An executor is the person who is named in a will to administer the estate of a deceased person. It is a primary requirement that an executor act in good faith and in the best interest of the estate at all times. The activities completed by an executor can be broad-ranging and can include:
- locating the decease’s original will,
- making funeral arrangements for the deceased,
- the collection of, preservation and protection of assets of the estate,
- investment of the assets of the estate,
- determining and satisfying liabilities,
- maintaining a statement of assets and liabilities for the estate,
- applying for a grant of probate from the Supreme Court of Queensland (if necessary),
- contacting beneficiaries of the estate to advise as to entitlements,
- defending the Will in circumstances of litigation being commenced,
- finalising the taxation affairs of the deceased and attending to any taxation liabilities which are outstanding, and
- distributing the deceased’s assets in accordance with the terms of the will.
This may sound complicated, because it is, and it is not for the faint-hearted. When nominating an executor, it is not always the best policy to appoint a person that is close to you as dealing with issues of emotional grief and loss may distract or complicate an already complicated process. This is a job that you do not want to get wrong as executors are accountable for the manner in which they act and should be cautious that they are not neglectful in the performance of their role.
If a person or beneficiary of a Will believes that the executor has neglected the estate or failed to perform their duties adequately, they may bring an application to the court under the Succession Act 1981 (Qld). In these circumstances, the Court can make orders as it deems fit which may include an order for damages and/or requiring the executor to pay interest and the cost of the application brought.
So, who does one choose to be their executor?
Primarily, they are required to ensure that they act in good faith and in the best interests of the estate. As such, an executor cannot deal with estate property for their own benefit or profit. If you do choose a loved one or close relative, they must have the ability to compartmentalise grief otherwise they may not function effectively. Choosing someone that is not emotionally invested is not always the best policy either as there is a large element of trust involved, and without an emotional tie, trust is based on an element of faith. Given the executor role is, in essence, the ‘closer’ of a person’s life, that is, they sign off on all the paperwork, cross the t’s and dot the i’s, and close the paperwork trail left behind when a person passes. Suitable skills to look for are that they are familiar with paperwork, processes, finances and navigating the bureaucracy of multiple government departments.
Some people choose their lawyer to be the executor of their estate. The lawyer may charge a fee for acting as executor but before doing so they must first apply to the court. This is a precautionary measure to keep things ‘above board’ and to help protect the estate from potential misuse. Other advantages are that it is unlikely that they will be named as a beneficiary, so they can also deal with estate property component. They have an ethical duty to administer the estate, they should know the legal system backwards and, depending upon the size of the estate, lawyer intervention is required regardless. More importantly, in a day and age when contesting a person’s will is more and more commonplace, it makes sense that the best person to defend it is the very person that has administered it from the beginning. Your lawyer will be up to speed, they will be familiar with the family dynamic and history, and should be able to see potential problems before they occur and plan accordingly.
In short, I find it best to make your decision about whether or not to use a lawyer, based upon two deciding factors:
- First is the commercial factor, that is the size and wealth of the property pool.
- Secondly is the human factor, that is, are there people who believe they are entitled to more.
If neither of these factors is applicable to your estate, then paying for a lawyer to administer your estate is best considered as an insurance policy. If one factor is present, paying for a lawyer is best considered a smart investment. In circumstances where both factors are present then investing in a lawyer at some stage is not a question of if, but when. Do you name a lawyer as an executor and have support from the beginning, or will you rather play catch up?
The best analogy I can think of is skydiving. Would you invest in a parachute before you board a plane or just before you jump out of the plane?