The Role of an Executor – Part 2

1. Introduction

Part 1 in this series of articles set out a general synopsis of the duties and role of an executor.  One of the questions posed in that article was whether an executor must engage a solicitor to advise on the administration of a deceased’s estate.  It is advisable that a solicitor be engaged for many reasons.  Solicitors are familiar with the process and can extract the Grant of Probate without difficulty but more importantly there are a number of legal duties and statutory obligations imposed on executors of which executors are not always aware.  Indeed, our experience shows that the majority of executors become aware of such duties for the first time after having engaged with their solicitors.

2. Legal considerations of which an Executor must be aware

2.1. Executors Year

Executors have in general one year from the date of the deceased’s death within which they cannot be compelled to distribute an estate pursuant to section 62 of the Succession Act, 1965.  After this one year period expires, an executor is open to challenges from beneficiaries should they fail to properly administer an estate.

2.2. Social Welfare Payments

Where the deceased was in receipt of Social Welfare payments, then there is an obligation upon the executor to furnish a copy of the inventory of the deceased’s estate (i.e. the Inland Revenue Affidavit) to the Department of Social Protection.  The executor must also give three months notice to the Minster for Social Protection of their intention to distribute the estate.  Once this notification is served, the Minster is obliged to notify the executor if any monies are due to the Department.  Should an executor receive such a notification, then they must retain sufficient assets to discharge this liability.

Should an executor fail to give this notification, and subsequently should it be discovered that there was a liability due to the Department of Social Protection, then the legal personal representative can be held personally liable for any such payment under section 339 of the Social Welfare (Consolidation) Act, 2005.

2.3. Nursing Home Support Scheme

There is an obligation upon the executor to give a minimum of three months notice to the HSE of their intention to distribute a deceased’s estate.  Where a deceased was in receipt of ancillary State support, then there could be an obligation to refund certain monies to the HSE.

2.4. Capital Acquisitions Tax

Prior to June 2010 legal personal representatives carried a secondary liability in respect of the payment of capital acquisitions tax.  This would arise, for example, where a beneficiary did not pay any capital acquisitions tax due and the Revenue Commissioners could look to the executor to discharge it.  For this reason it was common for all executors to ensure capital acquisitions tax was paid prior to releasing assets.

Since June 2010 this secondary liability no longer exists for executors unless they have been notified of such obligation by the Revenue Commissioners.  Secondary liability does however remain where there are non-resident beneficiaries.  Accordingly, extra care is required where any of the beneficiaries are non resident.

2.5. Spouses/Civil Partners Rights

Where the deceased was married at the date of his or her death or was divorced or separated, then extra care must be taken by the executor.  The Succession Act, 1965 and the Civil Partnership and Certain Rights of Cohabitants Act, 2010 grants statutory rights to the surviving spouses/civil partners.  Such rights include that spouse’s/civil partner’s legal right share to a proportion of the estate and that spouse’s/civil partner’s legal right share to appropriate the family home in satisfaction of that legal right share.  There are obligations upon the executor to notify the spouse of their rights and there are specific time frames within which this should occur.

Matters can become further complicated where a deceased was previously divorced or separated.  An executor must take extreme caution in such situations to ensure that any distribution is not breaching the terms of any orders made.

3. Conclusion

The above represents a non exhaustive list of potential statutory obligations affecting an executor and the estate of a deceased.  Unfortunately it is the case that there are a number of executors who will have inadvertently exposed themselves by breaching the above statutory provisions having not known of their existence.  It is therefore advisable that executors should take proper legal advice prior to commencing the administration of an estate.

Should you have any queries on the above or require further information, please contact Brendan Sharkey on 01 6619 500 or bsharkey@reddycharlton.ie