Who Should You Appoint as the Executor of Your Will?

Choosing an executor is one of the most important decisions you make when preparing your will.

Your executor is responsible for putting your will into effect after your death. This can involve applying for probate, identifying and protecting estate assets, paying debts and expenses, dealing with property, managing tax matters and distributing the estate to the beneficiaries.

For a straightforward estate, the administration may be relatively contained. For an estate involving a family trust, business, blended family, overseas assets, disputed property or vulnerable beneficiaries, the executor’s role may continue for much longer and require a significant amount of judgement.

The right person is not necessarily your eldest child, your closest relative or the person who knows you best. The better question is whether that person has the ability, availability and temperament to administer your estate properly.

What does an executor do?

An executor is the person appointed under a will to administer the deceased person’s estate.

Depending on the circumstances, the executor may need to:

locate the original will;
arrange or assist with funeral matters;
notify banks, insurers, government agencies and other organisations;
identify the estate’s assets and liabilities;
secure property and valuable personal belongings;
obtain information about bank accounts, investments and debts;
apply to the High Court for probate;
deal with Inland Revenue and any outstanding tax matters;
maintain, insure, sell or transfer estate property;
repay mortgages and other liabilities;
manage claims against the estate;
keep beneficiaries informed;
prepare estate accounts; and
distribute the estate in accordance with the will.

Where the will creates an ongoing trust, the executors may also become trustees responsible for managing assets for children, a surviving partner or other beneficiaries over an extended period.

The appointment should therefore be treated as a practical legal responsibility rather than an honorary family position.

What qualities should an executor have?

The person closest to you is not necessarily the person best suited to administer your estate. Look for reliability, sound judgement, availability and an ability to communicate with the beneficiaries.

A suitable executor should generally be:

trustworthy;
organised;
financially responsible;
capable of understanding documents and professional advice;
willing to deal with banks, lawyers and accountants;
able to communicate with beneficiaries;
patient enough to follow the required process; and
capable of making decisions when family members disagree.

The person does not need to be a lawyer or accountant. Executors can obtain professional help with the legal, tax and accounting aspects of the estate.

However, they remain responsible for making decisions and ensuring that the estate is administered properly.

Reliability and sound judgement are often more useful than detailed legal or financial knowledge.

Should you appoint your spouse or partner?

Many people appoint their spouse or partner as their first executor.

That can be appropriate where the relationship is stable, the estate is relatively straightforward and the surviving partner is capable of managing the administration.

A spouse or partner may already understand the family’s finances and know where important records are held. They may also be the principal beneficiary of the estate.

However, the appointment should not be automatic.

You should consider:

the person’s age and health;
whether they are comfortable dealing with financial matters;
whether grief may make the role particularly difficult;
whether there are children from an earlier relationship;
whether the partner may have a conflict between their own interests and those of other beneficiaries; and
whether the will creates an ongoing trust that may continue for many years.

In some estates, appointing the surviving partner together with another suitable person can provide support and accountability.

Can an executor also be a beneficiary?

An executor can also be a beneficiary of the will.

This is common. A spouse, partner or adult child may be both an executor and someone entitled to inherit from the estate.

That does not automatically create a problem. However, difficulties can arise where the executor must make decisions that affect their own interests and the interests of other beneficiaries.

For example, an executor who is also a beneficiary may need to decide:

whether to sell or retain a property;
how estate expenses should be allocated;
whether an asset should be transferred to a beneficiary rather than sold;
how personal belongings should be divided;
whether a family loan should be recovered;
whether to defend or settle a claim against the estate; or
how an ongoing trust should be administered.

Where family relationships are strained or the will benefits people unequally, it may be preferable to appoint an additional independent executor.

Should you appoint one executor or two?

A will can appoint one executor or more than one.

One executor may be appropriate for a straightforward estate where the person is capable, available and likely to act efficiently.

The advantages of appointing one executor include simpler communication and fewer opportunities for disagreement.

The disadvantage is that there is no second person to share the responsibility or provide continuity if the executor dies, loses capacity or becomes unwilling to act.

Appointing two executors can provide:

shared responsibility;
another perspective on significant decisions;
greater accountability;
practical support; and
continuity if one executor cannot act.

However, two executors must be able to work together.

