While the Covid-19 pandemic has made many people reflect on their estate planning, it’s also added some complications to this process. Estate executors may have a tough task ahead, this will make it critical to nominate the right person to act in a way that will protect your legacy.
David Thomson, Senior Legal Adviser at Sanlam Personal Finance: Fiduciary Services, says that the national lockdown can make being an executor a difficult task. While the Masters Office has reopened with skeleton staff, it still requires hard copy documents such as the original will. If the executor is a family friend, he or she may struggle to get this document given social distancing rules right now.
Thomson notes that being an executor comes with many responsibilities and it should not be taken for granted. “The administration of a deceased estate often involves a highly technical process, so the executor you appoint needs to have the requisite knowledge and experience for the role.”
Closing the deceased’s bank accounts, collecting the assets, and advertising for debtors and creditors of the estate are among the responsibilities expected to be completed by the appointed executor.
Executor Scenarios
Below, Thomson explains two executor scenarios:
1. Not appointing an executor:
If you choose not to appoint an executor in your will, the Master of the High Court will appoint one for you, which could be a long, onerous process. The executor chosen by the Master of the High Court does not always have the expertise to administer the estate and would then be investigated to verify if the nominated person is suitable. Should the nominated executor not be suitable, the High Court may nominate an attorney of their choice or appoint the surviving spouse. Unless you are acquainted with your responsibilities as an executor and how to execute them, nothing will happen to the estate. An agent would then be appointed to administer the estate on behalf of the nominated executor.
2. Appointing a family member as the executor of your estate:
Often the nominated executor is a family member who has no knowledge of being an executor. Sometimes, the Masters Office may ask a seemingly inexperienced executor to set up security as insurance for the estate. Thompson notes that security is quite onerous and means that if you were to be nominated as an executor, you may be required to take out an insurance policy for the estate in case the assets are stolen or paid to the wrong person. When your estate is in a trust, it does not require an insurance policy. The trust would have the authority to put up a bond and the backing to not lose the money should something go wrong.
Should you want peace of mind, ensure that there is a clause that allows the executor to consult an attorney or a company like Sanlam Trust, who would be legally able to take over the executor duties of the estate if required.
Appointing a Trust or Attorney
Another option is for you to nominate an attorney or a company like Sanlam Trust directly. Thomson concludes this as an extremely reassuring option, “The executor you appoint should be the person you are willing to give your bank cards, passwords and most personal information to. It is important that you make the right choice and make provision for the cost implications that will be involved, whether or not you choose an executor for your estate.”
PERSONAL FINANCE