An essential step in creating a will is appointing an executor for your estate. It’s an important consideration, because your executor will be entrusted with making decisions about how your estate is managed, in the event that you pass away.
Often clients will appoint their lawyer as the executor of their will. But if you decide to do this, you’re placing a huge amount of trust and responsibility into your lawyer’s hands.
Of course, the vast majority of lawyers will do the right thing by you and your beneficiaries. However, that’s not always the case.
As reported in the Brisbane Times recently, Russell Biddle is a former lawyer from Biddles Lawyers (a division of Slater and Gordon Solicitors) who was found guilty of stealing $1.8 million from the estates of some of his deceased clients.
It’s a sobering reminder of the need to choose the right lawyer to act as your executor.
To protect yourself from this type of unscrupulous activity, you should ask your lawyer these four simple questions.
1. What are your fees and charges for administering my estate?
While lawyers are entitled to charge for their work in administering your estate, you should note that this is not legal work. Therefore, it should be charged at a lower rate than your lawyer’s normal hourly rate. Ask your lawyer to explain how they will charge for executorial work.
2. Does your firm separate the powers of lawyers from executors?
A lawyer’s job is to ensure the executor is acting lawfully and in the best interests of the estate. Separating these powers helps ensure your estate is handled properly.
To avoid any conflicts of interest, at McCarthy Durie Lawyers we do not allow lawyers who have been made the executor of an estate to act as the lawyer on that estate.
3. What controls do you have in place to protect my estate’s funds?
During the management of your estate, funds will often end up in your lawyer’s trust account (often due to the sale of an asset such as a house). It pays to check what controls have been set up to safeguard these funds.
For example, at McCarthy Durie Lawyers we’ve put separations of power in place for when funds are to be used from a trust. Under our process:
- Executor instructs lawyer to use funds
- Lawyer requests Accounts Dept draw a cheque
- Partner or Director of law firm signs cheque
This procedure means there are at least 3 layers of checks made before funds are drawn, significantly reducing the risk of funds being used inappropriately.
4. How else will you ensure that my estate will be managed in accordance with my will?
There are many different methods and controls which law firms can put in place to protect your interests. So before you nominate a lawyer to act as your executor, take the time to ask them about their controls, and satisfy yourself that the steps taken are robust and reasonable.
If you do not have a will, or if you’re unsure whether it is up-to-date or being handled by the appropriate people, contact McCarthy Durie Lawyers for a chat about how your will and estate can be handled. Call us on 3370 5100 or fill out the contact form here.