Do you really know what you’ve signed up for?
28 September, 2016
You’re an Executor - do you really know what you’ve signed up for?
Research* commissioned by Public Trust provides new insight into the responsibilities carried out by individuals named as executors of a Will and the challenges they face.
The research found that ‘feeling honoured’ to be asked or ‘feeling obligated’ to take on the responsibility were the primary motivations for accepting the role of Executor. Most people agreed that they had very little knowledge of what they’d agreed to undertake.
Public Trust, General Manager Retail, Matt Sale says this willingness to take on the role of Executor without being aware of what’s involved is reflective of New Zealander’s readiness to help family and friends, but also reflective of their lack of understanding when it comes to estate planning.
“What people don’t realise is that they have signed up for a job with legal obligations and a number of difficult and time-consuming responsibilities, during a time when their energy could be better used grieving, and supporting family or friends,” says Matt.
Not understanding the process or what is involved in being an Executor was the biggest challenge identified through the research. Other difficulties included not having sufficient legal knowledge, the time commitment, paying bills and selling assets, and having to manage the expectations of beneficiaries, all during a time of grief.
“Only some Executors are aware of the tasks they’ll need to carry out on behalf of the estate. Many don’t know they have a legal responsibility to manage the distribution of the estate, ensuring everything is finalised in accordance with the Will. Even less realise they’re personally liable and in a worst case scenario could be sued if things don’t go to plan,” says Matt.
Locating beneficiaries, filing tax returns, re-homing pets, resolving disputes between beneficiaries and advertising for creditors were some of the tasks Executors were unaware they’d have to complete.
“Unsurprisingly not all Executors were aware they would have to apply for probate as part of their duties. This is the process of legally validating the Will and obtaining legal authority from the High Court to deal with the estate - it’s a legal requirement for estates with $15,000 or more in assets.”
On average it took Executors well over 50 hours to complete all their tasks and finalise the estate. Most Executors were not compensated for their time and some had to pay for additional non recoverable costs out of their own pocket as result of their duties.
“That’s a big time commitment, most of us wouldn’t willingly give up a weeks’ holiday or work for free for over a week, yet that’s the expectation on private Executors.”
75% of Executors were also beneficiaries of the estate, which can further complicate matters according to Public Trust.
“When it comes to money and emotion, people can be unpredictable. Family relationships can become strained and even break down completely during the estate administration process.
“Trustworthiness is the number one quality people look for when selecting an Executor. When you think about the people we trust most, they are usually those who are closest to us – so it’s easy to understand why so many Executors are also beneficiaries,” explains Matt.
Other traits that rated highly were objectivity and fairness, as well as organisational skills. Less considered were availability, legal skills and knowledge, and interpersonal skills.
“What this research has cemented for us is that there is a real demand from Executors for professional, independent advice and assistance during the estate administration process.”
95% of the Executors surveyed by Public Trust said they needed help or support to complete their duties and Matt believes Public Trust is uniquely positioned to provide that assistance.
“Estate administration is our core business, we’ve been doing it for over 140 years; we manage over 2000 simple and complex estates annually. We know that being an Executor is a significant responsibility so there’s no shame in asking for help. It’s something we’re proud to provide through Executor Assist.”
Executor Assist is a service exclusive to Public Trust that is designed to take care of some or all of the estate administration process for Executors.
“The great thing about this service is that the Executor doesn’t have to give up control, they still have the decision making power and we work with them, quietly and efficiently in the back ground to ensure their job is easier,” says Matt.
*The Public Trust Executor research was conducted by TNS, a market research company. The purpose of the research was to understand opinions, responsibilities and challenges to being named a private executor of a Will. Online interviews were open for one week to New Zealand residents, aged 18+, who had served as an Executor in the last five years, surveying a total sample size of n=153.
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