The role of an executor and how to choose one

Most people understand the importance of a will, but many people overlook a very important element; the appointment of an executor. An executor is someone who you nominate to carry out the instructions of your will and help to administer your estate.

“Even if you know that you need to appoint an executor, you need to think carefully before you decide who is going to represent your estate in that capacity. Family or friends are usually appointed, but we fail to realise that the person we choose might not understand the complexities and legalities needed to manage your estate effectively. As such, wrong decisions can be made that will harm your estate.” Says, Kobus van Schalkwyk, Head of Legal at Standard Trust Limited.

Picking the right executor can help ensure the prompt, accurate distribution of your possessions as laid out in your will, and with a minimum of friction and delays. Understanding the role of executor can also help you make an informed decision, when selecting an executor.

The executor’s functions:

• Take over the management and protect the assets in the estate.
• Taking an inventory of everything in the estate.
• Procure the will and file it with the master of the high court.
• Identify and notify the beneficiaries and all relevant parties of the person’s death.
• There are a number of precise administration procedures that have to be followed.
• Finalise income tax returns.
• Handling details like terminating credit cards, and notifying banks and government agencies like Social Security and the post office of the death.
• Prepare and file a liquidation and distribution account.
• Distribute the remaining assets to the beneficiaries.

Given the level of responsibility, the person you choose should be someone who is honest, dependable, well-organised and vigilant about meeting deadlines. They should also have some knowledge of law and taxation, and some level of business acumen. Lastly, and perhaps most importantly, you should appoint an executor who will be empathetic with your family and beneficiaries.

It is also good to keep in mind that if the person or persons you choose, as you can have more than one executor, needs help with their role, they can always call on an expert like a bank, a trust company, attorney, or tax accountant to guide them through the process. Although this comes at a cost, and will be paid for out of your estate.

If you find yourself in a position where you are unable to choose an executor for any number of reasons, you could name a third party executor like a bank, trust company or a professional who has experience dealing with estates.

If at the time of passing you have not appointed an adequate and skilled executor, the Master of the High Court will make an appropriate appointment. While small estates of under R250 000 would often not require a specialist executor appointed by the Master, estates of R250 000 and more would mostly require the appointment of a specialist as an executor, or to assist with the administration of the estate.

When appropriate provision has not been made in a will, family members can complete what is known as a Nomination of Executor to perform this function. They would submit that nomination to the Master, who has the power and authority to make such appointment as per the family members’ nomination. Another point to consider is that an executor can take a maximum fee of 3.5 percent of the gross value of the estate as a fee if they want to. Often, family members do not take this fee but a bank or lawyer will charge this fee for attending to the administration. They may also earn six percent of the income earned by the assets from the date of the person’s death until the estate is distributed.

“Estates are becoming more complex and it is always better to ensure that you have the right executor in place,” says Mr van Schalkwyk. “Whoever you chose, be sure to get their approval first before naming them as your executor. And once you’ve made your choice, go through your will and all financial details with them.”

“It is important to give them a copy of your will, as well as a copy to relatives that you trust, so on passing it can be easily retrieved. This is the best possible start to ensuring everything else can happen within a reasonable timeframe and as per your wishes,” concludes Mr van Schalkwyk.