Executors Insurance Can Help Protect Lay Executors against Potentially Damaging Claims
More and more people are choosing to execute wills without professional help but very few of us understand the unlimited and personal liability we face as an executor – particularly worrying when the High Court revealed that will disputes nearly doubled between 2013 and 2014, according to the Ministry of Justice.
Guy Everington of Executors Insurance said: “The motivation for accepting what can be a complex legal responsibility is often very positive. Many feel it is a privilege to carry out the last wishes of someone they were close to. In addition we may save the beneficiaries money by not passing on the role to a solicitor or bank – but when things go wrong the executor is often in the firing line.
“The majority of lay executors simply don’t realise that if they make a mistake liabilities are unlimited and personal. Similarly when we name a member of our family or friend as an executor in our own will we are potentially exposing them to damaging claims.”
Executors Insurance estimate that up to 16% of the UK adult population have either acted or are acting executors, with a further 12% of adults named as executors in wills but yet to take up the role. A survey conducted in 2015 by Censuswide Research Agency (2000 UK adults) into the role of executors found that 75% of us who have a will name a member of our family or a friend as executor.
The same survey also revealed that surprisingly only 4% of us fully understand the unlimited and personal liability an executor is exposed to, nearly 15% thought an executor faced no personal liability at all, while 67% admitted they simply didn’t know what the potential liabilities were.
Guy Everington continued: “there are a number of genuine mistakes that an executor might make. You could miscalculate inheritance tax, unintentionally mismanage the estate assets, fail to identify all beneficiaries or creditors before distribution – any of these errors could result in a direct claim against you.
“Estate distribution can be complex and even professional executors make mistakes but solicitors and banks are protected against potential claims by professional indemnity insurance; the vast majority of lay executors have no protection at all and are more vulnerable to claims because of their inexperience.
“Executors Insurance is an 18 month policy designed specifically to protect lay executors against legal and financial claims. One of the misconceptions is that an executor only becomes liable after probate is granted but actually you are liable as soon as you accept the role which is often immediately after someone’s death. The cost of taking out the insurance can usually be claimed back from the estate as a legitimate expense. It works in a very similar way to professional indemnity and protects executors against their own errors.”