Why is it so important to choose your executors carefully

Why Choosing the Right Executor for Your Will Matters

When people think about making a Will, they often focus on who they will leave their estate to. However, the same level of importance should also be placed on deciding who will be your Executor, the person responsible for carrying out your wishes. Choosing the right one can help safeguard your estate assets and administration of them after your death.

Being an executor comes with serious legal obligations. Selecting the wrong person can lead to delays, disputes, unnecessary stress and exorbitant legal fees for your loved ones, meaning your Estate may not be distributed exactly how you wished.

 What is the role of an Executor?

An executor is the person legally appointed in your Will to manage your estate. Their responsibilities usually include:

·         Locating your Will and applying for probate;

·         Identifying, securing and valuing your assets;

·         Paying debts, taxes, and expenses;

·         Managing property and investments;

·         Realising any assets required; and

·         Distributing assets according to your Will.

The administration of an Estate can take months or even years, depending on the complexity of the estate.

Executors Do Have Legal Duties

Executors have fiduciary duties, meaning they must act honestly, diligently, and in the best interests of the estate and beneficiaries. If an executor makes mistakes, acts unfairly, or fails to follow the Will, they can be held personally liable.

Choosing someone who understands the importance of this role, and someone you can trust to do it as you wished, is critical.

Do I have to choose a family member?

When thinking of choosing an Executor, many people automatically think this has to be a family member. Generally, people will appoint a spouse, adult children, or a close relative as their executor. However, it does not have to be.

Reasons why selecting family members may not always be the best option are:

·         Emotional stress: Grief can make it difficult to deal with things with a clear mind. Emotions can sometimes get the better of people and cloud their judgement. Dealing with the Estate of a loved one can also be very confronting, and sometimes people struggle knowing that these are the last things to be dealt with for their loved ones.

·         Family conflict: If there is conflict amongst the family, particularly beneficiaries, conflict often escalates upon the passing of a family member. This then causes extra stress and can also incur excess legal fees for the Estate. Where the executor is also a beneficiary, the line between the two roles can become blurred which can also cause conflict amongst beneficiaries. This can be the case especially in blended families. If there is existing tension between beneficiaries, appointing one of them as executor may cause conflict in itself.

·         Lack of skills or time: Managing an estate requires the Executor to be able attend to administration of the Estate in a careful and efficient manner. If the Executor delays the administration, this could cause conflict amongst the beneficiaries and could leave them open to personal claims against them or the Estate.

What are the consequences of appointing an Executor that may not act in your best interests?

An Executor who does not act in your best interests can cause the following:

·         Delays in applying for probate;

·         Mismanagement of assets or the Estate;

·         Increased legal costs leading to decreased entitlement to the beneficiaries;

·         Strategically manoeuvring matters to benefit them;

·         Challenges to the Will or Estate;

·         Breakdown in family relationships.

In some cases, beneficiaries may need to apply to the Supreme Court to remove an executor. This causes unnecessary legal costs which deplete your Estate and cause further family turmoil.

Can I appoint my lawyer or accountant as my Executor?

 You can appoint a professional executor, such as a solicitor, trustee company, or public trustee. Sometimes these people may charge the Estate for their time, but the advantages of appointing a professional executor are:

·         They may have more knowledge and expertise in Estate Administration meaning they may be more efficient and understand exactly what needs to be done;

·         They are objective throughout the matter and are not driven by emotion. This gives the beneficiaries confidence that the Executor is not also interested in their personal gain like a family member would;

·         There is a reduced risk of disputes against the Executors or the Estate.

Choosing a professional outside of the family unit is particularly valuable for complex estates, family businesses, trusts, or blended families.

 Consider Appointing More Than One Executor

If you think that appointing one person may cause conflict amongst those that were not appointed, you can appoint more than one person. The advantage is that the Executors must agree on all decision-making aspects of the administration, so you can have more confidence that the Executors appointed would do the right thing.

However, often problems arise when more than one Executor is appointed and those Executors do not get along. This can cause dispute between the Executors, delay the administration of the Estate and incur high legal fees.

A more balanced approach could be appointing a family member as well as your accountant or lawyer so typical disputes that can arise against executors are reduced.

Review Your Executor/s Regularly

Life happens and things can change and so should your Will. You should review your executor appointment if:

·         Your executor passes away or becomes incapacitated;

·         Your relationship with them changes or their relationship amongst your family unit changes;

·         Your estate becomes more complex;

·         Family circumstances shift (marriage, divorce, children);

The wrong person as executor can be one of the biggest problems in administering your Estate.

Our Experiences with Executors:

·         Will-maker appointed their 2 children who do not get along. One Executor refused to act and delayed the administration of the Estate. Eventually one executor had to make an application to the Supreme Court to have the other removed as executor.

Result: Each executor has had to engage their own lawyer, which has resulted in long delays in the administration of the Estate and two sets of legal fees diminishing the amount left to be paid to the beneficiaries.

·         Will-maker appointed a family member who they had no relationship with, and the Will maker did not communicate with the appointed Executor to advise they had been appointed.

Result: We had to undertake a significant amount of work to locate the Executor who given the estranged relationship with the deceased, did not want to act as Executor. Administration of the Estate was delayed until the Executor could be located and their position renounced which incurred significant legal fees to the Estate before we could even apply for Probate.

·         Will-maker appointed an older sibling as their Executor and did not appoint any alternative Executor. Their sibling pre-deceased them and the deceased had no children or close relatives.

Result: A distant relative stepped in and made application to be the Administrator of the Estate. This may not have been whom the deceased wish to administer their Estate.

·         Will-maker appointed one of their children, and Wollerman Shacklock Lawyers as their Executor. There was conflict amongst the family and children, particularly toward the sibling who was appointed as Executor.

Result: Having the balance of a family member with our office acting as Executors, assisted in minimising the conflict between the beneficiaries. The remaining beneficiaries had confidence knowing our office was ensuring the Estate was administered in accordance with the Will. This kept legal fees down and negated the likelihood of a claim against the Executor or the Estate had we not been appointed joint Executor.

Final Thoughts

Choosing an executor is just as important as choosing how your assets will be distributed.  The right executor can ensure your wishes are respected, your loved ones are protected, and your estate is administered efficiently. The wrong choice can create delays, disputes, and lasting family conflict.

Whilst doing a cheap Will sounds appealing, obtaining legal advice on all aspects of your Will is crucial. When you come to Wollerman Shacklock Lawyers, we discuss all aspects of Estate Planning with you, including the consequences when you pass, so you can make informed decisions about your Estate Plan. Having your Wills carefully drafted by our firm can significantly minimise the risk of your Estate and family ending up in turmoil. If you need to make a Will or change your existing one, be sure to contact our office today.