The Executor and Trustee of your Will is a person, or more than one person, who you appoint to carry out your wishes as contained in your Will. They must apply for a grant of probate of your Will which means they must prove they are who they say they are, how much the estate is worth and that the Will is valid and then the Court issues them with their formal seal of approval.
At that point, the Executor stands in your shoes, legally speaking and can deal with your assets as if they owned them themselves. Of course they must use those powers only to give effect to your wishes in your Will but they must also use those powers to pay debts, call in assets, commence claims that need to be commenced, and a thousand other tasks.
It is a big job, even for a simple estate. For big estates and complex estates it can practically be a full time job. Many executors do it for the love of the deceased, but they can also charge a commission for their work, and this needs serious consideration.
The work of the executor includes liaising with family and business associates, coordination of beneficiaries’ gifts and distributions, opening and closing bank accounts, advertising for creditors, organising insurance, performing an inventory (that alone can take weeks in some cases), protection of assets, preparation of statements, preparation of accounting and instructing accountants to do tax returns, selling shares and real estate, calling in debts, commencing legal action against outstanding debts, court applications for a grant of probate, and establishment of trusts as contained in the Will.
This last one, establishing trusts, can be a job that lasts decades. For example, if I have a two year old child and you are the executor and trustee, you must run that Trust for the next 16 years until the child reaches adulthood. If I have a child with a disability, a serious health issue or particular needs, their inheritance might need to be held on trust for them for the rest of their lives. That could be 80 years.
Additionally, there are a host of laws and regulations Executors must comply with including the Administration Act, the Non-Contentious Probate Rules, the Trustees Act, if there are companies in the estate the Corporations Act and many others.
If an executor makes an error that involves fraud or dishonesty they will be liable. They will also be liable personally if they distribute the estate be fore all the debts are paid, and if they can’t claw it back from the beneficiaries who have it.
The executor’s duties don’t necessarily end on distribution to the beneficiaries either and the trusts that can last for decades are long tailed examples of that. There may for instance be an annuity for a spouse or a life interest in a house, which only ends when the spouse dies, and then the house must be sold and only then do the residuary beneficiaries get their share.
Be careful who you choose as executor. You might trust your sister, but she might be hopeless with detailed administration tasks, which will occupy her life for years to come in administering your estate. Talk to us about who in your circle would be best to have in this role, it requires a very particular skillset and dedication.
Likewise, you might be giving all your estate to your spouse, but will they be able to handle the job during a time of intense grief? It is not uncommon for the role of executor to be completely overwhelming for some people, which can cause delays to the administration of an estate for years.
We have seen in some families that because it was all too hard, that assets such as real estate just sit there, untenanted, uninsured, falling into ruin for years until something comes to a head, usually on someone else’s death resulting in a new line of beneficiaries crying for their inheritance, which still hasn’t been dealt with after years.
You cannot force someone to accept the role as executor, it is voluntary. But once a person starts down the road of dealing with assets, and so starts acting as executor, even if probate is not yet granted, they then are locked in. It is very hard to get out of being an executor once you have started dealing with the assets and you need the approval of the Court – and you can’t just appoint anyone you want in your place.
It may be unwise to appoint someone significantly older than you, and sometimes you need to appoint two or more to work jointly – this can help reduce the labour of each person but also allows for a check and a balance on their actions so that neither does anything which is a conflict of interest. This means that sometimes it’s not the best idea to appoint a beneficiary as executor, especially if you suspect that there are going to be fights and which then puts the executor/beneficiary in a difficult position.
It is also ideal to have your executor located in WA as this assists with administration, although there is no prohibition on an executor being located outside WA.
Having an executor who you trust can also allow you to deal with your digital assets. Such things as passwords, ebay accounts, gmail account, online share trading, Facebook, Instagram, Qantas frequent flyer points, and those thousand other digital assets we all now hold. Create a list including your login details and instructions on what you want to happen to them – transfer the points? Download the Facebook photos and distribute to certain beneficiaries? Close them down and forget about them? Your executor is going to have to deal with this too, so make it as easy for them as possible and so they don’t have to engage a tech expert to hack into your home computer to find your passwords (these days a pretty routine job for an executor).
Some people’s estates are just plain old quick and simple to solve, some are unbelievably complex and require deep thought and knowledge. You don’t really know however unless you dig in and get an expert like us to evaluate your estate or estate planning duties with you.
We’re here to help, just ask us. We look forward to hearing from you.