When it comes time to prepare your will, it is also time to consider nominating at least one person to be the executor of your estate. The executor’s role is to administer your estate in accordance with your will. While it may seem straight forward and easy to allocate this role, it should not be done lightly, as it comes with several legal obligations and decisions that can easily be clouded by emotion.
An executor is bound by fiduciary duties as they are in a position of significant trust and confidence to both the deceased, the estate and the beneficiaries. Their primary duty is to act in the best interests of the estate and they must not allow any conflict of interest to arise between that and their personal interests.
Executors are required to follow the legal obligations set out in section 52 of the Succession Act 1981 (Qld) (Succession Act) which are to:
- collect and deal with the real and personal estate of the deceased and administer it;
- exhibit an oath in the court a full inventory of the estate and render an account of the administration of the estate where required by the court;
- deliver up the grant of probate or letters of the administration to the court when the court requires it;
- distribute the estate of the deceased; and
- pay interest upon any general legacies within the will.
An executor will also be required to perform many other broad range duties, which include but are not limited to the following:
- locating the deceased’s original will;
- distributing the deceased’s assets in accordance to the terms of the will;
- determining and satisfying liabilities;
- arranging the deceased’s funeral;
- applying to the Supreme Court of Queensland for a Grant of Probate;
- investment of the assets of the estate;
- defending the will if litigation arises;
- preparing financial statements; and
- obtaining valuations of the testator’s assets.
How to choose your executor
As an executor’s primary duty is to act in the best interests of the estate and beneficiaries, it is important to select someone that is not likely to put their own benefit or profit first. While it may seem that appointing a family member is in your best interests, choosing a close relative may not always be the best choice. The executor is responsible for dealing with your estate once you have passed on, bringing up a lot of emotion and grief for one person to deal with which could lead to a risk of poor decision making. If you are certain you want to appoint a family member, ensure they can fulfill their obligations notwithstanding their emotions, grief and relationships with other beneficiaries. However, it is equally important to avoid appointing someone who has no emotional investment as the role requires trust.
Qualities of a good executor to look out for include maturity, organisation, and integrity. Allow yourself time to observe the character of potential candidates and find out whether they have run into ethical trouble relating to their values at work or within their personal lives.
This may seem like a no-brainer, but while you may think a person is fit to be the executor of your estate, it is important to ask them if they want the responsibility. Depending on how large your estate is and the number of beneficiaries, this role can be daunting for potential executors who feel inadequate to do the job.
Examples of people in positions of trust you can choose from include a lawyer or law firm, accountant, or banker.
Appointing a lawyer as an executor
It may be beneficial to appoint your lawyer as your executor, as the relationship of trust and obligation of fiduciary duties already exist. While a lawyer may charge a fee, they are unlikely to be beneficiaries and can therefore deal with the estate property component. However, this cannot be done without applying to the Court to ensure the protection of the estate from potential misuse and the power that comes with it. If appointed as an executor, lawyers must inform you of the following matter in writing before you sign your will:
- any entitlements they or their firm may claim as commission;
- any inclusions in the will entitling them to charge legal costs in relation to the administration of the estate; and
- if they have an entitlement to claim compensation, that you could appoint a person as executor who might not have a claim for the executor’s commission.
Advantages of appointing a lawyer as an executor includes:
- they know the ins and outs of the legal system;
- they are likely to be familiar with your current affairs and be familiar with your family dynamic; and
- can battle any litigation matters that may arise.
Our wills and estates team can assist you with all aspects of estate planning, from drafting your will during your lifetime to administrating your estate and litigating family provision claims after your passing. You’ve worked hard for your wealth, let us help you ensure that your wishes are seen through.