Making A Will? Who Should Be Your Executor?
A will is a legal document that states who will attend to your affairs upon your death, and in what manner your assets will be distributed. When drafting a will it is important to carefully consider who you select as your executor.
Role of an Executor
An executor is the person who takes charge of your estate upon your death. This role can be demanding and emotionally draining. In rare cases it can take years to administer an estate. We suggest therefore that you take time to consider who would be an appropriate executor.
The primary responsibilities of an executor are to collect the assets of an estate, pay any debts and taxes of the deceased, and distribute the remainder to the beneficiaries.
The role often involves organising and paying funeral expenses, closing bank accounts, insurance policies and superannuation accounts, and may require arranging the sale of any property owned by the deceased.
Who can be an executor?
Usually an executor will also be a beneficiary of your will. Typically, a spouse, partner or adult child is chosen as executor. However, a friend, lawyer, other professional or trustee company may also act.
You may have up to 4 executors from the above categories. Where there is more than one, the executors must act jointly. It is therefore recommended if you have more than one executor, that you are assured in advance that they can work amicably together.
We recommend you consider the following qualities when deciding on your executor;
- The ability to manage money well;
- Availability of time to administer your estate;
- Someone who will consult with your family and not take sides in a dispute;
- Someone who will seek legal and financial advice where necessary; and
- is likely to outlive the beneficiaries.
We also recommend you check with the person you are considering as an executor, as to whether they are willing to take on this future responsibility. Communicating with this person also provides them with advance warning of their potential duties following your passing.
It is possible for an executor to claim up to 5% of the value of an estate by way of commission. Importantly however, where an executor is also a beneficiary of the will (which is relatively common), compensation is considered satisfied by any assets left to the executor. Therefore, a claim for compensation is unlikely to succeed in most cases.
A successful claim for commission is likely where the executor is a professional, such as a lawyer or accountant who is not also a beneficiary. These claims are usually made for 1% or 2% of the value of the estate.
To succeed, all beneficiaries of the will must be informed of the claim for commission. If they do not agree with the claim, they have the right to seek review in court. Finally, written consent to a remuneration clause in a will must be obtained from the will maker in advance of their signing the will.
The role of an executor can have significant responsibilities. You should carefully consider the qualities you want in this individual and if you are able, approach them about this before making your will.
Be thoughtful in your division of assets and try to foresee what issues or dispute may arise following your death. Don’t forget you may be obliged to provide for some individuals despite your preferences. If you make these decisions in advance, your estate will most likely be divided as you wish. In addition, a clearly written will make your selected executor’s duties considerably more manageable.
If you need help with writing your Will today, call us on 03 9480 1155 for further information or to make an appointment.
Grant has been a partner at Phillips & Wilkins since 1990 having joined the firm in 1983. He is a member of the Law Institute of Victoria Elder Law Committee.