When asked who they wish to deal with the administration of their estate, most people will select family members or professional advisers.
But what's not always apparent is the extent of responsibilities and the risks to which they could be exposed. It may, to their surprise, involve a lot more than a few signatures. Louise Patterson gives her top tips on what to consider when appointing an executor and what you need to know if you take on the role.
1. What does it involve?
Your executors are the people whom you entrust to administer your estate, to gather your assets, pay any liabilities, including tax, and distribute your estate in line with the terms of your will. You will, naturally, wish to select those closest to you.
Most executors are keen to act, having been selected as someone you trust with your affairs, and feeling in some way morally bound to do so. However, it will not always be an easy job. It is important that both you and those you appoint are aware of the demands of the role, the types of decisions to be made and the time involved.
2. Who's best for the job?
Consider who will be best placed to deal with the job, both intellectually and emotionally. Bear in mind that if your estate is large or complex, it may take many months or even years to wind up.
The executors may have to make difficult decisions on financial and business matters and deal with complicated or divided family relationships. A death is a stressful and difficult time for all of those involved. Some family members may be surprised or disappointed by the terms of the will. Where the deceased has left discretion in the hands of the executors – for example, in the distribution of personal items – the executors could find themselves subject to the demands of many different parties.
3. Avoid arguments
You should select those people you feel will be able to work together with as little conflict as possible.
Appointing an odd number of executors will prevent stalemate in the event of a disagreement, as a majority can make decisions. It can also be beneficial to appoint a professional eg a solicitor or accountant, who has no personal interest in the estate, to provide a reasoned, informed voice if disagreements do arise among family members.
4. Consult in advance
Check at the time you make your will that the people you wish to appoint are happy to take on the role. Not only will this prevent delays in the administration of your estate if those you have appointed only find out upon your death and decide not to act, but it also means that those you have chosen can familiarise themselves with your affairs and your wishes during your lifetime. This can greatly assist them in making the right decisions regarding your estate after your death.
5. Placate the disgruntled
Executors could become personally liable if a disagreement within the family results in a challenge to the will, especially where they themselves have no beneficial interest in the estate. Such a challenge immediately makes the executors' task more difficult and if the challenge goes as far as court, could impede the administration of the estate for some time. The executors' conduct in dealing with the challenge will be closely scrutinised and if they are considered not to have acted as they should, then they could find themselves personally liable for the costs.
Recent English case law has focused on whether or not the executors had adopted a neutral stance. The emphasis in Scotland is much more on whether the executors have acted reasonably in all the circumstances.
6. Don't do nothing
Above all, the executors have a duty to administer the estate. Doing nothing is not an option and delaying matters will not be looked upon favourably.
7. Consult with beneficiaries where possible
If the beneficiaries of the will are of full age and capacity, the executors should consult them and take account of their views. If there are minor beneficiaries or those who do not have capacity, the executors may have no choice but to defend the action.
8. Recover the costs
If the beneficiaries wish to defend an action, the executors should consider seeking from the beneficiaries personally in relation to costs.
9. Take qualified advice
The executors should take properly qualified advice. If they do this and follow the advice, it will be extremely difficult to persuade a court that they have acted unreasonably.
10. Watch the bottom line
All parties must keep a close eye on the costs of any action and their relationship to the value of the estate.
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