Karen Walsh asks who’ll dispose of our property when we die, and if it’s a good idea to agree to be an executor.
An executor is the person appointed by a person in his or her will to administer the estate and take out a grant of probate to the estate of the deceased. He can issue proceedings and enter into contracts to sell land. The role of the executor is quite onerous and it is preferable to appoint more than one in your will.
Once an executor undertakes the administration of an estate, his role as executor never ceases and he will always be the executor of that estate. It is important therefore that an executor discharges his duties correctly in order to ensure that he has all the appropriate clearances and discharges to protect his position.
It is wise for the person making the will (the testator) to ask the proposed executor if he or she is willing to act. An executor is under no obligation to act. A willingness to act is always helpful.
Some duties of an executor are to arrange for all of the deceased’s assets to be valued as at the date of death, protect and insure all assets for the benefit of the beneficiaries, ascertain all debts and liabilities, extract a grant of probate to the estate, gather the assets, obtain all relevant tax clearances, prepare administration accounts and distribute the estate in accordance with the will.
Generally speaking, the larger the estate, whether in terms of property, possessions, wealth or the number of beneficiaries, the more difficult and time consuming it will be to disperse.
For example, a house, several bank accounts, or a share portfolio will all have different steps that will have to be taken to vest the assets in the beneficiaries.
That said, even small estates with few beneficiaries can become problematic if just one person contests the will. Some other complications that can arise are that some beneficiaries are difficult to locate, the deceased owned a business or had large debts, the will includes a trust or the will is being challenged by someone who feels that they were unfairly left out of the will.
The general rule is that an executor sufficiently discharges his duty where he takes all precautions which an ordinary prudent person would take in managing similar affairs of his own. An executor may not delegate the authority but he may need to employ other persons, for example, solicitors, auctioneers, and accountants etc, to help him.
Failure to perform the duties effectively could leave the testator’s assets vulnerable and worse expose an executor to liability. Executors can be sued for damages that result from acts of gross negligence or fraud.
Some risks of being an executor are as follows:
- The estate administration needs to be commenced and completed within a reasonable frame of time; failure to do so can see the executor being liable for any financial loss that the beneficiaries experience.
- As executor, it will be your responsibility to protect the assets of the estate; failure to do this will hold the executor personally liable for any damage to property that has not been properly secured or insured.
- The executor will be responsible with distributing the assets of the estate to the correct beneficiary; failure to distribute correct payments or correct distributions will see the executor personally liable.
- It is the responsibility of the executor to ensure that payments to all creditor accounts, including any taxation liabilities are paid. As executor, you are personally liable to make these payments.
Even though an executor will act in good faith, errors or disagreements can occur resulting in the executor and the estate being sued by beneficiaries or creditors. Other factors can also add to the risks faced as an executor, such as the current economy, relationships within families, and the individual personalities involved. Despite the best intentions and efforts by the executor, the expectations of the beneficiaries or creditors might not be met.
Time commitment and delay
One of the biggest drawbacks to being an executor is the amount of time it takes to properly handle responsibilities. An executor can allow a solicitor to handle many of these matters.
Being an executor takes time and energy, and requires a lot of attention to detail — in fact, it is almost solely concerned with details. Before you agree to be an executor, you should be certain that you have the time to do the job.
Once the application for probate is lodged in the probate office it may take at the very least four months to issue. These delays mean that assets cannot be accessed, such as bank accounts, to pay bills, until the Grant of Probate issues, which can cause financial hardship to the estate.
Being an executor is challenging, but someone has to do it. If that person is you, be sure to understand what you’re getting into before you agree to act as an executor. Agreeing to be the executor of a will is a bigger decision than most people realize. It is not simply reading the will and using it as a set of instructions for giving away someone’s wealth.
It is an honour to be selected as an executor. It signifies that the testator trusts you to carry out his or her final wishes and to see to their legacy. However, it is important that you accurately size up the task and your personal situation before committing to do it.
Remember, there are always other options — the testator can always find another person or multiple executors. It is far better to decline the honour for the right reasons than to take it on for the wrong ones, such as a sense of obligation.