Published on: 7th November 2016

The role of an executor is a big responsibility

The Department of Work and Pensions (DWP) are making a growing number of claims against estates where the deceased had been claiming benefits including pension credit.

Before any beneficiary claims their inheritance, it is vital that the executor makes sure that if the deceased was receiving pension credit or another means tested benefit, no incorrect payments were made. Sometimes the DWP will check this by requesting a schedule of assets. People often unknowingly continue to claim benefits which they should not be, and if this is the case, the executor could be liable to repay the amount.

Elderly people may not always understand or keep up with the rules of claiming, so can often be overpaid benefits. Another common problem is that people can forget they have Premium Bonds or other National Savings products, or they don't realise that these holdings are income taxable.

Also, some people who hold shares don't fully understand that these shares are the equivalent of money, and so something that could take them over the threshold for income tax.

Sorting out a refund payable to the DWP can take up to a year, resulting in stress and upset for beneficiaries as there are delays in payment of their inheritance. In spite of that, executors must be very cautious and not make any distributions before a DWP repayment has been settled. There are instances where executors can claim back funds from beneficiaries, but these are very limited. They certainly do not extend to cases where the executor knows there are debts which haven't been met, or are on notice of potential debts/claims against the estate. This is a situation where an executor makes him/herself personally liable to the creditor.

If you're an executor who needs expert advice, get in touch with us.

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