Who Should I Appoint as Executor of my Will?

I am often asked: Who should I choose to appoint as the executor of my will?

Selecting an appropriate executor is a crucial aspect of your estate planning process.

A poor choice can lead to substantial expense, delays in settling the estate, the will being contested and emotional distress for your beneficiaries and loved ones.

An executor is not obliged to accept the role of executor even if appointed in that role in the will. If an executor declines to accept the role of executor after your death or cannot act as executor then an alternate executor can step up if they have been appointed in the will.

If there isn’t an alternative executor named in the will, an application will need to be made to the court to have a court-appointed administrator take over.

The person you chose to be the executor of your will should be:

• someone you trust,
• who you know will give effect to your wishes as outlined in your Will and
• who will follow the rules set out in the law on administration of estates.

How many executors can I appoint?

You can have one sole executor or you can have more than one executor (called joint trustees).

The law allows a maximum of four joint executors to be appointed at the same time.

Appoint a Backup Executor: You should also include an alternative or substitute executor to ensure continuity if the primary executor is unable to take on the role for any reason.

If appointing joint executors to act at the same time, then they must agree on all decisions.  Therefore, you should choose co-executors that are individually trusted and also able to work co-operatively. If joint executors cannot agree someone will need to apply to the court to have one or both trustees removed to resolve the dispute. This will result in delays and significant cost to the estate, thus reducing the beneficiaries inheritances.

The more executors there are, the more likely it is there will be disagreements. This is why it is normally recommended to appoint just one or two executor and then nominate substitute executors.

Who can be an executor?

Anyone over the age of 18 years can be an executor provided they have mental capacity and are not bankrupt or in prison.

The executor of your will can be:-

1. A beneficiary of the will;
2. Your spouse;
3. Your adult child or child when they reach 18 years;
4. Other family members;
5. An independent third party such as:-
   1. Your friend;
   2. Your accountant or other financial advisor or planner;
   3. A lawyer;
   4. A professional trustee company;
   5. The Public Trustee;

or a combination of the above.

Appointing a professional executor such as an accountant, financial advisor, solicitor or professional trustee company or the public trustee will usually result in the fees for the estate administration being higher than an ordinary person being appointed.

Can an executor reside outside Australia?

Yes, but you should consider the following issues:

Appointing a trustee who resides outside of Australia comes with extra risks. These can involve extra costs and possible delays, like notarising documents and travel to Australia may be required for some tasks. Furthermore, there are notable tax implications when appointing a non-resident as trustee, including the possibility of the estate being classified as a non-resident trust for tax purposes.

At least one of the executors and trustees should be an Australian resident. If all the executors and trustees are non-Australian residents, the estate will likely be charged additional tax.

The Character of your Executor

You should consider the following when choosing the executor in your will:

• Will they respect your wishes?
• Do they have the financial skills required?
• Will they keep their finances separate to those of the other beneficiaries named in the will? Will they ‘dip into’ the estate money for their own benefit?
• It is important to appoint someone who manages their own finances appropriately.
• Will your executor be available when needed?
• Will your executor cope with their grief and stress and carry on with the duties of an executor?  Note: There is a general rule called the “executor's year”. This refers to executors having 12 months to complete administering the estate. If they haven’t completed and there is no reasonable explanation for the delay, the beneficiaries can sue the executor for compensation and ask the court to remove them as executor.
• Is your chosen executor older or younger than you? Ideally, an executor should be someone likely to outlive you and remain capable of carrying out their responsibilities.
• Does your executor understand your personal wishes and values? Many elements of administering your estate, such as burial/cremation and other funeral preferences or the distribution of sentimental belongings may rely on their discretion.
• Could your choice of executor create conflict among your beneficiaries? For instance, appointing the eldest sibling might unintentionally spark tension among other siblings after your passing and may result in litigation and delays.
• Does the executor get along well with all named beneficiaries in your will? Executors are also responsible for resolving disputes between beneficiaries. Appointing an executor who has a strained relationship with some beneficiaries may not be advisable, as it could complicate the administration process and increase the risk of disputes or litigation.
• Will they treat the named beneficiaries of your will fairly and be transparent and communicate with them. You should appoint someone who will have no issue providing a full accounting of the administration to all beneficiaries.

Should your Executor be Paid for their Time?

Being an executor can take up a lot of time. It can also be very stressful.

Executors are entitled to apply to the Court for an executor’s commission, which compensates them for the effort involved in administering the estate. If approved, this commission is paid from the estate’s residue, thereby reducing the portion available to your residuary beneficiaries.

When an estate is large, often the maker of the will, provides for a payment to the executor for their time spent administering the will.