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In particular, the articles outlined the risks, pitfalls and not insignificant consequences of undertaking the role. Practically, however, it can be difficult to turn down such an offer, and unless handled diplomatically may have adverse commercial ramifications.
Regardless, accountants are not without alternatives to offer a client in the event for whatever reason you decide to decline executorship. Importantly, these can help to preserve the existing client-accountant relationship and protect future retainer.
Individuals may be family, friends or professionals. As will-makers are at liberty to appoint more than one executor, it is not uncommon for a combination of individuals and trustee companies to assume the role. Professionals such as lawyers or financial advisors, when acting as executors, give rise to the same set of risks and potential conflicts as exist for accountants.
Public trustee companies are state-backed and creatures of statute; i. Accordingly, there is only a handful of private licensed trustee companies because accreditation is difficult to attain and retain. The legislation contains an exhaustive list, and only those companies that are on the list are permitted to take on the role of executor and may be granted probate of a will.
Trustee companies offer extensive experience in estate administration and have systems and processes in place to deal with any situation. At times, however, their approach to family problems can be institutional and their fees high. Given each company has its own services and fee structure, will-makers should shop around and negotiate.
Notably, such options provide alternatives to an accountant from having to personally take on an executorship, without necessarily losing the estate as a client. Safeguarding your position as trusted advisor Many will-makers do not realise that executors need to engage professionals to assist with all aspects of administration. First and foremost, will-makers should be assured that most executors do not try to prepare their own applications for probate or contracts of sale of real estate or estate financials.
As such, although the accountant may not be named as executor, nominated executors may still heavily rely on the accountant to continue to deliver the service he or she provided to the will-maker — should the accountant be able and willing to do so.
In order of decreasing responsibility, such commitments can include the following. Executorship in tandem with a trustee company A key advantage of this option is that the expertise of the trustee company can provide safeguards against the many risks executorship entails. In other words, executorship would continue to generate a large volume of work for the accountant and likely impact the personal or professional life of the executor , however, the executorial risk and responsibility would be shared with a very experienced professional executor.
A downside is that cost to the client will be higher, as both executors will charge for their time, or on a commission basis. Sub executorship Although uncommon in practice, in theory there is nothing to stop a will-maker appointing a different executor to handle different parts of the estate. Will-makers can appoint a sub executor to handle something of great personal significance or of such complexity that it requires special skills and attention.
Breaking a deadlock Basically, this means that the will directs executors to refer any deadlock in decision-making to the accountant for resolution, and that all parties should be bound by the decision of the accountant. Essentially, it binds the estate to the accountant. This option could also be framed as some sort of casting vote or veto right bestowed on the accountant.
Preparing a detailed management agreement The accountant may assist the client to prepare a management agreement that will provide all executors with a step-by-step guide as to what is expected from them by the will-maker.
Notably, such agreements are usually negotiated and signed by the will-maker and any or all executors, beneficiaries, and other key people in the business or managers. The accountant, having been intimately involved in the preparation of the agreement, will be able to offer first-hand guidance to executors and beneficiaries in giving effect to the terms of the agreement. Decisions made by the board A will may stipulate that a board of family members or professional advisors be constituted to advise executors in their decisions.
The accountant may offer to be a member of this board, to which all executors and beneficiaries are able to refer questions. For example, the will may direct that all issues relating to the sale of a business be referred to the accountant as the expert or all real estate sale questions be referred to the property expert whom the will-maker knew and trusted. Provided all parties are prepared to be reasonable, most problems which arise for executors in the course of administration can usually be resolved through taking expert advice.
However, if reason does not prevail, executor or professional advice cannot in itself resolve the issue. It follows, therefore, that all wills should contain strong dispute resolution procedures. Summary It may be difficult to refuse a client paying homage to the relationship by bestowing executorial honour on the accountant, but the longer term costs of weakness at that point may far exceed the benefits of immediate acceptance. In such instances, it is open to the accountant to renounce the role and step away.
Vitally, however, renouncing is only an option if there has been no intermeddling; i. Having intermeddled, renunciation is not available and leave of the court to resign will be necessary. Peiros is an accredited Wills and Estates Specialist and runs a specialist practice in this area. Raspin specialises in the taxation of deceased estates and trusts, working with both trustee companies and legal practitioners.
Both Peiros and Raspin are published authors in this space.
Say no to being an executor and still keep the client
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