Choosing the right Executor and being an Executor
Choosing
Choosing an executor is one of the most significant aspects of effective estate planning. An executor is responsible for managing the administration of your estate and the distribution of your assets in accordance with your will. Often the wrong choice of executor in hindsight can lead to or exacerbate will disputes later on.
The obligations of an executor and the factors that need to be considered in choosing an executor will vary based on the wishes of the will maker.
Firstly, one must consider the number of executors they wish to appoint. If choosing multiple executors, keep in mind that if there are any disputes between your executors, it will likely have a detrimental effect on the administration of your estate, by costing the estate time and money.
Secondly, consideration should be given to the relationship between the executor and the beneficiaries. It is not uncommon for tension to build between the two and therefore some may consider it more beneficial to appoint an independent executor to help preserve the family relationships between the executor and the beneficiaries.
Lastly, the character of the chosen executor needs to be considered. One must consider the effect that administering the estate may have on the executor and whether they have the fortitude, impetus, and sense of responsibility to carry it out effectively. Administration of an estate may create situations where tough decisions must be made to give effect to your wishes.
Acting as Executor
If someone has appointed you as an executor, there are some factors you should consider prior to accepting the position. The role can be challenging and there is a lot of work involved and there are strict rules that must be followed.
Consider the time that it will take to administer an estate. The first step is to seek approval from the Court. This is called a grant of probate.
It takes roughly 7-12 months to finalise a simple estate. Depending on how complex the will is, or the time is takes to sell property, and the added factors of finding beneficiaries and any contests to the will, this time frame can be delayed into years.
There is also a financial responsibility that is involved with being an executor. They are personally and financially responsible if they don’t properly pay all debts and expenses, protect assets correctly and they become damaged, a fair market price is not achieved for any property sold, or distribute the estate early while still owing money to the tax office.
Being an executor is not always an honour. Finalising a loved one’s affairs while grieving can be challenging and stressful. An executor can always refuse the role. Whatever the reason, whether they are living overseas, find the legal action of a contested will stressful, have concerns about managing the family issues, or are time poor to manage the estate efficiently, an executor can renounce the position or transfer the role to an independent professional executor.
More Information
If you wish to obtain further information, advice or assistance in updating your will, or in relation to a will dispute, please contact one of our Will Lawyers in our Estate Planning team at Matthews Folbigg on 9635 7966, email us at estates@matthewsfolbigg.com.au or through the website www.matthewsfolbigg.com.au
DISCLAIMER: This article is provided to readers for their general information and on a complimentary basis. It contains a brief summary only and should not be relied upon or used as a definitive or complete statement of the relevant law. Liability limited by a scheme approved under Professional Standards Legislation.
