An executor is the person appointed in a Will to execute, manage, administer, direct, and dispose of his or her estate. Depending on the complexity of the estate an executor may wish to engage an expert with experience in the legal tax and accounting requirements.
Many people when nominated as an executor are unsure of what is expected of them. An executor usually;
- assists in making funeral arrangements,
- locates the Will and applies for probate,
- determines who are the beneficiaries,
- collects the assets,
- settles debts,
- distributes assets according to the Will,
- prepares and manages accounts and tax returns.
In some cases an executor may have to defend the estate against litigation.
If you want to appoint an executor that you believe is capable and interested as acting as executor who is not a beneficiary of the estate (usually a friend or relative) you should discuss this with them prior to the Will being made.
The simple answer is that the executor is the person named in your will to administer your estate after you die. The executor is responsible for managing the estate, protecting its assets, and carrying out your wishes.
You can name as many executors in your will as you like, sometimes people name a solicitor as an executor, but this isn’t necessary. It should be noted that the executor can be held personally responsible for mistakes made in the administration of an estate and may consult as many experts as they believe is necessary.
The duty of the executor is to complete the administration of the estate so that the creditors can be paid and the remaining assets handed over to beneficiaries as soon as reasonably possible, whilst complying with the laws of the state that govern the administration of deceased estates.
In most cases the person appointed as an executor is beneficiary under the will. In certain circumstances there could be good reasons to appoint an executor who is not a beneficiary under the Will, either a friend or relative, or if the estate is large and/or complex a professional executor (who normally takes a percentage of the value of the estate.)
Bob Marley died intestate, at the age of 36, on May 11, 1981. Although he had known that he was terminally ill for some time before his death some say that due to Marley’s Rastafarian faith he did not create a will, meaning that he died intestate.
If Jamaican intestacy law applied his wife Rita would receive 10% of his assets, plus a life estate of 45% and his children would be entitled to equal shares in the remaining 45% of the estate. However the absence of a will meant that the family had no rights to Marley’s name, likeness, and image, which was the largest asset of the estate.
Instead of allowing the assets to pass under Jamaican law, two of Marley’s business advisors fraudulently prepared a series of documents, and convinced Rita Marley to forge her late husbands signature transferring to her the control of most of Marley’s corporate holdings, royalty rights and money. When this scheme was uncovered the estate administrator, Mutual Security Merchant Bank and Trust Company, sued the business advisors, and Rita Marley was removed as an administrator. It was also the beginning of decades long litigation against the estate.
In the early 90′s, the family sued the estate for the exclusive right to use Marley’s name, likeness and image for commercial purposes. As his widow Rita and all of Marley’s children could exploit (as well as stop others from profiting from) his name, likeness and image, Marley’s estate is now considered one of the most lucrative of any musician.
If Marley had a valid will not only could he have directed who would manage his estate and legacy it is less likely that his estate would have been open to fraud or decades of legal proceedings.
The lack of a will increases the time, expense, and stress of administering an estate at an already difficult time for the deceased’s family.
A beneficiary is a person who receives money or other benefits from a benefactor. In relation to deceased estates it is a person who has an interest in your Will.
A properly made and executed will creates a Trust at the time of the Will makers’ death. If you have properly made and executed a Will the assets in your estate go to your executor who holds the assets on trust for your beneficiaries.
The ‘Primary Beneficiary’ of each trust is the individual for whom the particular trust is created. Normally a Will is created leaving a spouse as the primary beneficiary. If the spouse has predeceased the will maker the estate will flow to the contingent beneficiaries who are usually children (or grandchildren) of the Will maker.
If all of the named beneficiaries pre decease the Will maker the estate usually passes according to legislation in each State or Territory. Therefore it is important that you clearly state in your Will your intentions in the event that the stated beneficiaries die before you.
Unless you specifically nominate that your death benefit is to be paid to your estate, then generally speaking your Superannuation does not form part of your estate. Normally Superannuation is directed to any beneficiaries under a valid binding nomination or at the direction of the trustees under a non-binding nomination.
In either case a Beneficiary under a Superannuation scheme is limited to the members legal personal representative and dependents, including a spouse, child (including adult children), financial dependent, and a person in an interdependent relationship with a scheme member at the time of the members death. If all of the beneficiaries predecease the member the Superannuation trustee takes the members Will or any other relevant evidence into account when deciding how to direct the benefit.
Your Estate consists of the assets that you are able to give to beneficiaries using a Will. Generally speaking these include assets that you own in your own name and those owned as “tenants in common”. (Where each owner has a separate interest that may be passed to specified beneficiaries. Property owned as a joint tenancy will pass automatically to the surviving owners.) The deceased estate is held in trust from your death until the transfer of the property and assets to the beneficiaries. This might include;
Bank (or Building Society/Credit union) Accounts in your name;
Insurance payouts (excluding life insurance as it is not payable to you); Shares in publicly listed companies or that you hold in a business;
Personal Possessions including tools, a record collection, jewelry, or clothing forms part of your estate.
Importantly as superannuation is left to a person under a form of nomination it is not part of your estate even though it may be referred to in the Will.
Pablo Picasso died in April of 1973 at the age of 91 with an estate including assets estimated to be valued somewhere between $100 million and $260 million. Surprisingly he left no Will, and it took over 6 years and $30million to settle the estate. Shortly before his death French Inheritance laws changed permitting illegitimate children to be recognised as heirs. His illegitimate son Claude was appointed by the court to administer and distribute the estate amongst five other heirs.
Protracted legal battles over how best to exploit the Picasso name commercially were eventually settled in 1989. Apart from their collected artworks the most marketable asset of the estate is the licensing of the Picasso name and image and each year the estate fights multiple lawsuits defending the Picasso trademark.
If Picasso had created a will his heirs would not have had to pay over $30 Million in legal fees and he could have directed his estate in the way that he wished.
A Will is a document setting out how you wish your assets to be distributed after your death. Originally the document that was used to distribute your personal property(clothing, furniture, and money) was known as a Testament, and the document disposing of real property (House and land) was known as a Will. Overtime both of these documents have been combined and are known as a Last Will & Testament that disposes of both real and personal property.
In Australia today most people own a car, furniture, bank accounts, perhaps a property and shares, and other inheritances. When you make a Will you direct who will be the executor of your Estate, which family members or friends will receive your possessions following your death, and if you have children who will be their guardians.
If you die without a valid Will your estate may be divided according to the laws of intestacy leaving your estate to people you may not even know.