Wills and Estate Planning - Appointment of Executors and Guardians

Last month’s article recommended the importance of having a Will in place (if you have young children, a Will incorporating guardianship provisions should be mandatory).

 

A Will should incorporate the appointment of an executor: someone who has certain key responsibilities and tasks to fulfil; ascertaining the assets and liabilities of the deceased, dealing with taxation issues – (arising on death and during the estate administration) – and, possibly, dealing with the deceased’s business or property interests. The Will devolution has to be applied; then upon completion of the estate administration, accounts produced for approval by the principal beneficiaries. If there is any element of continuing administration (eg, a legacy or share of the estate due to a minor); a trust situation will arise. Once the estate administration is complete, the executor becomes the trustee of the trust.

 

To obtain a Grant of Probate giving the executor legal title to administer the Will in his possession, the executor is required to produce to the High Court a legal document (Oath) stating that the Will was the deceased’s last Will. Once Grant of Probate is issued, the Will becomes a public document.

 

An executor in law is treated as having a fiduciary duty to the underlying beneficiaries; if he fails to distribute assets or account to the beneficiaries, they are entitled to seek redress through the Courts.

 

In simple cases, one executor (eg, close relative, spouse or civil partner) would suffice; but should any element of a trust arise (eg, where minor children may be involved), two are required. It is not possible to have more than four executors authorised to take out a Grant of Probate.  

 

Who do you appoint? Clearly an individual/s in whom you have absolute trust and confidence to carry out your written wishes. It is sensible to incorporate provision for alternate executors, to guard against executors not surviving or being unwilling to act etc. Where business interests (or complex family issues) may arise, the appointment of a professional is recommended.

 

 

The court can appoint guardians under the Children’s Act 1989 if you die leaving young children surviving and without a surviving parent. It is sensible to consider who should be appointed in the knowledge that a spouse or partner does not survive the first spouse to die (eg, a common accident).

 

The appointment can be made by two or more persons acting jointly. The appointment may, but need not be, contained in a Will or deed. If the appointment is not within a Will then it must be in writing, dated and signed by the person making the appointment in the presence of two witnesses. These formalities make the inclusion of a guardian appointment within a Will more common.

 

Any intended guardian must be made aware of the appointment and be willing and able to act. The will should also make provision for the maintenance of children. The easiest way is by means of a trust fund. There is no objection for the guardian to be appointed a Trustee of the trust fund. The trust should contain powers for the expenditure of both income and capital for the maintenance, education and   advancement, or other benefit, of the child.

 

It is fundamental that the choice of guardian/s be a party with whom you have implicit faith and trust - their responsibility towards your children is significant.

 

Whilst a Will may contain the formal appointment of guardians, it is sensible to provide a side letter setting out your expressed wishes (as parents) as to how the guardians may apply their discretion in relation to the (trust) powers of expenditure over capital and income. Although such wishes cannot be binding upon the guardians, the clearer your expressed wishes, the easier task for the guardians to then apply such discretion. A letter of wishes can be amended, at any time, as changing family circumstances may dictate. It is more onerous, usually, for individuals to make a new Will!