The role of the Executor is crucial, and you as the will maker should give a great deal of consideration to whom you choose.
When discussing a Will, the focus tends to be on who gets what or, more often, who has been left out. Most people tend to overlook the most important person – the Executor. The term ‘Executor’ is usually confused with ‘attorney’. An Executor is appointed to administer the estate after they pass away whereas an attorney is appointed to act in that person’s place when they are alive.
The role of the Executor is crucial, and a will maker should give a great deal of consideration to whom they choose. An Executor essentially steps into that person’s shoes to act in their place after they pass away. It is important that, when choosing your Executor, you have a great deal of trust in that person to do the right thing and carry out your wishes because it is a complex and demanding role.
Duties of an Executor
Being an Executor can take up a considerable amount of time. The duties of an Executor include but are not limited to:
Locating the Will;
Arranging the funeral;
Advising beneficiaries of their entitlement under the will;
Identifying all assets and liabilities of the estate;
Protecting the assets, and paying the liabilities;
Applying to the Court for a grant of Probate or other grant of representation;
Keeping accounting records and finalising the deceased’s taxation affairs;
Distributing the assets of the estate to beneficiaries;
If necessary, the executor might also have the difficult task of defending an estate in litigation.
What should you consider when choosing an Executor for your Will?
This will vary depending on your personality, beliefs and values. It is important to remember that the role of an Executor is often a thankless job. It is open to scrutiny by third parties and beneficiaries, and it carries quite a bit of personal liability and risk for certain actions. Some people consider it a compliment to appoint a child, relative or friend as their Executor, failing to comprehend that it is a huge task for someone who may be grieving and distressed. Generally speaking, a person should consider the following personal attributes when choosing who to appoint as their Executor:
Personality – Is your executor reliable? Do they act responsibly? Are they competent? You should consider their intellectual abilities, emotional resilience, integrity, honesty and their trustworthiness;
Geographical location – The location of your executor is important. We do not recommend choosing an executor who is located interstate or overseas as this may delay the administration of the estate and incur unnecessary costs. For example, obtaining a Grant of Probate is a court procedure, and court documents can only be signed by certain persons, and the original documents must be signed, returned and physically filed with the Court;
Age – It is also more practical to choose someone who is younger than you to safeguard against your Executor losing capacity or passing away before you.
How many executors should you appoint?
The laws in Queensland limit the number of executors a person can appoint to four persons at any one time It is not unusual to appoint more than one Executor. An Executor’s duties are burdensome so it can be helpful to appoint two executors so they can support each other. However, sometimes the appointment of multiple Executors can cause issues, especially if there are underlying issues between those two people or if there is a conflict of interest.
Difficulties with blended families or second marriages where both husband and wife have adult children from a previous marriage can be problematic. The will maker wants to ensure equality and protect the interests of their children and their current spouse. With this in mind, they appoint their spouse alongside their child or children. This creates difficulties if the relationship is not tenable or a potential conflict of interest if the Will does not provide adequately for the spouse or the children.
Consider choosing a substitute Executor, in case one of the primary Executors is not willing or not able to act, or if they predecease the will maker.
What happens when the Executors cannot get along?
This can be more common than most people realise. The will maker should seriously consider whether their chosen executors can work together harmoniously. If Executors cannot get along, and their actions are causing delay or unnecessary wastage of the estate assets, then the beneficiaries may have a cause of action against them. Most people do not realise that an executor can be held liable for delay or error, especially if there is a direct loss as a result of their actions.
What happens if a person that you have appointed as an Executor is unwilling or unable to be Executor?
If an appointed executor does not wish, or is not able, to act then they can choose to step down (or renounce). In that case, the role will fall to the substitute Executor. If there is no substitute Executor named in the Will, then there are provisions in the Succession Acts which set out who can step into that role. Usually, a beneficiary of the Will can do this.
What problems can Executor face when carrying out their role?
An Executor’s duties can be complex and overwhelming, even in a simple or modest estate. A diligent Executor must have knowledge of the law and taxation and they should possess some business acumen – they are required to wear many hats. Usually, an Executor is unsure of what is expected of them, and sometimes they do not receive correct advice as to how to properly discharge their duties. As mentioned, an executor can be held responsible for delay or mistake, and they can be sued by beneficiaries or third parties. In essence, an executor can be personally liable for any outstanding tax owed by the deceased i.e. they may have to pay the deceased’s unpaid tax and they can be sued for not adhering to proper taxation procedures! It is imperative for an executor to not only obtain legal advice but proper tax advice to ensure the deceased’s affairs are dealt with properly. If a beneficiary or an eligible person contests or challenges the Will, then the Executor could become part of expensive and time-consuming litigation.
What happens if you don’t want to appoint your family members as your Executor?
A will maker is not required to choose a family member to be their Executor. An alternative choice is a close friend or other relative. Otherwise, if your circumstances are complex or there is the possibility that your Will may be subject to litigation then appointing a professional executor ie. an accountant or a lawyer who has experience in Succession Law may be prudent.
Is an Executor paid?
Many people don’t realise the role of an Executor is considered gratuitous. However, the court may authorise the payment of commission to an executor for their services as it thinks fit. This is referred to as ‘executor’s commission’. The Court awards commission on a case by case basis having regard to “the pains and trouble” incurred by the executor in the administration of the estate. It is not a right; it may not always be appropriate in the circumstances and it can be a costly process.
Stu Varidel and Your Choice Financial Planning Pty Ltd trading as Heart Financial Advisers are authorised representatives of Sentry Financial Services Pty Ltd AFSL 286786.
The information contained herein is of a general nature only and does not constitute personal advice. You should not act on any information without considering your personal needs, circumstances and objectives. We recommend you obtain professional financial advice specific to your circumstances. The views expressed here are not ours. While the information contained in this article may contain or be based on information obtained from sources believed to be reliable, it may not have been independently verified. Where information contained in this publication contains material provided directly by third parties it is given in good faith and has been derived from sources believed to be accurate at its issue date. To the maximum extent permitted by law: no guarantee, representation or warranty is given that any information or advice in this publication is complete, accurate, up to date or fit for any purpose; and no party or associated entities as mentioned is in any way liable to you (including for negligence) in respect of any reliance upon such information. This article may also contain links to websites operated by third parties who are not related to us. These links are provided for convenience only and do not represent any endorsement or approval by us.