Apart from drafting a Will or Will substitute, the most important step in your estate planning is choosing the right executor or executors. This is so because the person you choose will be required to carry out your last wishes, preparing your income tax returns, dealing with your next of kin, carrying out your burial wishes, securing your assets and disposing of your property. The executor/trustee must wear many hats such as an accountant, investment advisor and peacemaker among rival factions. An executor has a lot of influence and a lot of power so it is in yours and your beneficiaries’ interest to choose someone who has a good business sense, who can make sound decisions, and above all, someone who you trust.
Before choosing the executor, it is advisable t talk to the executor n advance to make sure that he or she is willing to undertake such an onerous obligation that could go on for a year or more. An executor who has not been made aware ahead of time of his or her executorship role is not obliged to act upon your death. In such a circumstance, the Court will be required to choose an “administrator” to administer your estate according to the terms of your Will. This person may not be the one would want administering your estate.
An executor should have some knowledge or expertise about what it means to be an executor. If they do not, it is important they have access to an accountant or a lawyer who does have experience with estate administration. Picking the right person will often insure a smooth administration but choosing the wrong person could result in disaster. You should provide an executor with a copy of the Will, a list of your assets and other pertinent information such as your income tax returns, which lists the source of your income, location of any safe deposit box, computer passwords, etc. This will make the executor’s job much easier and straightforward than leaving it for him or her to go through your personal papers in order to find out the relevant assets and beneficiary information.
Age is certainly a factor in appointing an appropriate executor/trustee. If the executor is your age or older, it is very likely that person will die or be incapacitated before you. In such a case, the Court again will be asked to appoint someone in that person’s place.
It is not always wise to choose a relative or children as executors. Even though they are family, they may not be trustworthy. The writer has seen a number of lawsuits where children sued their brother or sister over an estate because it was badly or fraudulently managed. If you feel you must select children, do not just select one child as it can lead to resentment and accusations of favouritism. It is often best to name a trusted family member as a co-executor along with a child or children just so there is an objective third party there at the time decisions have to be made and one who can perhaps smooth out differences of opinion where the opinions between the siblings clash.
There are other factors that a person should consider when choosing an executor. The following are some of the circumstances:
- Is there a conflict of interest or potential conflict of interest?
- Will the executor have the time to do the job and do it properly?
- Is the executor likely to be biased in favour of one or more beneficiaries?
- Where the distance between yourself and the executor make it difficult for the executor to attend to matters without significant travel expenses and time away from home?
When it comes to drafting Wills, people are often reluctant to talk about their family and their expertise or ability to undertake the administration of an estate. This is where the advice of a professional will come in a very important as he or she can tactfully ask the right questions in order to determine who would likely make the best executor(s). He or she will be able to weigh the respective strengths and weaknesses of the candidates. If there are no adequate family members or outside friends, then possibly the choice of a corporate trustee will be the wisest choice. The costs of using a corporate trustee may be higher but in certain circumstances where there are volatile relationships between family members or the assets held and owned by the deceased are complex in nature, a corporate trustee can be a wise choice.