Appointing siblings who have a difficult relationship may delay the estate rather than protect it. If they cannot agree, routine decisions can become contentious and professional costs can increase.

It is usually better to appoint people who can communicate constructively than to appoint all children simply to avoid appearing to favour one of them.

Should all of your children be executors?

Parents sometimes appoint all their adult children because they want to treat them equally.

Equality as beneficiaries does not require equality in administrative roles.

One child may be organised and comfortable dealing with legal and financial matters. Another may live overseas, have limited availability or find decision-making difficult. Another may have an unresolved conflict with their siblings.

Naming every child can create an unnecessarily large decision-making group. Each executor may need to review documents, provide identification, sign papers and agree on the administration of the estate.

The decision should be based on suitability rather than an attempt to recognise each child’s place in the family.

You can explain the appointment to your children during your lifetime, particularly where you are choosing one child instead of several. This may reduce the risk that the decision is later misunderstood.

What if your children do not get along?

Existing family conflict should be considered when executors are appointed.

An executor may need to communicate with beneficiaries over many months, make decisions about property and personal possessions, and respond to questions about the will.

Where siblings already have a poor relationship, appointing them jointly can place the estate administration at the centre of that conflict.

In those circumstances, possible options include:

appointing one suitable child;
appointing one child together with an independent person;
appointing a trusted person who is not a beneficiary; or
appointing a professional executor.

The appropriate choice depends on the size and complexity of the estate, the likely areas of disagreement and the cost of professional involvement.

Can you appoint someone who lives overseas?

A person living overseas can be appointed as an executor, but practical difficulties should be considered.

An overseas executor may face issues with:

signing and witnessing documents;
proving identity and address;
opening or operating an estate bank account;
communicating across time zones;
attending to estate property in New Zealand;
dealing with banks and other institutions;
obtaining tax advice; and
travelling to New Zealand if required.

The overseas executor may also have tax or administrative consequences in the country where they live, particularly if the will creates an ongoing trust.

Living overseas does not necessarily make someone unsuitable. However, appointing at least one New Zealand-based executor may make the administration easier.

Cross-border advice may be needed where an executor or beneficiary is resident in another country or where the estate owns overseas assets.

Does age matter?

There is no need to appoint someone simply because they are older and more experienced.

The executor needs to be likely to survive you and remain capable of acting when the time comes.

Appointing someone of a similar age may be entirely appropriate, but a replacement executor should also be named.

Younger family members may be suitable if they are mature, trustworthy and able to manage the work. A person who is presently too young or inexperienced may be a sensible replacement executor for the future, provided the will is reviewed as circumstances change.

The executor appointment should be reconsidered if the person develops health or capacity difficulties.

Should you appoint a professional executor?

A professional executor may be useful where:

the estate is large or technically complex;
there is a blended family;
there is significant family conflict;
the will creates a long-term trust;
the estate includes a business;
beneficiaries are vulnerable;
there are overseas assets or beneficiaries;
there is no suitable family member or friend; or
an independent decision-maker is needed.

A professional executor may be a lawyer, accountant or trustee corporation, depending on the circumstances and willingness of the professional to accept the appointment.

Professional executors will usually charge for their work. That cost needs to be weighed against the value of independence, experience and continuity.

Appointing a trusted family member together with a professional can sometimes provide a useful balance. The family member brings personal knowledge, while the professional provides administrative experience and independence.

Before naming a particular professional or organisation, you should confirm that they are willing to accept the appointment and understand how their fees will be charged.

What if your estate includes a business?

A business interest can require prompt decisions after the owner’s death.

The executor may need to deal with:

employees;
co-directors or business partners;
company shares;
banking arrangements;
personal guarantees;
insurance;
contracts;
business debts;
access to records and digital systems; and
the sale or continuation of the business.

The most suitable person to manage family relationships may not be the most suitable person to deal with the business.

It may be appropriate to appoint executors with complementary skills or to establish a separate business succession plan.

The will should also be reviewed alongside any shareholders’ agreement, company constitution, insurance arrangement and family trust structure.

What if you have a family trust?

Your executor does not automatically take control of your family trust simply because they administer your estate.

The trust may have its own trustees, appointor powers and succession provisions. A trustee company may also be involved.

