Choosing Your Executors and Trustees: Why it is not just a name on a page

When making a will, most people focus on who they want to leave their assets to.  But one of the most important and often overlooked decisions is choosing who will carry out those directions. 

Appointing executors and trustees is not simply a matter of adding a name to a document.  These roles come with significant responsibilities that can be both time consuming and costly.  The people you choose will have a major impact on whether your estate is administered smoothly, efficiently, and in line with your intentions.

What do executors and trustees actually do?

An executor and trustee is responsible for managing your estate after you die.  Their duties include:  

• Locating your original will.
• Carrying out funeral arrangements and honouring your burial or cremation wishes. 
• Identifying and understanding your assets, such as bank accounts, vehicles, and property.
• Paying any debts and taxes if necessary.
• Making any important decisions in respect of your estate.
• Distributing your remaining estate in accordance with your will.

What this means for choosing your executors and trustees

Given the significant responsibilities involved, it is important to appoint individuals who are not only trustworthy but also capable of managing the financial and administrative demands of the role.  When making your selection, consider:

• Location: Appointing executors and trustees who reside overseas can create unintended tax consequences for your estate, including the risk of foreign tax liabilities.

• The number of executors and trustees: Relying on a single person can create problems if they are unable to act due to unforeseen circumstances.  Having at least two appointees helps prevent disruption, additional costs and uncertainty for your loved ones.  
• Balancing personal and professional executors and trustees: For larger or more complex estates, combining family members with professional trustees can provide both personal insight and the expertise needed to manage estate administration effectively.
• Conflict management: Executors and trustees must make decisions in the best interests of the beneficiaries of the estate, so choosing people who can act impartially between beneficiaries and who are likely to work well together is essential.  

Can your executors and trustees be compensated?

Including clear directions around compensation helps ensure your executors and trustees are willing and able to take on these roles.  In New Zealand, the general rule is that executors and trustees cannot be paid for their role unless:

• Your will specifically allows it; or
• A Court orders it in exceptional circumstances.

If you want executors or trustees to be compensated, clearly stating this in your will helps avoid misunderstandings and disputes.

However, executors and trustees can be reimbursed for reasonable expenses incurred while performing their duties.  These may involve:

• Administrative costs: Court filing fees, legal and accounting fees, and other professional services.
• Travel expenses: Visiting properties, meeting beneficiaries, or attending Court.
• Postage and communication: Correspondence, phone charges, and courier fees.
• Property maintenance: Insurance, repairs, and utilities for estate property until it is sold or transferred.
• Other necessary expenses: Any additional reasonable costs directly linked to administering the estate or trust.

Making the right choice

Choosing the right executors and trustees is a serious decision that requires careful thought.  Making informed choices ensures your estate is managed according to your wishes and offers peace of mind for you and your loved ones.

If you would like assistance reviewing your current appointments or selecting new executors or trustees who are the right fit, the McCaw Lewis team can provide advice and support.