Estate planning is more than having a standard Will – it’s about having a plan for what you want to happen with your assets after you die and who you will give control to.
The team at Pacific Law have extensive experience in complex Estate Planning matters and have shared with us below some common factors which are often overlooked, causing undesired outcomes, or later resulting in estate disputes.
What happens if my executors can’t agree?
An important part of your estate plan is deciding who takes control of your affairs after your death or if you are incapacitated. This article focusses on executors; powers of attorney are a different can of worms to be opened another day. Choosing the right people for the right positions is critical to ensure your affairs don’t end up in court or cause family and relationship breakdowns.
An executor is a very important cog in the estate planning machine. Your executor takes control of everything from your funeral arrangements to closing your bank accounts and selling your house. Whilst your executor is bound to follow the wishes set out in your Will, your executor will also have a broad range of powers where he or she can exercise their discretion.
In Queensland, you can appoint up to four executors. We normally suggest appointing your spouse (if you have one) then at least two people you trust as the reserve executors. Two is a good number – it halves the workload with less complication and costs.
Your executors do not necessarily need any formal qualifications – for most estates, it is more important that your executors are diligent, fair-minded and honest people than have any professional qualifications. Your executors will receive plenty of advice and guidance from your accounting and legal team along the way.
Personal dynamics are also important – it’s not a wise decision to put in two children who haven’t been able see eye to eye since they were fighting over who sits in the front seat as it will only lead to their disputes being played out in a court room.
What happens If your executors cannot agree?
We encourage early dispute resolution using mediation where possible.
If mediation is not successful, we encourage the appointment of an independent administrator.
If all else fails, the executors can apply to the court for directions or the removal of one executor.
Often executors argue about things such as when to sell a property or shares. You can put clear directions in your Will if you think your executors are not likely to agree however you cannot cater for all possibilities in your Will. We then go back to the choice of executors.
Traditionally people have looked for professional such as accountants and lawyers. Are they older than you and will they still be interested in running your affairs in their retirement? Are you appointing a firm or a person? Sometimes, the laws around representation mean your estate might end up with your lawyer’s or your accountant’s spouse or children as your executor.
There are other control positions in your estate plan. Your executors may also take control of your self-managed super fund (SMSF) or family trusts. This can be dangerous when there is a decision about where to pay your super balance or the profits from a family trust investment.
Pacific Law have an experienced estate planning team. We see how estate administrations play out and that helps us to prepare rock-solid estate plans for clients.
If you have any concerns around your existing estate plan or don’t have an estate plan, please contact the team at Pacific Law today.
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