What factors should I consider when appointing an executor in my Will?
The appointment of an Executor is a very important decision. It has a significant impact on the administration of your affairs after your death and also upon the dynamic of family relationships.
An Executor is in charge of you and your estate from the moment of your death. He, she or they can make decisions about the disposal of your body, your funeral arrangements and the way in which your estate is administered in accordance with your Will. He, she or they can also step into roles you occupy such as sole Directors, Trustees, Guardians or Appointors of a Family Trust or as the Trustee of a Self-Managed Super Fund.
Any number of Executors can be appointed in a Will but only four (4) can apply for Probate. Not all of the appointed Executors need apply for Probate and the opportunity exists for those appointed to choose one or two named Executors to make the application for Probate and one or more of the others can then be appointed as Reserve Executors.
It is important to weigh up the particular skill set of the people appointed, against the dynamics of family relationships. In cases where a Testator has multiple children (even if one is an Accountant or Financial Planner) it is often recommended appointing all of them, to prevent family conflict and resentment.
Executors who are not professionals can engage Lawyers to do the legal work but they can still be in charge of any decisions which need to be made in the administration of the estate. If the potential for family conflict exists by the nature of any appointment, it can often be eliminated by a discussion at the time the Will is made.
A single Executor can be appointed, but in this case it is important that a substituted Executor is appointed to act, if the instituted one is unable to act, or predeceases the Testator (Will Maker).
Solicitors or Trustee Companies can be appointed as Executors but they do not have the personal knowledge of the affairs of the deceased and they will be entitled to charge a commission which can be based on a percentage of the value of the realised assets of the estate. Such an appointment is usually only necessary in the case where there are no family members who can assume the role of there is an expectation of family conflict.
It is important to be aware that the appointment of a sole Executor who resides overseas and does not pay tax in Australia my attract the tax laws of the country in which the foreign resident executor lives. This tax is payable on the value of the estate and could be a significant amount. It is important to have at least one Executor who is an Australian Resident.
If you need any advice on who to appoint as your Executor, please ask our Wills and Estates Team by contacting them on 9870 9870.