Who should I appoint as an Executor?
Other than your Executor being over the age of 18 there are no real legal requirements as to who to appoint to administer your Will and Estate. With little legal framework or guidance surrounding the appointment of an Executor, we frequently come across these queries:
Query 1. Can I have more than one person as Executor?
Yes, you can appoint as many people as you like provided they are over the age of 18. However, when the time comes to Probate your Will, you can only list a maximum of 4 Executors on the grant of Probate. The remaining Executors will need to have their position reserved on the Probate Application. There would not be many situations where you would need to appoint four or more Executors and it is something we would discourage. This is because all Executors must sign probate documentation and all other documentation in relation to the estate. It is logistically a nightmare to get multiple parties whom all live in different areas to sign the documentation and with this comes delay. Often when multiple Executors are appointed someone may renounce their role or step down and this is at an additional expense to the estate. It is important to think about why you would appoint any more than two Executors and how it would work logistically. Also, by appointing multiple Executors every decision that is to be made with the administration and distribution of your Estate needs to be agreed upon. For example, the agent appointed to sell the property, the reserve price and the method of sale.
The situations where we see people wanting to appoint more than 2 Executors is when the Will maker has multiple children. Again, we discourage that all children be appointed for the reasons as stated above. Many Will makers say they don’t want to upset any of their children by not including them and we explain that there are other roles and responsibilities that can be delegated among your children. For instance, you need a Medical Power of Attorney and an enduring Power of Attorney in addition to appointing an Executor. There are three roles that can be distributed amongst your children if you think it is appropriate to do so.
Query 2. What happens if my named Executor dies?
If your Executor dies, your substituted executor will step in. A substituted executor is the person whom you appoint if your first named executor passes away before you or cannot fulfill the role of Executor. You can appoint as many substitute executors as you want, and this is often a good idea when the appointed Executor is on the older side and there is a chance they may pass away before you. To name a substituted executor is very easy and our team always recommends that this occurs so that the Will maker can have certainty that there will be the person that they want appointed to administer their estate.
A simple substitute executor clause will look something like this: “In the event of my named Executor predeceases me, is unable to act or unable to continue to act, I appoint ……. to be the Executor of this my Will.” It is that simple – there is no reason why it should not be done.
If you do not have a substitute executor, the main beneficiary appointed under your Will needs to make the application to the Supreme Court for Letters of Administration with the Will annexed. This may not be what you want – as often Will makers like to ensure that the Executor is a different person to the main beneficiary who receives the bulk of your estate.
Query 3. I don’t trust any family or friends – who should I appoint?
There are third party services and persons which can be appointed to act as your executor. As stated above, any person can be appointed your Executor – they just need to be over the age of 18. We commonly see many people placing their accountants, their financial planners and even their lawyers as Executors as these are trusted professionals who know the intricacies of the Will makers finances and are highly experienced as they deal with these mattes daily. It is important to discuss with any professional you seek to appoint what fee/commission they seek to charge, and it is vital that this is placed clearly in the Will. If the commission is detailed in black and white it alleviates any potential issues on what can and cannot be charged. The appropriate rate of Executors commission is discussed below – see query 6.
There are also services who can be appointed as an Executor such as State Trustees or Equity Trustees. It is important to note that these services will charge a commission to be your executor and the current rate is 5% of your estate.
Query 4. What if my named Executor doesn’t want to do it?
We refer you to the answer in query 2. A party can step down/renounce their role and this often happens when the appointed Executor does not want the responsibility of administering the estate or if they are worried about potential conflict between the beneficiaries.
It is recommended that you ask your preferred Executor if they would be happy to do the role and if the seek any fee/commission for doing so. Being an Executor can be very time consuming especially if there are houses that need to be prepared for sale and then completely cleaned out for vacant possession.
Once your preferred executor or executor/s agree it is a good idea to give them a copy of your Will or give them the details of the lawyer who prepared your Will and is holding the original Will.
Query 5: My Executor is overseas/interstate can they still perform their role?
Yes, your executor does not need to live in Australia although it is helpful if they are. Again, think about the logistics involved in having documentation signed!
Query 6: What can an Executor charge?
An Executor can charge what is called Executor’s Commission pursuant to section 65 of the Administration and Probate Act 1958 (Vic). The right to charge commission can either be as per the terms of the Will, by obtaining consent of all the beneficiaries or by obtaining an Order of the Court. The maximum amount that can be claimed is 5% of the estate.
However, to charge or seek the full 5% your executor needs to prove that they have gone above and beyond normal duties to administer an estate.
The Supreme Court stated in the case of Patterson v Halliday  VSC 297 that when assessing commission, the Court had to consider the following:
- the work and judgment involved in the realisation of assets and earning income;
- the extent of administrative activities;
- the responsibility generally;
- the amount of work done not reflected in financial terms;
- how long the estate was administered;
- the size of the estate and its capacity to pay;
- the work of a non-professional character not undertaken by the applicant and performed by professionals; and
- Executors’ pains and trouble relative to the result.
Obviously, it is preferred that the issue of Executor’s Commission payment does not proceed to Court as this is a cost to the estate.
Therefore, it is vital to get detailed advice from your lawyer as to an appropriate commission amount to nominate.