Why appointing a proxy and executor is vital
02 August 2021 | Opinion
Most of us have probably faced death and thought about our own mortality more often, and however daunting the prospect may be, the consequences of not preparing for this inevitability can be devastating for those left behind when a family member passes away, which is something that has unfortunately happened far too often over the last few months.
The bank has seen an alarming increase in cases where customers are faced with incapacity or the death of a loved one who had handled the finances and the family was left in the lurch regarding basic household expenses that had to be paid, for which no one had been prepared.
We stress the importance of a last will once again and we offer our customers the option of arranging to appoint a proxy to the bank account in the event that you, as ‘owner’ of the account might be temporarily incapacitated.
In the ordinary course of business, only the account holder or ‘owner’ would have access to his/her account and/or banking profiles. That means that unless you make the necessary arrangements with your bank to appoint someone you trust to manage household expenses in the event you may become temporarily incapacitated, no one else would be able to access these funds in the event of an emergency. A properly drafted mandate gives the individual you appointed proxy to use your bank account to defray household expenses if you are not able to do so.
It came to our attention that very few people have their estate planning in order, or the right executor appointed. When someone dies, the people left behind are faced with the dual challenge of coping with bereavement while trying to make sense of a very complex estate administration process for which they are entirely unprepared.
It is also vital for businesspeople to ensure that their affairs were in order. If you are a sole trader or in a CC or PTY – albeit with one or more members, directors or shareholders, planning for business continuity here must also be in place, to guarantee business continuity and proper management of the affairs in the event of your passing.
It is therefore very important to nominate the proper executor and the following should be considered:
• The most important consideration is that your nominated executor should have the skill and experience required to adequately perform this highly complex task. Nominate a specialist estate administrator with the necessary legal and tax knowledge. Many people nominate an executor solely based on the discount offered on executor fees without much consideration for the competencies and skills available.
• Relying on one specific individual may cause a delay in wrapping up your estate, they could possibly pre-decease you, retire or for any other unforeseen circumstances be unable to perform the duties that you entrusted them with. Consider nominating an executor, who doesn’t rely on one specific individual but who has sufficient skilled staff to perform this function, while at the same time having sufficient regional and national representation which will aid interaction between beneficiaries (who might live in different towns) and the executor.
• Ultimately it all comes down to trust. Do you trust your nominated executor enough to step into your shoes and protect what is important to you, whilst having the necessary understanding of the estate administration process?
Access an experienced and knowledgeable executor to guide you through the complex and time-consuming deceased estate administration process as well as help with the numerous practical tasks which need to be performed. It is a very difficult time for families and FNB’s team of specialists is here to assist with the administration of the most complex estates.
*Taswald July is FNB’s Group Legal Advisor.