MEDIA RELEASE Being an executor of an estate is an enormously important role with a significant impact on the lives of those named in a Will, and it is vital the right person is appointed, says Anna Hacker, National Manager – Estate Planning at Australian Unity Trustees.
“Choosing an executor is one of the most important decisions in the estate planning process, but sometimes the choice is made without fully considering the consequences.
“Being an executor can be a time-consuming and complicated role and agreeing who will take on this responsibility when drafting an estate plan is vital.
“It’s tempting to pick a family member or close friend, but due consideration must be given to whether they have the time, the interest or even the ability to take on the role.”
Ms Hacker said that she is surprised at how nonchalant people can be about choosing an executor.
“I’ve seen situations where people haven’t bothered to tell the person they have nominated to be their executor. It comes as a huge – and sometimes unpleasant – surprise when they realise they have been given this duty.
“Some people simply may not want to take it on. It’s far better to find this out before finalising an estate plan, so that a more appropriate executor can be selected,” Ms Hacker said.
If someone is named as executor in a Will, but doesn’t want the role, they can renounce and have, for example, a trustee company take over. But the decision needs to be made early, before any action is taken by the nominated executor.
“If the chosen executor starts to act in the role – for instance, contacts banks or credit card companies in the role of executor – they are considered to have “intermeddled”.
“Once people have started to take steps to manage the estate, it becomes extremely difficult for them to then renounce the role and, if they do not want to continue as executor, their only option is to apply to the Court to be removed.
“They may then be financially responsible for any losses or expenses that have occurred as a result of their decision to renounce.”
Ms Hacker said that while people often think that a professional executor – such as a trustee company or lawyer – will be expensive, it can be a false economy to choose family or friends.
“Increasingly, family members are likely to ask for a payment for acting as executor, particularly if there is conflict and the estate administration is complex.
“If it’s likely the estate will end up paying someone to act as executor given family dynamics and complexity, it’s worth considering whether it’s better to go with a professional executor from the beginning.
“A key advantage is that an independent executor brings impartiality to the table, and will follow the terms of the will, rather than be influenced by their own biases, and carry out the wishes of the Will-maker.
“If the family conflict ends up in court, the costs can quickly sky-rocket, and will usually come out of the estate. Avoiding this with a professional executor can be a much more cost-effective option,” Ms Hacker said.