Your will and trust arrangements should be reviewed together to determine:

who will become executor;
who will control the power to appoint trustees;
who will own shares in any trustee company;
who will become a director of that company;
whether your estate owes money to the trust;
whether the trust owes money to you; and
whether the same people should control both structures.

Appointing the same people may simplify matters. In other cases, it may concentrate too much control or create conflicts.

The answer depends on the trust deed, the estate plan and the family circumstances.

What if the executor cannot or will not act?

A person named as executor may die before you, lose capacity, become unavailable or decide that they do not want to act.

Your will should therefore appoint at least one replacement executor.

The replacement appointment should be drafted clearly so that there is someone able to act if the first choice is unavailable.

An executor who does not wish to act may be able to renounce probate, provided they have not already taken steps that amount to accepting the role. An executor should obtain legal advice before dealing with estate assets or signing documents if they are considering renunciation.

Where no appointed executor is able or willing to act, it may be necessary for another eligible person to apply for letters of administration with the will annexed. This adds complexity and may mean that the person administering the estate is not the person you would have chosen.

Can an executor be removed?

Once an executor has begun administering an estate, it is not necessarily easy for them simply to resign.

In appropriate circumstances, the High Court can discharge or remove an administrator, including where the person is incapable, unfit to act or where removal has become expedient.

Court involvement adds cost and delay.

Choosing carefully at the outset, appointing suitable replacements and reviewing your will when circumstances change can reduce the likelihood of this becoming necessary.

Is an executor the same as a trustee?

The roles often overlap, but they are not always identical.

The executor administers the estate following death. The executor gathers the assets, pays the liabilities and carries out the terms of the will.

A trustee manages property held on trust after the initial estate administration.

For example, the will may direct that:

a child’s inheritance is held until a specified age;
a surviving partner has a life interest in the home;
money is held for a vulnerable beneficiary; or
part of the estate remains invested for several beneficiaries.

The people appointed as executors are commonly also appointed as trustees. This allows them to continue managing assets after the estate administration has been completed.

Where the trust may continue for many years, the suitability of the person as a long-term trustee should be considered separately from their ability to administer the estate.

Is an executor the same as a testamentary guardian?

No.

An executor deals with the estate and the administration of the will.

A testamentary guardian has a role in relation to the upbringing and welfare of a child.

The same person can be appointed to both roles, but this is not necessary.

The person best suited to make financial decisions may not be the person best suited to act as guardian. Separating the roles can also provide some accountability where the executor or trustee manages money for the child’s benefit.

Should you ask the person first?

It is sensible to discuss the proposed appointment with the person before completing the will.

The conversation should cover:

the general nature of the role;
the likely complexity of the estate;
whether a family trust or business is involved;
who the beneficiaries are;
whether there is any existing family conflict;
where important documents are held; and
whether the person is willing to act.

The executor does not need to know every detail of the will, but they should understand that they have been chosen and know where the original will can be found.

You should also review the appointment periodically. Someone who was suitable ten years ago may no longer be the best choice.

How should you choose?

When selecting an executor, consider:

Is the person trustworthy and financially responsible?
Are they likely to be available and capable when needed?
Can they communicate appropriately with the beneficiaries?
Can they make decisions under pressure?
Do they have any significant conflict of interest?
Can they work with any co-executor?
Are they based in New Zealand?
Is the estate likely to involve a business, trust or ongoing investment?
Is independence needed because of family conflict?
Who should act if the first choice cannot?

There is no single correct appointment for every will.

For one person, a spouse may be the natural choice. For another, an adult child may be better. A blended family may benefit from an independent executor, while a business owner may need two people with different skills.

The executor appointment should reflect the work that will actually need to be done.

How we can help

We help clients choose appropriate executors as part of preparing or reviewing their wills.

This includes considering:

the likely work involved in administering the estate;
the suitability of family members or other proposed executors;
whether one or more executors should be appointed;
whether an independent or professional executor is needed;
succession for family trust control;
business interests;
overseas executors or beneficiaries;
life interests and ongoing testamentary trusts; and
appropriate replacement executors.

A carefully chosen executor can make the administration of an estate more orderly and reduce the likelihood of delay or family disagreement.

Deeanah Winders is an Auckland based lawyer advising on wills, enduring powers of attorney, family trusts and estate administration.

Posted in What Goes Into Writing a Will?; Posted 18 days ago