Appointing an Executor/Trustee
Under the law, it allows the appointment of one executor to be appointed in the will. However, through experience, Peter Lee advises that at least two should be appointed but act in the order of priority, in the event the first executor is unwilling or unable to carry out the duties. For the appointment of joint executors, the testator may appoint up to 4 persons but where the appointment is in the order of priority, there can be many substitute executors being appointed, not limited to just four.
For wills of spouses, it is recommended that they appoint the same persons as the main executor and substitute executor to provide consistency in dealing with the assets and distribution.
However, if the beneficiaries in both spouses wills are different, the executor appointed need not be the same.
To be appointed as executor, the person must be at least 18 years old, not a bankrupt and trustworthy in the eyes of the testator. When the person accepts the appointment as executor he would apply for the Grant of Probate at the High Court. Usually a lawyer is engaged by the executor to obtain such an order from the court.
Once the probate is obtained, the executor, who is entitled to submit to the court to claim up to a maximum of 5% of the gross value of the estate. The court shall have the discretion to decide whether to grant such a claim taking into account the work involved as an executor such as collection and recovery of assets, payment of taxes, debts and liabilities, preparation of accounts, negotiation with creditors, management of a business and managing the expectations of the beneficiaries, arranging for transfer of assets to the beneficiaries.
In the event that the minor children of the deceased are below 21 years of age, a guardian should be appointed to have custody of the children and to provide care for them. The choice of who to be guardian have to be carefully thought of because he/she would be like a parent to your children. The person named in the will as guardian is required to apply for a guardianship order from the High Court.
Where the beneficiaries below the age 18 years old, they cannot receive assets due to their lack of legal capacity. The executors would usually be the trustees and hold on trust the assets for the minor beneficiaries.
What if the executor passes away before carrying out or completing his duties as an executor. In such a scenario, the executor of the executor’s estate will act as the executor of the deceased executor and also as executor of your estate. This is especially important where there are minor beneficiaries or a testamentary trust in the will deferring the distribution to the beneficiaries until a later date or providing for periodical distribution for a period of time.
In such a case it is important to appoint a trust company, such as Rockwills Trustee Berhad to provide for continuity, accountability and professionalism.
A trust company would also be suitable where none of the beneficiaries are able to carry the duties as an executor or there is tension between them.
Where the trust company acts as the executor and trustee, it will act in accordance with the instructions provided in the will and the testator will be ensured that his instructions will be carried out.
On the other hand, an individual is mortal and may not know what to do as an executor and trustee as there are lack of references in Malaysia and more importantly usually do not have the time or the energy to carry out the role. It is a thankless role in addition to it being tedious.
Where an individual acts as an executor, he would be learning the estate administration process of will execution while he is acting and hence there will be numerous mistakes where some may be fatal and if they are not fatal, it will cause prolonged delay in the distribution of the assets to the beneficiaries.