Close by where I live there was a fire in a 1930s style semi detached house about two years ago. It was very sad; the elderly married couple who lived there were both great hoarders of paper and so the fire spread rapidly. The property was razed to the ground and they both perished.  It was a strange sight because the other owner’s half of the house remained standing.  Eventually this had to be pulled down because it was structurally unsafe and the couple and the children had to be rehoused elsewhere after they lost all their personal possessions due to smoke damage.

Often when I advise executors and attorneys to ensure that property insurance is in place I use this case as an example. All local people in Liverpool know the house that I mean.  If you are the executor of a will you are responsible for safeguarding the assets in the estate so you are obliged to ensure that insurance cover is in place.  I do know of one case where there was a fire on an uninsured property and the executors were held personally liable for the loss.  Not all executors are aware of this huge responsibility and it can be doubly harsh for them if they are not the beneficiary of an estate in that they take on the risk without the financial rewards. Besides fire there are other reasons to insure a property and I have come across cases of burglaries, rat infestations and drug addicts squatting in an empty house and used needles scattered around a  garden.

It’s not only houses that can make the executor liable. When dealing with an estate there is always the worry of an unexpected bill slipping through the net, an enquiry from H M Revenue & Customs, a secret beneficiary out there or other claim against the estate, say from the Department of Work and Pensions who may find on their final review that the deceased claimed too much pension credit whilst he was alive.  Sometimes the local authority will put a claim against the estate for care fees. If the estate is distributed before these things are considered the claimant will seek recovery from the executor himself rather than the estate. Oucch.

Owing to the risks that they are faced with, executors’ should seek professional advice. This need not be as expensive as they think and any legal costs are deducted from the estate. In many cases the solicitor will agree to deal only with the more complicated aspects of the estate so that the time consuming things like cancelling the utility bills can be done without incurring professional fees. This gives value for money as well as piece of mind.

Solicitors firms have professional indemnity insurance which means that if there is any loss to the estate then their insurers will have to meet this rather than the loss coming out of the executor’s own pocket.

Later Life Planning and Wealth Management