A story for you to ponder…
Peter is a businessman who knows very well the importance of having a Will. What he disagrees with is to appoint a trust company to become his executor because he does not believe in 3rd parties handling his estates. Besides, he deems that the charges are high.
So he appointed his best friend, Adam, as his executor. Upon the death of Peter, Adam starts his job by obtaining the Grant of Probate. Day by day he found out that there’s lots of administration work that Adam needs to handle such as locating, identifying and collecting Peter’s assets, gather all Peter’s debt, deal with bank and creditors, deal with income tax dept, filling the estates tax returns and do all the clearing before Adam can distribute Peter’s assets to his beneficiaries.
Besides, due to Adam not well versed in managing the task, there’s delay in handling the administer job. Peter’s family members who do not understand the tedious process keep on chasing Adam to expedite the distribution process due to the need of money for daily expenses and to pay mortgages.
Adam had to correspond with various parties, make numerous calls and follow up which is very time-consuming. Adam slowly gets frustrated because it affects his daily lives and distracts him from focusing on his current job. After further consideration, Adam decided to hire a professional to help him to run the errands and expedite the matters. Relationships with Peter’s family members are affected due to this.
In the end, more money needed to be spent hiring professionals to expedite the distribution and meanwhile the friendship between Adam and Peter’s family turns sour.
For appointing an executor, what are the points you need to take into consideration.
- The complexity of the task – Administration job is not as easy as you think because one needs to deal with various parties and need to have certain knowledge on the administration process such as legal, tax, accounting and banking.
- It may cost more – If the one you choose to appoint does not have the knowledge to administer the estate, he/she ends up needing to hire someone who is able to handle it. Thus, more cost needed to administer the estate
- Continuity – when we appoint an individual as an executor, we may face the risk of passing on of the executor, old age, sickness which may derail the execution process.
- Priority – As we all know, an executor job is long and tedious. If we appoint someone who is unable to put 100% effort into managing the estates, the distribution process may get longer.
- Unexpected scenario – while the individual executor managing the estates, he/she passed away suddenly. The executor estates will get frozen which means all the estates he is executing will also be put on hold. This situation may cause further delay in distribution and it is hard to determine which assets belong to the executor and which assets belong to the one he was executing if there’s no proper filing done earlier.
Appointing an individual executor may sometimes cause unnecessary conflict or complications especially when other family members are not cooperative or are not on good terms with the executor. That is why we have the option to choose a Trust Company to act on our behalf as per instructed inside the Will. This is to ensure estate is fairly distributed to intended beneficiaries. Besides, a Trust company has the expertise, impartial, professional and most importantly perpetual existence.
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