Indemnity insurance for executors
If you are named as an executor, you become the personal representative and assume the serious responsibility for managing and eventually distributing the estate of someone who has died.
The responsibilities of an executor are many and varied – as outlined by Legal Wills – and include:
- your access to the deceased person’s will – this defines your duties as expressed by the deceased’s final wishes;
- you need to familiarise with the contents of the will, make sure that no one else has access to the estate, and inform the next of kin and beneficiaries of the contents of the will;
- you must acquire probate – which gives you the legal status to act as executor;
- you must list, record and value all the property of the estate;
- throughout the period of probate (until the property has been distributed in accordance with the terms of the will), you remain responsible for the safekeeping of all of the property, including arrangements for suitable property insurance during probate;
- once the debts owing and taxes due by the estate have been paid, you are responsible for distributing the assets and property in accordance with the terms of the will; and
- finally, you must provide accounts to the beneficiaries of the will everything received by and paid out by the deceased’s estate.
Like many people, you may have been honoured and pleased to be nominated as an executor by a loved and trusted relative or friend. What you might not have considered, however, is this long list of onerous legal responsibilities.
According to research conducted a few years ago, more than one in four adults in the UK have been named as executors, have already carried out that role or are currently doing so. Yet 67% of these individuals did not understand the extent of the burden they are taking on.
The scale of that burden is illustrated by the fact that, as an executor, your liabilities are personal and unlimited if you make any mistake or fail to take action that results in the mismanagement of your duties. If you are found liable for such errors or mistakes, you may face potentially substantial claims for damages – and your liability extends for 12 years after you acted as executor.
Indemnity insurance for executors protects you against such claims. Not only does the cover offer indemnity against a claim (up to the limits prescribed in your policy document), it also provides compensation for the legal fees and expenses that are likely to be involved in making your defence against them.
Of course, you are likely to approach your role as an executor in a serious and responsible manner, attempting to avoid making mistakes or errors by seeking professional advice whenever necessary.
But it is only human to make mistakes from time to time – especially when this may be the one and only time you have taken on the task of executor. Indemnity insurance may relieve you of some of the potentially very expensive personal and financial risks.