| choosing your executors |
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INTRODUCTION So, you’ve decided to make a Will? This small act is one of the most prudent things you can do. At Clegg Manuel, we understand that this can be a daunting prospect. As well as possibly introducing thoughts of your own mortality, it can give rise to more immediate and tangible queries. “How should I divide my estate?”, and “How ought I provide for my family?” are the most common refrains, followed closely by: “Who will be responsible for my affairs after I’m gone?” Determining how best to distribute your belongings and provide for your loved ones are highly important decisions, which can usually only be resolved by you alone. However, while equally important, choosing an Executor need not be such a difficult matter. We have prepared this note to guide you through the options available in this regard, and to give you a better understanding of the role that Executors play, so that you can make the choice best suited to your, and your family’s, needs. ADMINISTRATION OF AN ESTATE When you die, your estate must be wound up. The winding up of an estate can generally be broken down into the following steps:
This practice is known as the “Administration of the Estate”, which refers to all of the steps which need to be taken before your estate can be completely wound up. An estate is wound up by a person’s Personal Representatives (“PRs”). PRs fall into two categories: · those appointed according to a persons will (“Executors”); and · those appointed by law where there is no will, or no valid appointment in the will (“Administrators”). The proper and efficient administration of your estate will depend upon your PRs. It is thus highly important that you give due thought and consideration to the people you name as your Executors. EXECUTORS AS TRUSTEES Your Will might create a trust, either deliberately, or unintentionally (eg, where a gift passes to a child, and there is no provision for him giving good receipt, the gift will be held on trust until he reaches 18). If this is the case, then you will need to appoint Trustees. It is often convenient – and almost always practice – to nominate the same people as both Executors and Trustees. Such people will act as Executors while they gather in the assets and pay any debts. When they have completed this stage, they then transfer the property which is to be held on trust to themselves in the new capacity of Trustee. HOW MANY EXECUTORS? There is no maximum number of Executors who you can name. However no more than four can apply for the Grant of Probate (that is, the certificate granted by the Probate Registry which authorises your Executors to deal with your assets) thus there is little point in appointing more than this number. The minimum number is one Executor, which often suffices for a small, simple estate. However, keep in mind that a sole Executor might pre-decease you or be unable to act for some other reason. It is therefore recommended that you appoint at least two Executors, or name a substitute for a sole appointee. If the Executors will also be Trustees, it is recommended that you chose at least two so that they can give a good receipt for the proceeds of any sale of land held in trust. WHOM TO CHOOSE? You may choose any combination of: a. non-professional individuals (eg friends or relatives); b. professional individuals (eg your solicitor or accountant); and c. institutional bodies (eg banks or trust corporations). However , while you may chose any person you wish as Executor, a grant will not be given to a minor, a convicted criminal or a person of unsound mind. It is advisable also not to choose a family member of a senior generation – however this discretion rests with you. A. NON-PROFESSIONAL INDIVIDUALS Choosing a friend or relative whom you can trust has the obvious advantage that the person responsible for winding up your estate will probably be familiar with you and your affairs. Family members in particular will be personally driven to ensure the speedy and efficient administration of the estate. There is an added cost advantage also, in that this person is unlikely to charge for the work s/he does. However, where the estate not straightforward, and its administration requires some form of expertise, it is likely that a non-professional executor will have to employ a solicitor. (For instance – all estates require accounts to be prepared, to establish whether or not Inheritance Tax needs to be paid. The rules relating to this tax are elaborate and complex, and their application will often require specialised assistance.) In addition, individuals appointed may have died before you, or be unable or unwilling to act (which is why it is recommended that a substitute executor should always be named). B. PROFESSIONAL INDIVIDUALS Choosing a professional – such as a solicitor or accountant with whom you have dealt previously – ensures that the executor will have the necessary expertise to administer the estate, and relieves friends and relatives of the duty at a time when they will be grieving. Further, appointing the partners of a professional firm (of whom those familiar with your affairs will act) has the advantage of ensuring continuity of executors, notwithstanding the death or inability to act of one or more. Note however that a professional will expect to be paid for the time spent dealing with the estate, as well as reimbursement for expenses accrued. C. INSTITUTIONAL BODIES Another option is to appoint a Bank or Trust Corporation. These have the same advantages – expertise and continuity – as professional individuals. However, it is unlikely that these institutions will be familiar with you or your affairs, and may seem large and impersonal to your surviving family. Further, as with professional individuals, banks and trust corporations will expect to be paid for their services, and generally charge a percentage of the value of the estate. Many have further charges on top of this dependant on the complexity of the estate, and the amount of beneficiaries to be dealt with. These can add up to a significant expense on the estate. OUR RECOMMENDATION To ensure a mix of familiarity and personal understanding of your affairs, with professionalism and expertise, we recommend that you appoint both non-professional and professional executors – eg a close friend or family member, and a solicitor or accountant in a firm familiar to (and with) you. The number of executors you wish to chose is up to you, however in our experience one personal nominee and one professional one, with a personal substitute in place, is generally the most straightforward and efficient option. WILL CLEGG MANUEL ACT AS EXECUTORS? Yes. If you would like to nominate the partners in our firm as Executors – either solely or with a friend or family member – we will be more than happy to act. We give you our assurance that we will discharge our duties as executors in a professional and efficient manner, having due regard at all times to your wishes, those or your family and friends, and those of any other executor you may appoint. If you would like to talk to us about this, or any other matter, please contact us via our website or by phone. We look forward to helping you as best we can. © Clegg Manuel 2008 |
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