We frequently meet with clients who have put off dealing with their estate planning because they don’t know who to appoint as executors. When this is the case there are a range of benefits in considering appointing an independent professional executor to handle your estate.
The role of an executor
In basic terms, the role of an Executor is to step into the shoes of the Willmaker, deal with the Willmaker’s debts and assets and to give effect to the Willmaker’s intentions under the Will.
This generally involves (but is not limited to):
- obtaining probate of the Will;
- liquidating or transferring assets;
- dealing with personal effects;
- paying debts and dealing with potential creditors;
- potentially stepping into controlling roles of existing entities, including companies, trusts and self-managed superannuation funds;
- liaising with accountants, advisors and beneficiaries;
- completing individual and estate tax returns;
- possibly defending challenges against the estate; and
- attending to beneficiary distributions in accordance with the Will.
This is a complex role and must be done with a high level of diligence, whilst upholding obligations that are legally imposed on Executors.
It is common for family or friends to act in this role and to engage an estate administration lawyer to assist them through the process. However, in some circumstances appointing a family member or friend is not possible, appropriate or practical.
When it may be appropriate to appoint a professional executor
Below are some instances where it may be appropriate to consider appointing a professional executor:
- You do not believe any family member or friend would be capable of acting in the role.
- It is a very complex estate, e.g. complicated asset structure.
- There is a high risk of challenge against the estate which may raise conflict issues.
- You have a complex family structure, e.g. second marriage or vulnerable beneficiaries.
- There are family disputes, such as children who do not get along.
- All your family lives overseas raising practicality issues and potential tax implications if appointed.
- Your assets are largely held in a discretionary trust and you do not wish to appoint family to control the trust given the potential conflict of interest.
- You have no family or other trusted person to take on the role.
Click here to read the full article on the Moores website.
