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Choosing your beneficiaries — the people or organisations who will inherit your property after you die — is often the decision at the forefront of a willmaker’s mind.
But there is another decision that is arguably even more important to consider when it comes to making your will, and that is deciding who will be your executor (or executors).
The executor is the person named in the will who is responsible for ensuring that the deceased’s instructions are carried out in accordance with their will, and with administering the estate.
An executor’s typical duties include arranging the funeral, preparing and filing court documents (known as obtaining Probate), identifying all of the deceased’s assets and debts, taking care of the deceased’s tax affairs, and ensuring that, once all debts are paid, any remaining assets are given to the beneficiaries in accordance with the will.
An executor’s responsibilities, however, can be considerably more varied, time-consuming and ongoing than the above description suggests, and this is why choosing the right person or people for the role is so important.
If the deceased, for example, leaves behind young children or grants their partner a life interest in their estate, their executor can be responsible for holding and maintaining the deceased’s property on trust within the estate for years and sometimes even decades. Executors therefore need to have certain business and administrative skills to take on this responsibility.
These skills are also invaluable where the deceased is a business owner, as their executor may be required to take over their managerial responsibilities under their business agreements, such as shareholder agreements and partnership agreements.
Executors also need to have robust investigative skills. Sometimes they are required to track down the whereabouts of estranged family members, or to locate and deal with diverse types of property owned by the deceased, such as overseas pensions, share portfolios, art collections, life insurance policies and social media accounts. If the will is challenged or the executor’s decisions are challenged in court by the beneficiaries, then the executor is the one who needs to front up.
So when deciding on your executor, you should think carefully about who will be best placed to take on this responsibility, bearing in mind that your death could well be decades away.
The people who are the closest to you, such as your partner, adult children or parents, may be the ones who know you best and may have a solid understanding of your property affairs.
But these very people may also be the ones who will experience your loss the most and may therefore find taking on the sole role of executor particularly difficult.
Sometimes willmakers may decide that it is just not feasible to appoint an executor from within their immediate family and friends circle. This may be, for example, where there are complex family dynamics, where no-one in their family lives in New Zealand or where no-one has sufficient business and administrative skills, or sometimes simply where the deceased does not have any surviving or close family members or friends to appoint as executor.
For these reasons, willmakers should consider both appointing more than one executor of their will, and appointing a professional trustee as one of those executors.
A professional trustee can be a business adviser such as your lawyer or accountant, or a professional trustee organisation. And while professional trustees can charge for their services, they have the necessary experience, skills and professional detachment that will be essential in helping navigate your family through a difficult period.
- Jane Adams is an estate planning specialist at Marks & Worth Lawyers in Dunedin.