When writing your will, choosing your executor is a significant decision. When appointing an executor for your will, you are appointing a personal representative; a person who will be in control of executing your wishes.
As the testator, you are free to appoint anyone as your executor. In Singapore, an executor must be at least 21 years old at the time of the death of the testator; they must be of sound mind and not bankrupt. Given that this person will effectively be in charge of your estate, it is essential to consider who you appoint carefully. You want your will carried out according to your wishes and in a manner that complies with all the relevant laws.
Legally, you can appoint a personal friend or a family member; your executor may also be a beneficiary of your will. Alternatively, you can appoint a professional executor.
If your estate is reasonably large or complex, it makes sense that you would need someone familiar with the financial and legal implications of executing an estate. A professional executor might be more suitable and speed up the execution process.
Benefits of choosing a professional executor
1. It relieves your relatives or friends of the burden and responsibility of administering your estate.
A close relative or trusted friend might know your family dynamics and be in a better position to know your wishes. However, being an executor comes with many administrative and legal obligations. The executor must act in the best interests of the beneficiaries and without any conflict of interest. It carries enormous responsibility and duties include the following:
The executor must:
- Facilitate the funeral arrangements.
- Apply to the court for a Grant of Probate – a court order allowing the executor to start with the execution of the instructions in the will.
- Locate, collect, and draw up an inventory of all the assets of the deceased.
- Settle any outstanding debts and obligations of the deceased.
- Make sure that the deceased’s tax affairs are in order.
- Distribute the assets to all the beneficiaries according to the deceased’s wishes.
It is a heavy burden for a mourning relative or a trusted friend to take on all the legal and administrative responsibilities of being an executor. Most people are not familiar with the process of applying for a Grant of Probate or making sure that the deceased’s estate is tax compliant or locating overseas assets. Placing such a burden on a loved one can be overwhelming for that person.
2. A professional executor has the expertise to deal with complex estate matters and safeguard your assets
A professional executor could be a lawyer or a trust company. They have the financial and legal expertise to execute more complex instructions. The execution of an estate can include investment decisions, transfer of property, dealing with tax issues, and managing trusts.
For example, if you create a trust for your minor children in your will, a professional executor will have the skills to act as a trustee and make proper decisions about investing or administering the child’s financial affairs until your child turns 21.
If your will is challenged, a professional executor will have the knowledge and be prepared to deal with the legalities of such a challenge. A professional executor can anticipate any obstacles and act pre-emptively to avoid long delays in the execution of your estate.
If you have assets overseas, a professional executor might be better qualified to locate and transfer those assets under the applicable laws.
A professional executor will be familiar with tax and other financial matters. They will be objective when placing a fair value on your assets.
A professional executor will safeguard your assets and ensure that all matters are dealt with correctly.
One of the most significant responsibilities of being an executor is to preserve the value of the estate. This can also be one of the most important reasons to appoint a professional executor. They often work in a team, which means combined skills and expertise.
According to media reports, when a senior manager at the Rountree Group, Lesley Gamwell’s, mother died; her sister was the sole executor. As executor, without consulting with her siblings, she tried to sell their mother’s apartment for much more than other comparable apartments. It took nearly four years to finally settle the estate and the apartment ultimately sold for $100,000 less than the purchase price.
Did the sister comply with her duty to preserve the value of the estate and act in the interest of all the beneficiaries?
Situations like these can be avoided by appointing a professional executor who can be held liable and who has a legal duty to act impartially and place a realistic value on assets.
3. It protects beneficiaries against any liabilities.
All executors owe a fiduciary duty to the beneficiaries of the estate. If the estate is not dealt with correctly, executors can be held personally liable. They may end up being liable for any shortfall in the estate funds, even if an honest mistake caused it.
By appointing a relative or a close friend, you are exposing them to fiduciary liability. As discussed above, executors have extensive statutory duties of care when exercising their powers under the will. This could lead to a heavy financial burden on someone who is not familiar with the legal duties and financial implications of executing a will.
By appointing a professional executor, you are removing this fiduciary duty from your loved ones and protecting them against possible financial liability.
4. It prevents family disputes and ensures impartiality
You just need to spend some time in probate court to know that it is not uncommon for families to fight in court over estates. Conflict and disputes amongst family members are widespread when dealing with deceased estates. This gets even more complicated when there are children from a previous marriage, or there is a family business, and a sibling was, for example, appointed as executor.
Not all cases reach the media, but in recent years we’ve seen many famous families in court over an inheritance. The sibling dispute over Dr Martin Luther King Jr’s estate is well known. In 1964, Dr King received the Nobel Peace Prize and donated the prize money to further the civil rights movement. Dr King died in 1968, without a will or an appointed executor. His estate was then controlled by his three children. In 2014, his estate (two brothers) voted to sell the Bible that Dr King carried during the civil rights movement in the 1960s against the wishes of his daughter. They also voted 2-1 to sell his Nobel Peace Prize Medal. At the time, the Bible and the medal were in the possession of the daughter and the estate sued her after she refused to hand over the items to the estate.
What followed was three years of legal dispute between the King siblings. The dispute was so serious that former President Jimmy Carter participated as a mediator between the siblings.
Finally, in 2016, a court signed off an agreement to end the legal battle. Sadly, this was not the only legal battle between the siblings. Earlier, two of the siblings accused one brother, Dexter, of wrongfully appropriating from the estate. In return, Dexter refused to present any financial records of the estate.
In this case, as in so many others, a professional executor could have prevented this type of conflict and avoided lengthy family lawsuits involving inheritance.
A professional executor must act impartially; they must act in the best interests of the estate. They can deal with any beneficiary queries from a position of impartiality and will have the knowledge and skills to address those issues.
5. It can be cost-effective
Singapore law does not require you to pay the executor if it is not a professional executor. Many people shy away from appointing a professional executor to avoid the cost. However, it might not work out that way.
Administering an estate is complex. Your relative or friend might not have the necessary expertise to execute your estate and will need to consult and appoint a lawyer or a professional executor to act on their behalf. The cost could end up being the same, if not more. They might need the services of lawyers, financial, property, and tax experts. A professional executor usually offers a combined skill set at a pre-determined price.
Deciding whether you should appoint a professional executor depends on the size and complexity of your estate. It is also possible to have two or more executors. If you prefer to have someone close to you, to carry out your wishes, but do not want to burden them with the legal responsibility, you can appoint a professional executor and a personal friend or a child or your spouse, as joint executors. The professional executor can be in charge of the more complex issues, whilst the friend or relative can provide input on more personal matters.
If you are interested in learning more about such a service, please do get in touch for a no-obligation discussion.