5 MinsMay 2, 2022
Madhuri Shah, 73, is thinking of writing her Will. She is aware that she is getting on in age, and as a heart patient, she should make all arrangements keeping the inevitability of death in mind.
Madhuri, a homemaker all her life, inherited from her husband a couple of flats, investments in shares, mutual funds and bank fixed deposits.
All told her net worth is about Rs. 10 crore. Her family includes one son, two daughters, their respective spouses and grandchildren. She wants to divide her estate between her family members and also leave some money to a couple of charities.
However, she is worried about who will divide her estate and ensure her last wishes are carried out. Madhuri consulted her financial advisor who advised her to nominate an executor in her Will.
Who is an Executor of a Will?
An executor is a person who is appointed by the testator – the person making the Will -- to implement it. The Will should mention the executor’s details. Such a person derives her authority to administer and divide the estate as per
the dictates of the Will.
Who should be an Executor?
Legally speaking, the testator can appoint anyone above 18 years of age and sound mind to be an Executor. Ideally, Madhuri should nominate someone she trusts implicitly to carry out her wishes. Ideally, she should choose an executor younger than,
some who is likely to outlive her. Such a person can be a family member, friend or even a professional like a lawyer or chartered accountant.
It might, however, make sense to check with potential executors about their readiness to accept such a responsibility. This is to avoid legal complications at a future date.
[Also Read: What is a Will and how to write one?]
What are the responsibilities of the Executor?
The executor should gather details of all the assets mentioned in the Will and ascertain any outstanding liabilities against the estate. Once these liabilities are extinguished, the executor should distribute the remaining assets as per the directives
of the Will. She has the authority to liquidate any investments to distribute the assets among the heirs. However, while taking such decisions to liquidate investments, she should take extreme care to ensure that the estate is not adversely
affected. It might even be a good idea to inform the heirs of such decisions in advance to avoid legal disputes.
However, in Madhuri’s case, this may not be necessary given the size of her assets, and she could appoint a trusted family member or a friend as an executor.
Individual or Professional Executor?
In the case of larger estates, it makes sense to appoint a professional law or chartered accountancy firm as an executor, as administering such estates can be a complex task requiring specialized knowledge. One should keep in mind that firms charge
a fee for their undertaking such a responsibility. This could be in the form of a flat fee or a percentage of the estate.
However, in Madhuri’s case, this may not be necessary given the size of her assets, and she could appoint a trusted family member or a friend as an executor.
Disclaimer: The Source, a content creation and curation firm has authored this article. Axis Bank does not influence the views of the author in any way. Axis Bank and The Source shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision. Names mentioned in this article are fictitious in nature and only for explanatory purposes
