Often when you are asked to be the executor of a will, you accept the role without truly knowing its parameters. While not wishing to deter anyone from accepting the responsibility to carry out this very important role, you must understand what it entails. When a member of the family or a close friend asks you to be the executor of his or her will, you should seek some legal advice before you say yes.
Often the words ‘executor and trustee’ of the will are included together. The roles are often combined these days, with the trustee aspect relating to any testamentary trust set up under the will. For example, if a child under 20 receives a distribution under a will, he or she must wait until the specified age before receipt of such distribution. In the meantime, the executor oversees both the investment of those funds and how access may be affected based on the terms of the will.
The executor works closely with the lawyer for the estate of the deceased to co-ordinate all aspects of the wishes as set out in the will. These jobs include: organising and accepting responsibility for the funeral; the obtaining of Probate (which is a court document confirming to the world at large that the executor stands in the shoes of the deceased); the distribution of chattels and cars; the itemising of all assets and liabilities of the estate; the investigation of any issue that arises as a result of that itemising; the transfer and distribution of all property and cash and other investments once known; together with the closing off of all matters ending with a final tax return for the estate.
While your lawyer helps with every step of the way, it is your role as executor that ensures a life well lived is recorded and signed off appropriately.
The new Trust Act 2019
Trusts are widely used in New Zealand, with the main focus in recent years being on family trusts. These have been utilized in relation to relationship property, succession planning, risk control, and as a vehicle for enabling blended family outcomes; to name but a few.
The previous legislation around trusts has not been overhauled or reviewed for a long time. Aligned to that are a myriad of court cases setting up common law positions, both old and new. Often the current issues fit like square pegs in round holes. Many common-sense outcomes in today’s world have been frustrated by the legislation lagging behind. Trust law is no exception.
So, the new Trust Act 2019 is very welcome. While passing into law on 30 July 2019, it does not come into effect until 30 January 2021. The interim time frame allows a true knowledge of what is proposed to be digested; with variations to be made both to documentation and best practice systems. These are being prepared and introduced so immediate compliance with the new parameters are completed and expected.
A heads up then about compliance requirements. You will be reminded about the duties required of those running the trusts, namely the trustees and settlors; that the term of a trust may be longer than the current 80 years; that those who benefit from them may be able to obtain more information in certain circumstances; that written documents must be held and easily accessible; and that reviews of trusts decisions will be more prevalent.