When it comes to estate planning, it’s not uncommon for people to confuse a few very important roles. In this podcast, Estate Planning Solicitor Elise Jaques clears up the differences among estate planning roles.
TRANSCRIPT
Speaker 1:
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Dan:
When it comes to estate planning, it’s not uncommon for people to confuse a few very important roles. In this podcastm I’m with Elise Jakes and the estate planning lawyer from Big Law.
Dan:
Elise, what is the difference between an executor and an attorney?
Elise:
That’s actually a great question, Dan, that we get from clients a lot. So an executor is someone that’s actually appointed under your will, which obviously comes into effect upon your death. Your executor is responsible to administer your estate and attend to a distribution of it. In comparison, an attorney is appointed usually under enduring power of attorney. What that means is if you lose capacity, your attorney could be appointed to make decisions about your personal, including health matters and or your financial matters.
Dan:
So what does an executor actually do?
Elise:
So generally the duties and responsibilities of an executor include reducing the assets of a deceased person into possession or collecting the assets, attending to the payment of the debts of the deceased and the administrative expenses of the estate. And finally attending to the actual distribution of the estate after the payment of any debts, to the beneficiaries who are actually named under the will.
Dan:
What about the requirements that someone may need if they’re going to be appointed or take on the position of executor? Are there conditions?
Elise:
So firstly, Dan, an executor must be 18 years of age to act. It’s also a good idea to consider appointing an executor who lives close to you, or at least in the same state or territory as you. Whilst that obviously doesn’t preclude you from appointing a person as your executor, it’s something to consider having regard to the practicalities of signing documents and forms. One of the most important things to consider when appointing your executive though, is that they should be reliable and honest. So you should trust that person or persons will act in the best interest of your estate.
Dan:
What about appointing more than one executor? I mean, firstly, can it be done? And secondly, is that a good idea?
Elise:
Ensure yes, you can appoint more than one executor. However, you shouldn’t appoint more than four executors to act at the one time. It is a good idea to appoint more than one executor and we recommend you do so, but you do need to consider how your executors are going to act. If you actually appoint more than one. This is important because essentially the law stipulates that if you appoint more than one executive to act at the same time, then they must act jointly. So you should think about if your executors would be able to make unanimous decisions regarding your estate. If it’s unlikely, they would be able to agree. Then obviously you should rethink appointing them. The other thing to consider is you could actually appoint your executors successively or simply having a backup executor. What that means is if person A died before you or they were unable to act as your executor, or they simply didn’t want to act, then person B would be able to step in and act as your executor in those circumstances.
Dan:
Is there anything else that someone should be sort of contemplating when appointing an executor?
Elise:
So it’s usually a good idea, Dan, to speak with the person or persons you intend to appoint as your executor to ensure they would be willing to act whilst it’s not an actual requirement that you obtain their approval, there’s going to be little point appointing someone who doesn’t actually want to act as your executor.
Dan:
At least, is it worthwhile in this consideration to be discussing your choice of executor with your lawyer,
Elise:
It is, it’s a good idea to discuss, as I said, are they going to be act able to act together? Sometimes if a brother or sister just don’t get along or don’t see eye to eye, then there’s going to be complexities, obviously in them being able to make decisions jointly. In which case we can discuss, is there someone else who would be better? Perhaps a third party or a family friend or someone that’s close to you and you trust who could act as your executor in that circumstance.
Dan:
Elise, thanks for joining me.
Elise:
Thanks Dan.
Speaker 1:
Thanks for listening. Need further information? Visit us biglaw.com.au.
