executors liability

[popular]

I am the executor of the estate of an elderly relative who has recently died, but am concerned by my obligation as executor to ensure that she made no substantial gifts in the 7 years prior to her death. The deceased was in an advanced state of dementia and her records are chaotic. I have done all I can to review her bank statements and can detect no obviously failed PETS.
However I have been advised that if I distribute the estate to the beneficiaries and a failed PET should later come to light I will be personally responsible to HMRC for any tax liability. Is there no legal or financial protection for an executor who has acted diligently and responsibly?

[pawncob]

You can take out an insurance policy to cover the potential liability.

[AGoodman]

Once all IHT has been paid, you can apply for a clearance certificate (form IHT30).

This will protect you from liability so long as you have not lied or failed to disclose anything material that you actually knew.

[mosullivan]

As an executor you are entitled to be indemnified out of the assets of the estate in respect of an estate liability and can resort to the estate assets to pay any tax. This remains the case even after you have distributed assets as the right of indemnity is a non possessory lien. Before distributing it would be prudent to ask the beneficiaries for express indemnities as a condition of receiving their gifts. These should be contained in deed. You can then enforce the contractual indemnities.