A key question to consider when thinking about your Will is who you should appoint as executor. The choice is important, as it has ramifications for your beneficiaries and for the successful achievement of your wishes.
Role and Responsibility
The executor has the following important roles and responsibilities:
- overall management of the financial and practical aspects of your estate: overseeing the legal and financial process from start to finish and ensuring that everything that needs to be done is done.
- managing benefits set aside for children (until they reach an appropriate age). This involves:
– discussing the children’s needs with their guardian and carer;
– determining what funds are needed for their proper care and how best to pay them (and to whom payment should be made);
– deciding what checks and controls to implement. (This maybe especially important if an ex spouse or ex partner is the guardian or carer of the children);
- to manage and control long-term trusts. (These may be discretionary trusts for your family: trusts allowing somebody to reside in a property or to receive income from investments, or a variety of other trusts.) This involves:
– making investment decisions;
– making decisions about distributions (eg amounts, who is to benefit);
– managing taxation: ensuring returns are lodged, tax is paid and taxation advice is obtained as required;
– ensuring proper record keeping and proper accounting to beneficiaries;
- litigation: defending and upholding the Will and dealing with any other attacks on the administration of the estate.
Where beneficiaries may be at loggerheads with each other, do not appoint them as joint executors. Because all decisions and actions require all executors to agree (and to sign all documents), a stalemate may result. One executor can become obstructionist and create ongoing delays, which escalate costs and magnify disputes. It is essential that all executors can work together in an objective, business like manner.
If you think your beneficiaries might not get on, you should appoint other people as executors, who have no direct interest in the beneficiaries’ emotional or financial issues. Ideally, this should be someone who can manage the beneficiaries and moderate their demands and conflicts.
The following are the options available for choice of executors:
- family or friends: you should choose business-like and assertive individuals. If they are not substantial beneficiaries of your estate themselves, they can apply for commission for their time and effort in acting as executors;
- professional advisors (such as solicitors, accountants or financial planners):
– they will want to be paid for their time, at their normal professional charge out rates;
– choose somebody who is independent of any of the beneficiaries and who has the skills to deal with the requirements of your estate.
Sometimes a trustee company or the NSW Trustee & Guardian might be an appropriate choice. But they can be a very expensive choice and often an unnecessary one. You should talk to us before you make such a choice. We have solid experience in estate planning and the practical administration of estates and are happy to field your enquiries in this area.