Oran Hall | Being an executor is serious business

As the living representative of the deceased, the executor is responsible for the effective administration of the testator’s estate and risks being removed for cause, but has the right to renounce the executorship.

The executor – executrix, if a woman – is the person the testator, or testatrix if a woman, names in their will to carry out their wishes in the winding up of their estate.

The executor can be a person or an entity, such as a law firm or trust company. The executor’s primary function is to prove the validity of the will in a court of law by applying for the grant of probate of the estate and retains the services of an attorney-at-law to make the application. The court usually grants the probate after it examines the will and verifies that it was prepared in accordance with the Wills Act.

It is important for the executor to have readily available for the attorney-at-law the documents needed to begin the process. They include the following: a certified copy of the death certificate, the original will of the deceased, land titles, certificates evidencing ownership of securities, and bank books. If the titles to assets cannot be found, it is necessary to apply for replacements.

But even before this process commences, the executor may be called into action to take responsibility for ensuring that the deceased is buried if there is no family member to do so.

In administering the estate, the executor generally collects, preserves, realises, and distributes the income and assets of the estate. The executor identifies, takes possession of, and assumes control of the assets and documents as soon as it is practicable to do so, and keeps them safely. They include the original will, bank books or statements, titles to land and motor vehicles, and keys to real property, motor vehicles, and safety deposit boxes. Preserving the assets means keeping them in a state of good repair and preserving them against loss or theft until they can be realised and the proceeds distributed to the creditors of the deceased, and, thereafter, to the beneficiaries.

Distributions are made according to the terms of the will only if the estate is solvent, that is, it has a surplus after all liabilities have been settled from the proceeds of the sale of the assets plus money owed to the deceased at the time of death and which has been collected. It is the duty of the executor to seek to get the best price for assets by getting a proper valuation, advertising them for the best market exposure, and engaging competent professionals where necessary.

Liabilities may include undischarged mortgages, outstanding loans, government fees and taxes due to the government directly stemming from the settling of the estate, for example, transfer tax on death, and other debts incurred during the life of the deceased but which remained unpaid at death. It should be borne in mind that funeral expenses also count as expenses to be borne by the estate.

To establish if the deceased was indebted to any person or institution, the executor should advertise for creditors, who must provide real proof of such indebtedness. The standard of proof is quite strict to protect the estate from fraudulent claims.

A beneficiary might not be able to derive a benefit stated in the will if the bequeathed asset has to be sold to help liquidate the liabilities of the estate. In such a case, it is prudent for the executor to advise the affected person about the situation.

Communication is an important function of the executor. Advising creditors and debtors of the death and updating them on the progress of the administration of the estate can reduce the risk of fraud being committed against it. Additionally, such communication can be very useful in putting in train the process of benefit distribution, for example, cases in which “estate” is stated as the beneficiary under a life insurance policy. It is also important for beneficiaries to know what has been bequeathed to them and to understand the process of distribution.

The executor should also consistently update beneficiaries and creditors on the progress of the administration of the estate, and, in the end, should be sure to account to the beneficiaries and the creditors through the courts by filing the accounts of the administration of the estate.

An executor should not expect a free pass; it is possible to remove him through the courts, and evidence would have to be produced to support the application. Any interested party, such as a person standing to benefit from the will or a person having fiduciary responsibility – another executor, for example – may make the application.

The reasons for making such an application can include the executor not moving expeditiously thus causing harm to the estate by the assets wasting away, the executor misusing the assets, or not selling them for reasonable prices.

An executor who has a change of mind can choose to renounce the executorship by completing the Deed of Renunciation Form, and having it stamped at the Stamp Duty & Transfer Tax section of Tax Administration Jamaica, then having it recorded at the Island Record Office for it to have legal effect.

Considering the serious responsibilities of executors, people making their wills should select carefully the people they are entrusting with the responsibility of standing in their place after their demise, ensure their estate is in good order, satisfy themselves the prospective executor is committed to the engagement, and agree the quantum of any financial rewards for the efforts of the executor.

Prospective executors should satisfy themselves that they are prepared to commit their time and expertise, as well as the skill and patience they may need to face contentious situations.

Oran A. Hall, author of Understanding Investments and principal author of The Handbook of Personal Financial Planning, offers personal financial planning advice and counsel.finviser.jm@gmail.com