This article explains what you should first consider before appointing an executor in your Will, and what the role of executor involves.
What is an Executor?
An Executor is an individual or a group of individuals who have been named in your Will for the purpose of carrying out your wishes upon your death.
What is an Executor’s role?
Your Executors will be responsible for settling any debts, including funeral and testamentary expenses, and any Inheritance Tax which may be chargeable upon your estate. They will have the authority to obtain a Grant of Representation (that is, the proving of your Will at the Probate Registry) and to collect in and distribute your assets and money to the named beneficiaries in accordance with your Will. In some instances, they may even be required to sell your property.
How do I choose an Executor?
Who you choose to appoint to be your Executor is an important decision and should be carefully considered. So who should you choose?
First and foremost, whoever you appoint, should be someone that you trust. They will be quite heavily involved with your personal and financial affairs and so you must be confident that they will act in your best interests.
You can name up to four individuals provided they are all at least 18 years of age. However, it is worth considering the practicalities behind the number of persons you choose to appoint since they will have to act jointly. The more individuals appointed, the more chance there is of a potential disagreement or conflict between them.
It is also sensible to appoint more than one individual in case a sole Executor is unable or unwilling to act. For example, if they were to predecease you. Appointing at least two individuals, is also beneficial should a trust be set up in your Will. More often than not, your Executors will be appointed as your Trustees and in order for a trust to work effectively, there must be at least two in number. A trust may arise if you leave money to a minor. In this case your Trustees will be responsible for arranging that money to be held on behalf of that minor until they reach the stipulated age.
You can, if you wish, appoint individuals to be your Executors who have also been named in your Will as beneficiaries. In fact, it is very common for individuals to name their spouse, civil partner and/or children to be their Executors, as well as naming them as a main beneficiary/ies of their estate.
Whilst it is not always possible to foresee any problems, it is always advantageous, where you can, to choose a group of individuals that get along with one another. If Executors do not see eye to eye, this may make the process even more difficult and could result in delays.
If appropriate, you should also consider appointing replacement Executors. A replacement Executor will step in and act if some or all of your Executors are unable or unwilling to act. You could for example, appoint your spouse to be your sole Executor and if they are unable or unwilling to act, then your children could step and act in substitution. This may be beneficial if you choose an elderly family member, such as a parent, who you would want to act now, but at the time of administering your estate may be unable to.
Does it have to be a family member or friend?
You can appoint a professional to be an Executor. This could be for example, Solicitors in a law firm, or Accountants. In rare circumstances, you can appoint the Public Trustee, a Government official which has the authority to manage and administer an individual’s estate.
Whilst it is helpful to have an understanding of the law and the tax implications involved, it is not a requirement. Your Executors can, if they wish, appoint a professional to assist them with some or all of the administration of the estate. Lay Executors do not therefore have to act alone. However, appointing someone who is organised, reliable and who has preferably some legal or financial knowledge would be beneficial.
There are various reasons why it may be beneficial to appoint a professional and a few examples are set out below:-
- The loss of a loved one is always hard, and family and friends often find it difficult to carry out their responsibilities as an Executor, whilst they are still going through the grieving process themselves. To take some of that pressure away, some individuals prefer to appoint professionals to act straightaway instead. This helps to alleviate some of the onus away from close relatives and friends by passing the responsibility onto a professional who would have the experience to handle your affairs.
- If an estate is complex, it may be best to appoint a professional. This may be for example, where there is farmland, foreign or business assets, high net worth assets, and/or simply a large number of assets. A professional will have an understanding of the law and will be aware of the tax implications and available reliefs.
- In some cases it may not be possible to find someone that is suitable, willing, or able to act and therefore a professional may be the best solution. Individuals with a criminal record, those who have been declared bankrupt or insolvent, or individuals who have an illness or disability that prevents them from acting, may not be deemed suitable for taking up position as Executor. It could however be quite simply that an individual has work commitments and would not be able to devote their time, or they may live abroad, in which case it may be unrealistic for them to take up this position. Acting as Executor can be quite time consuming and can take a number of months, even years, and so it can be deemed as quite a burdensome role by some individuals.
- Appointing a professional may be necessary if not all Executors will be able to work amicably together. For example, you may have three children but only wish to appoint two of them. However, the family dynamics may be disrupted if you do not appoint the third child. You could in this instance, appoint all three along with a professional. In this instance, the professional could act as a neutral third party and can take more control over your estate.
What about costs?
Whether a professional is appointed as an Executor, or simply instructed to assist an Executor, this will incur a fee. How much a professional will charge, will be dependent on a number of factors, including, but not limited to, the firm’s charging structure, the size of your estate and the time and work involved. Such expenses can be reimbursed however, from available funds from the estate.
Unless expressly detailed in your Will, individuals will not be entitled to get paid for acting as your Executor. Whilst there is no legal obligation to, some individuals choose to leave a monetary sum to their Executors in their Wills that is conditional upon them taking up position as an Executor.
With respect to testamentary expenses, Executors may claim out of pocket expenses, but it is advised that they consult with any beneficiaries before they begin incurring any significant expenses. It is also advised that they keep a record of all expenses personally paid for. They may then be reimbursed from available funds from the estate.
One final note to make is that it is worth considering that whoever you choose to appoint, whether they are acting in a professional capacity or not, you discuss this with them first to ensure that they have a willingness to act.
Making the right decision now can save your estate a lot of money in the future and will ensure the administration of your estate is dealt with as quickly and efficiently as possible.
If you would like to discuss the preparation of Wills and the appointment of Executors, please contact one of our Wills and estate administration experts who will be happy to assist.