have been married for at least 12 months. When applying for a divorce, you do not need to apportion blame. It is enough to confirm that your marriage has irretrievably broken down. Your spouse is, generally speaking, unable to contest your application. They can only do so in very limited circumstances, such as if they question the jurisdiction of the English Courts.

How do you divorce your spouse without their consent?

Whilst couples can initiate a divorce jointly, either partner can also apply of their own accord, on a sole basis. The party applying for divorce becomes the applicant in the divorce proceedings, and the other party becomes the respondent.

When you file for divorce on a sole basis, the Court will send a copy of your application to your spouse. They must then acknowledge receipt of your application. If they seek to delay matters by refusing to do so, you can apply to the Court to request that the matter proceeds without your spouse acknowledging receipt.  However, the Court will need to be satisfied that your spouse has received the divorce application or that service of the divorce application can be dispensed with.  If the Court is satisfied after considering the evidence, an order will be sent out confirming this.  The divorce can then proceed without your spouse’s involvement.

How long does it take to divorce your spouse without their consent?

Whilst there is very little scope for your spouse to hold up your divorce by contesting your application, the process can nevertheless take many months. Once you have issued your divorce application, there is a 20-week ‘cooling off period’, during which time you and your spouse can reflect on whether reconciliation might be possible or otherwise try to reach an agreement over issues such as how your assets should be divided and where your children will live.

When the cooling-off period has ended, you can apply to the Court for a ‘Conditional Order’, which confirms that you are entitled to a divorce. Six weeks and one day later, you can apply for a Final Order. This is the document which will legally end your marriage. Taking these time limits into account, a straightforward divorce may take at least eight months to complete.  However in many cases the Final Order in the divorce proceedings is not applied for until after division of the matrimonial assets has been agreed which will, of course, mean the process can take much longer.