The multiple hats that can be worn when named in a Will
Posted on 6 September 2019 by Adam Hillier
Sometimes for a named person in a Will, it can be a case of “wearing multiple hats” and potentially four all at the same time by the same person!
There’s the beneficiary hat which is often the prettiest and most enjoyable to wear as it means the individual is perhaps receiving a legacy, or a chattel or even a share of the residuary estate.
Then you have the bright and colourful guardian hat (think Mr Tumble’s hat!), but unfortunately this hat is ironic in its appearance as no one ever wants to have to wear it due to the sadness associated. However, it is extremely important if there are young children who need to be cared for following the death of a parent.
There’s the very serious executor hat, perhaps picture a stiff smart bowler which allows the individual to administer the estate and ensures that the assets pass appropriately in accordance with the instructions.
Finally, you may need to place a trustee hat upon your head if there are trusts involved. This hat starts out brand new but often eventually shows a considerable degree of wear and tear over the many years of action and it really can be quite tatty by the time the trust ends!
It is the last two hats that I wish to focus on today.
An individual can be both an executor and a trustee of an estate. However, the roles for each are distinct and different. This article will outline these differences and aid in choosing appropriate individuals. It will also set out how one can step down from the role in the future.
It is not uncommon for a Will to appoint people to act as “my executors and trustees” and this joint role is very important to understand moving forwards in order for the roles to be a success.
Your Will can sometimes create a trust when one or more individuals, the trustees, need to look after a property or an asset for a period of time to benefit others. In this instance, the executor(s) carry out the terms of the Will during the estate administration period to ensure that the asset is placed in the control of the trustees. They then are responsible as the legal owners in managing the property or assets subject to the trust for its duration ensuring that they always act in the best interests of the beneficiaries. A trustee has a fiduciary duty or in other words a duty of care towards the beneficiaries.
A trustee can be a beneficiary, a professional person, a company or a Limited Liability Partnership (LLP). Each case should be carefully considered on its own merits when the Will is prepared and the individual circumstances and the complexities involved will dictate who should or shouldn’t act.
As trusts can exist for many years, it is very common for older trustees to retire from their position and be replaced by new trustees. Legal advice should be sought about the preparation of deeds of appointment and retirement to ensure that the procedure is managed correctly and avoid difficulties in the future.
An executor is responsible for administering a deceased person’s estate. This can involve establishing the assets and liabilities, paying any debts to include tax, considering any potential claims that may arise and then finally distributing the assets to the beneficiaries.
An executor is named in a Will, and can be a lay individual, a professional like the partners of a firm of solicitors or a trust corporation. There can be up to four executors with the legal ability to administer the estate. However, before they begin acting several things must be established, the validity of the Will and the capability and willingness of the executors. If the Will is valid, with willing and able executors, a grant of probate can be obtained. This gives the legal right to deal with someone’s affairs and provides proof of their title. However, if the Will is valid but has no willing or able executors, the right to administer the estate becomes more complicated and seeking professional advice is recommended.
As noted above the capacity to be an executor (and trustee) must also be established. The roles can be complex and thus requires careful appointment. The size of the estate is influential when deciding between a lay executor or a professional executor as the larger estates can sometimes be very complicated and may benefit from an experienced professional acting. Sometimes family members or friends are appointed instead especially when the estate is smaller and therefore usually simpler to manage. However, this does not stop the executor from choosing to later instruct a professional to assist them.
When choosing it is sensible to consider their age and the probability that they will survive you. One of the advantages of a professional executor or trustee is the appointment is of the partners of a firm rather than an individual specifically.
An executor must be an adult (18 or over), have mental capacity and can not be bankrupt, insolvent or in prison.
The final element concerns the willingness to act in the role. You would be sensible to always check that the individual who you are considering appointing is actually happy to act in that capacity in the future. They may not feel they can do the job through ill health, location or lifestyle pressures. An executor, provided they have not intermeddled in the estate can look to step down or renounce their role. This can be done by signing a deed of renunciation. However, it is important that you seek proper legal advice before doing this as renouncing your role as an executor will not remove you as acting as a trustee if the Will establishes any ongoing trusts.
If you would like to discuss the matter further, then you can pop in to see me at the Portesham Legal Clinic or alternatively by telephone on 01308 459533 or, by email at firstname.lastname@example.org and I will be very happy to help!
Posted in: Wills