There are 'great and many' misunderstandings related to the role and liabilities of a non-professional executor, according to Equity Trustees.
Most Australians are 'comfortable' appointing a non-professional executor to their will. However, Anna Hacker, wills and estates accredited specialist at Equity Trustees, said the responsibilities of an executor are often more complex than anticipated.
"How can an inexperienced executor expect to deal with such issues as capital gains tax, income tax, any investment decisions that may be required, superannuation balances, and the correct interpretation of ambiguously expressed directions?" she said.
While many Australians appoint a non-professional executive to save money, Equity Trustees said non-professional executors are entitled to seek executor's commission for their duties.
"The reality is that any executor can charge for their efforts and we have seen an increase in the number of executors charging across the board," she said.
Ms Hacker adds that an 'inexperienced' executor can cost the estate and the beneficiaries significantly.
"In fact, [the executor] could be liable to the beneficiaries for any negligent management of the estate that may arise from their lack of expertise, and lack of understanding about the role of executor is not an excuse," she said.
In addition, Ms Hacker said Australians often don't realise that if their non-professional executor passes away while administering their estate, the executor of the originally appointed executor automatically takes over.
"That person could be someone who has little or no knowledge of your financial affairs, be unknown to your family, or simply not competent to manage the tasks required," Ms Hacker said.
Ms Hacker told InvestorDaily her clients often misunderstand several other areas of estate planning, including superannuation, taxation and insurance.
