Before nominating your favourite family member or best friend to be the executor of your estate, give careful consideration to the consequences of such appointment. The role of an executor is to step into your shoes after your death and ensure that your assets are distributed in the best interest of your estate and those you love. However, it is an onerous task for any individual to undertake so before nominating an executor consider the following:
Nominating multiple people as executors of your estate comes with its own set of challenges, so think carefully before appointing more than one person. If one of the nominated executors is set to benefit from your estate, this could cause the other executors to feel that a conflict of interest exists. It is also necessary to consider whether any tensions are likely to arise between the multiple personalities, bearing in mind that they may all have different views and interpretations of your wishes. From a logistical perspective, having multiple executors trying to co-ordinate their diaries to make personal representation at SARS or the Master’s Office may be somewhat impractical.
Lay person versus professional
Although our law permits you to nominate a family member or friend as executor, bear in mind that it is up to the Master of the High Court to confirm the appointment. If the Master is not satisfied that the person you have nominated is sufficiently qualified to do the job, he will request that your executor be assisted by a professional agent such as an attorney, accountant or fiduciary specialist. In such circumstances, your nominated executor will effectively outsource the day-to-day functions of winding up your estate to a professional although will remain responsible for finalising the estate. Unless the family member or friend you have appointed has the necessary qualifications for the job, your estate could effectively be wound up by complete strangers in a law firm or accounting practice – which is not what you would have intended. One way of circumventing this situation is to appoint a trusted family member as the executor together with a professional fiduciary firm as the co-executors to your Will. This will provide a blend of trust and knowledge together with checks and balances.
Location and physical ability
If the person you have appointed as executor resides outside of South Africa, this may cause unnecessary delays and costs to your estate. In most cases, the Master will request a non-resident executor to provide security for the value of the estate (which must be in the form of a bond of security) before the executor’s appointment is confirmed. This, together with the costs of notarising foreign documents, will incur unnecessary expenses in the estate. If the executor you have nominated in your Will has subsequently emigrated from the country, now is a good time to amend your Will and nominate someone who is locally based.
Executor’s fees are regulated by statute and are set at a maximum of 3.5% (plus VAT) on the value of the gross assets in your estate. However, in many instances, these fees are negotiable depending on the size and complexity of your estate. If costs are an issue, bear in mind that appointing a friend or family member does not necessarily reduce these costs as they are entitled to charge the same fee as a professional firm. You can, however, include a stipulation in your Will that your estate must be administered at a discounted fee. Another factor to consider when nominating a friend or family member as executor is that if they are required by the Master to appoint a professional firm as co-executor, the executor’s fee will essentially be split between the two parties. Earning a substantially reduced fee, the professional firm may not be adequately incentivised to expedite the winding up of your estate.
Appointing a family member or beneficiary
Be cautious of appointing a family member or someone who stands to benefit from your Will as an executor as this can give rise to family tensions and animosity. For instance, appointing your current spouse as executor might put her in a difficult position if your ex-spouse and/or children from a previous marriage lay claims for maintenance against your estate. It is safer to appoint someone who doesn’t stand to inherit from your estate and who can maintain a level of neutrality and objectivity when distributing your assets. It is also important to bear in mind that grief may impact on a family member’s ability to do an effective job of winding up your estate, so consider nominating someone who is not a loved one or part of your inner family circle.
Age, health and longevity
Other important factors worth considering are the age and health status of the person you have appointed, bearing in mind that certain functions of the executor require him to attend to certain matter in person, including standing in queues at SARS and at the Master’s Office. In addition, bear in mind that where you appoint a single person as the executor, there is a risk that he/she pre-deceases you. On the other hand, appointing a firm of professionals that you can trust to wind up your affairs means that you eliminate the risk of your intended executor not being around. To safeguard against the risk of an executor pre-deceasing you, you may want to consider nominating a primary executor together with an alternate executor who can step in if your primary executor is unable to take on the role.
Knowledge and acumen
If you are considering nominating a friend or family member, bear in mind the wide spread of skills and acumen they will need to fulfill their duties effectively. These include:
Legal knowledge: The job includes the interpretation of your Will as well as an understanding of relevant legislation including the laws of testate succession.
Administrative competency: The role includes collating and compiling documentation, adhering to deadlines, obtaining letters of executorship, timeous submission of documents, opening bank accounts, communicating with debtors and creditors, and advertising in the government gazette.
Finance and tax: Your executor will need to calculate and pay estate duty, calculate estate liquidity, prepare your liquidation and distribution account, record your assets and liabilities, pay debts and admin fees, finalise your affairs with SARS, and pay funeral expenses
An executor plays an important communication and relationship management role in that he is required to collaborate with a number of different parties including your heirs and beneficiaries, creditors, debtors, business partners and even those you may have chosen not to include in your Will. Extended family structures can be complex and difficult to navigate emotionally, and your executor will need to be someone you can trust to be headstrong, sensitive to people’s emotions, good at communicating, and who can navigate complex family relationships without causing ructions.