Making a good choice
Having an executor of your will is like having a manager of your affairs (your estate) after your death. Your executor is named in your will; it is his or her role to carry out the terms of your will. Many people have more than one executor; it spreads the load and it’s also good to have another executor to discuss things with.
Who do you choose?
You can choose anyone to be your executor, but they do need some special qualities. You should consider:
Age: you want them to have the energy, ability and maturity to deal with your affairs. Sometimes this can be a fine balance – if you have someone older there’s a risk they could die before you or could become incapable of fulfilling their duties. However, someone younger may not have sufficient life experience to cope with the role.
Temperament: dealing with an estate can be quite emotional. You want your executors to be calm, steady, decisive and with loads of common sense.
How well they know you: it’s good to have an executor who knows you and, in general, understands how you run your affairs. A large part of an executor’s role can be information gathering, and having some prior knowledge can help them know how to go about this.
You can appoint anyone to be an executor; many people choose their spouse or partner and/or some of their children. Sometimes, people name someone independent as an executor, such as a long-standing friend. This can be especially useful when there are blended families or a disharmonious family situation.
Executors don’t have to manage your estate alone; your estate’s lawyer will guide executors through each step of the way.
What do executors do?
One of the executors’ first duties is making sure they have a clear understanding of the contents of your will.
Working with your family, executors are responsible for arranging burial or cremation. They must ensure that, if necessary, your home is secured, all insurable assets insured, pets are taken care of, deliveries cancelled, outgoings paid (electricity, rates, insurances) and the insurers advised if the house is empty.
If you were still working at the time you died, final paperwork and your personal items at work will need to be sorted. If you were a business owner, it may be necessary to get a trusted employee to step in, for the short term, to keep on top of things such as wages, bills, suppliers and customers.
To help wind up your estate, your executors must gather information about your assets such as bank accounts and investments, KiwiSaver and superannuation, insurances, benefits, property and motor vehicles.
It is important for executors to identify any jointly held property and any debts, such as mortgages, credit card bills and so on.
Through the estate’s lawyer, the executors must ensure that all the estate’s debts are paid. Executors are personally liable to meet these debts, unless they satisfy specific legal requirements.
When they have the complete picture of the estate, the executors can then manage the distribution of your assets to your beneficiaries in accordance with your will. This usually requires an application for probate, a court order confirming the will. The estate’s lawyer will help the executors with this.
When does an executors’ role end?
The executors’ role is completed when all taxes and expenses have been paid, and all distributions to adult beneficiaries have been made. If there are underage beneficiaries then the trustees nominated by the will step in to hold that benefit for those children until they are old enough. In practice, the trustee and executor are almost always the same person, but they do have slightly different obligations and responsibilities.
Should your executors live locally?
Your executors can live anywhere, but it does make it much easier logistically if they are in the same region, or at least close, to where you were living. This is becoming less of an issue with technology, but it’s still something to take into account.
Choosing executors is important when you are making, or reviewing, your will. They have significant obligations and responsibilities in making sure your assets are managed in the way that you intended.
If you have any queries about appointing or changing an executor, or you are an executor and have some queries, please don’t hesitate to call us.
Disclaimer: All the information published in Fineprint is true and accurate to the best of the author’s knowledge. It should not be substituted for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are the views of the authors individually and do not necessarily reflect the view of this firm. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit being given to the source.
Content Copyright © NZ LAW Limited, 2019. Editor Adrienne Olsen, e. email@example.com p. 029 286 3650