Estate Accounts Services

Executors and personal representatives who are appointed to administer an estate, whether under a Will or by obtaining a grant of letters of administration, have a duty to collect in the deceased person’s assets, pay off their debts, and distribute what’s left in accordance with their Will or the Intestacy Rules. This usually involves a large number of financial transactions in and out, and it is therefore another of the duties of executors and PRs to produce what are called Estate Accounts. Estate Accounts are a financial record of all of the estate’s assets, liabilities, payments.

Who can see the Estate Accounts?

The executor / PR is only required to show the Estate Accounts to the Court (under the Administration of Estates Act 1925) and the residuary beneficiaries. A residuary beneficiary is anyone who is entitled to a share of what remains in the estate after the executor has dealt with paying all the expenses, gifts, debts and taxes which the estate is liable for.

What should be in Estate Accounts?

Estate Accounts do not follow a prescribed format, but they must have sufficient detail to show all of the financial matters relating to the estate. We would therefore expect to see things like:

• Individually listed assets (properties, cars, jewellery, bank accounts, savings etc.);
• Individually listed liabilities (mortgage, credit card balance);
• Income (interest on savings, rent payments on tenanted properties etc.);
• Any asset value increases between the date of death and the date of distribution;
• Inheritance Tax calculations. For complex and high value estates, inheritance tax calculations can be complicated, so it is often beneficial to get a second opinion on the accuracy of IHT calculations from a specialist inheritance tax consultancy, like our friends at Harries Watkins Jones;
• Other Tax which may be payable (e.g. capital gains tax);
• Administration expenses;
• Gifts and distribution account, showing what has been paid / will be paid to beneficiaries in accordance with the Will or Intestacy Rules.

What if the executor refuses to send me the Estate Accounts?

A residuary beneficiary can make a claim to the Probate Registry for an inventory and account order, which will compel the executor to provide the Estate Accounts. When an executor is refusing to send the Estate Accounts to a residuary beneficiary, it is not uncommon to find that there are other issues with their conduct as well, so often we seek an order for an inventory and account as part of a wider claim, for example for the Removal of an Executor.

In most cases though, a letter from a solicitor is enough to persuade the executor to send the Estate Accounts.

The estate accounts do not look right. There are assets missing. What can I do?

Often, a residuary beneficiary, particularly one who was close to the deceased, is aware of assets or liabilities which are not listed on the Estate Accounts. Usually this can be put down to an oversight by the person administering the estate. However, in some situations, the executors might be deliberately trying to hide assets, perhaps so they do not have to pay additional Inheritance Tax, or because they have fallen out with one of the residuary beneficiaries and want to limit their entitlement.

When that happens, the first thing to do is to raise it with the executor and give them a chance to correct the Estate Accounts. It may simply be an innocent mistake which can be rectified with little fuss. However, if the executor refuses to correct the accounts, a claim can be made to the Probate Registry for an inventory and account order, which will compel the executor to provide the correct version of the Estate Accounts. Again, it is often the case that when an executor is not correctly recording everything they are required to in the Estate Accounts, there are also other issues with their conduct which justify seeking their removal as executor.

Who pays the costs?

The beneficiary challenging the executor over the Estate Accounts will be responsible for paying their own costs to begin with, and if the issue can be resolved in correspondence without the need for the Probate Registry or the Court to get involved, the beneficiary will remain liable for his/her own costs, and the executor will be entitled to recover their costs from the estate. However, if further action is necessary and the beneficiary is successful in their claim, the Court will usually order that the executor reimburses the beneficiary for the costs they have incurred, and often will also order that the executor is not entitled to take their own costs out of the estate. It is therefore essential that all parties take legal advice as soon as possible to minimise the costs they are required to pay and to limit the risk of them having to reimburse the other party for their costs.

If you have a concern about the Estate Accounts of someone who has recently passed away, please contact a member of our dispute resolution team in confidence here or on 02920 829 100 for a free initial call to see how they can help.