Choosing an Executor

In previous issues of Money Matters, we’ve looked at estate-planning needs and drawing up a Will.

For those sensible enough to have a properly structured Will that reflects their wishes, they will have nominated an Executor (sometimes also called a Legal Personal Representative).  Choosing the person who will take on this role needs careful consideration.

This person is appointed in the Will itself, to take charge of the estate and follow the directions in the Will.

The Executor is responsible for overseeing the funeral arrangements, and then managing the financial affairs of the estate until it is fully distributed to the beneficiaries. 

This includes listing assets and liabilities of the estate and then obtaining a grant of probate which involves the Supreme Court verifying that the Will is valid and the executor is the rightful person/s to administer the estate. 

Until this happens, beneficiaries of the Will cannot receive their legacy.

In addition, the Executor must lodge tax returns for the estate for the period from date of death of the testator until the estate is fully distributed.

It’s a role of considerable responsibility and the Executor should be carefully chosen to ensure they can fulfil their tasks properly.

One common – although understandable – mistake that people make is to choose an old and trusted friend to be their Executor.  The main problem with this is that if they die first, you need to ensure your Will nominates a back up, or you need to update your Will.  If not, the court will appoint an administrator, usually the main beneficiary.  Also, over time your nominated Executor may become frail or find it difficult to discharge their duties.

In addition, tax matters such as capital gains tax can be complicated and affect what an Executor is best to do.  Indeed, the way an Executor carries out his or her duties can make a difference to the tax position, so nominating someone who is financially aware, or prepared to take advice, is important.