Understanding executors and trustees
Although the terms "executor" and "trustee" have clear legal definitions, they usually refer to the same person when dealing with a person's will. The main duties of an executor include:
Arrange for burial or cremation;
Consolidate the assets of the deceased;
Settle all outstanding debts;
Distribute the remaining assets according to the will.
Until these tasks are completed, the assets do not officially belong to the named beneficiaries. After the executor completes his or her duties, the trustee steps in to ensure that the will's instructions are followed accurately. This may involve direct distributions to adult beneficiaries or the administration of long-term trusts that span generations of beneficiaries.
Selection of executors and trustees for complex estates
For estates with complex details, such as running a business, overseeing a professional practice, managing farm assets, or a long-term trust, the criteria for selecting executors and trustees expand. The individual selected should have the expertise required for the unique needs of the property. For example, an attorney, accountant or business partner may be ideal.
Often, combining a professional with a family member can ensure a balance between expert advice and an understanding of the family's needs. If potential problems or legal challenges are anticipated, it may be wise to involve a lawyer as executor or trustee.
Where a potential conflict between trustees is foreseen, consider appointing an impartial trustee, such as the deceased's lawyer, to mediate. In anticipation of disagreement, it is advisable to have an odd number of executors and a rule that provides for the validity of majority decisions.
When a will directs that a business should continue to operate, or there are important assets that require special attention, it is important to consider involving a professional such as a solicitor.
For long-term trusts that may outlast individual trustees, trustee companies offer expertise in managing large portfolios of shares in volatile markets. Given the complexity of modern tax implications, trustee companies can be invaluable. However, before deciding on a trustee company, it is important to weigh their commission charges against the benefits they offer.
In conclusion, when planning an estate, especially a complex one, the selection of the right executors and trustees is crucial to ensure that the wishes of the deceased are carried out smoothly and effectively. If you have any questions, please contact the experienced team at Chua Hing Wai & Co, pleaseclick hereLearn more, orContact UsOffice. Address Level 2, 262 Queen Street, Melbourne 3000, Phone 96023988
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