Choosing an executor
Anna Hacker, national manager, estate planning, at Australian Unity Trustees, believes care must be taken when choosing an executor.
“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,” said Ms Hacker.
Choosing a next of kin is one option for an executor and a popular one in Australian families.
Naturally, professionals like Ms Hacker point to the downfalls of this option.
“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,” said Ms Hacker.
Passing the baton
If someone is named as the executor, it is important they make the decision early to accept.
While it is legal to renounce the role and pass it over to a trustee company, this has to be done before acting in the role.
“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’,” said Ms Hacker.
“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,” said Ms Hacker.
No mates rates
While people avoid professional executors due to the costings involved, Australian Unity has warned that many trustees expect payment for their time.
“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,” said Ms Hacker.
“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,” said Ms Hacker.
For more information about how to best plan a will, click here.