Ten things to consider when appointing the executor of your Will
Choosing the right executor is one of the most important estate planning decisions you will make. Getting this decision wrong can not only result in significant cost and delay for your estate but considerable anguish for your chosen beneficiaries.
It goes without saying that whoever you appoint should be someone you know and trust and who you feel confident will give effect to your wishes as outlined in your Will. There are a number of other important factors that will be relevant to choosing an appropriate executor and these will differ from person to person. Here are ten such factors to consider.
You may appoint up to four executors to act jointly. However, the more you appoint, the higher the scope for disagreement and the greater the cost and time involved in administering your estate (simply because more people are involved). For these reasons, we typically encourage clients to appoint a maximum of two executors but with the option of appointing “back-ups” to them.
Appointing multiple executors in different locations will increase the time it takes to get things done generally, particularly if, for example, documents have to be signed by all executors. Appointing a sole foreign executor can also have adverse tax consequences for your estate. It is important to consider the location of your executor(s) and the likelihood they may move overseas in the future.
If you intend to appoint more than one executor, they will be required to act jointly. If your executors do not know each other, do not get on or have very different personalities, there is a risk they will be unable to reach agreement about how to administer your estate, possibly resulting in a deadlock situation, or worse, costly litigation to resolve the impasse. We sometimes find that parents tend to appoint all of their children to act as executors despite the fact they simply do not get on – this can be a recipe for disaster.
Again, if there is tension present, the risk of costly disputes arising increases. In some cases, it may be preferable to appoint an entirely independent and/or professional executor who is less likely to become embroiled in the emotional side of things.
If your executor is much older than you or in poor health, there is a good chance they may die or lose capacity before you, potentially leaving you with no executor if you do not update your Will. If your executor is an undischarged bankrupt or has criminal convictions, they will need to disclose these matters to the Court in any application for probate, and the Court may decide to appoint someone else to administer your estate.
An executor is not obliged to accept their appointment and may simply renounce without giving reasons. Consequently, it is advisable to discuss any proposed appointment with your preferred executor to ensure they are willing and able to act should the need arise.
If your affairs are very complex, appointing an executor who is entirely unequipped to comprehend or manage them is not advisable. While appointing a professional executor (such as a solicitor or accountant) or a professional trustee company may be more appropriate, this will incur professional fees for your estate. You should weigh up the pros and cons in selecting a suitably competent executor in these circumstances. Furthermore, if you anticipate that litigation will be brought against your estate, it is important to consider your executor’s ability to cope with the inevitable stress associated with that.
Executors are entitled to apply to the Court for what is known as executor’s commission (or to try and negotiate commission with your beneficiaries). This is a type of remuneration for the ‘pains and trouble’ of administering an estate. While this right cannot be removed, executors administering the estate of a family member or a close friend will usually not claim commission.
While your executor’s appointment will only become effective when you die, your attorney for financial matters may (depending on the terms of their appointment) have to make financial decisions for you before you die. This may occur because, for example, you lose capacity due to age or health issues. Although not compulsory, appointing the same people as your financial attorneys and executors will typically allow for a smoother and more cost-effective transition between the two roles than will appointing entirely different people in the two roles.
As even the best laid plans can fail, it is essential to nominate one or more back-up executors in your Will. The same considerations as those outlined above will be relevant in selecting an appropriate back-up.
Finally, it is important to remember that the choice of one’s executor is not necessarily set in stone. Circumstances change over time and what may have been a suitable appointment in the past may no longer be. Will-makers should review their estate plans at least every three to five years to consider whether they remain appropriate. While you retain capacity to do so, you are free to update your choice of executor at any time. Where this is the only change you wish to make, this is usually also an inexpensive process.
If you would like assistance updating your Will or choosing an appropriate executor, please contact our experienced Estates and Succession team for advice.