When someone dies, there is an important distinction to be made between the roles of executor and beneficiary in relation to the deceased person’s estate. Understanding this distinction will answer the question of whether an executor can inherit from a will.
What is an executor?
An executor is the person or persons named in the will as being responsible for the administration of the deceased person’s estate. The role of the executor includes the following tasks: –
- Identifying the assets and debts of the estate;
- preparing an application to court for a grant of Confirmation (if Confirmation is required – this depends on the circumstances of the deceased person’s estate);
- settling any debts or expenses due from the estate;
- calculating and paying inheritance tax and other taxes, if due;
- ingathering the financial assets of the estate (which may include selling the deceased person’s property);
- distributing the estate to the beneficiaries.
What is a beneficiary?
The beneficiaries of an estate are those persons entitled to inherit the assets of the estate. Assets may include, for example, the deceased person’s house, money or personal effects. There can be multiple beneficiaries named in a will or there can be just one single beneficiary. Depending on the terms of the will made by the deceased person, the beneficiary may be entitled to a percentage share of the overall estate, a particular asset or to a cash sum. The beneficiary’s role is to be the recipient of the financial assets of the estate. A beneficiary is not actively involved in the administration of the estate unless they are also appointed as an executor.
Can an executor inherit from a will?
Yes, an executor can also be a beneficiary and therefore inherit from the will. There is nothing to prevent someone preparing a will that appoints the same executor and beneficiary. Indeed it is very common for an executor to also inherit under the will. However, in such cases, the executor-beneficiary should be mindful of the potential for conflict between these different roles.
An executor must bear in mind the various duties that are incumbent upon them in this role. One of these duties is to act in the interest of all of the beneficiaries of the estate. If the executor is one of a number of beneficiaries in the estate, when making important decisions regarding the estate, they should remember their responsibility to all of the beneficiaries and not just themselves.
The executor must also remember that debts and expenses have to be paid before beneficiaries are paid. They should not view the estate as their own personal money until they have fulfilled all of their duties as executor and are ready to distribute the estate. It can sometimes feel frustrating for executor-beneficiaries to see creditors paid from the estate first. However, they could put themselves at risk of personal liability if they don’t follow that rule.
In estates that are particularly contentious, there could be potential for a conflict of interest to arise between the roles of executor and beneficiary. In these situations, the executor may need to think about appointing an independent executor and resigning their role as executor. However, in the vast majority of cases, no such issue arises.
If you would like any advice regarding the role of executor or how to claim your inheritance under a will, please contact Stuart Millar in our Personal Law Department on 0131 226 9163.