Being named executor of a Will comes with more responsibility than you might think.
From managing assets to distributing an estate, there are some important steps to get right. And getting them wrong can lead to delays, complications and, in some cases, personal financial consequences.
In this short video, Joe shares three things every executor should know before distributing an estate.
If you're an executor, or may be one in the future, this is worth watching.
Working with you,
The Millens Team
Ross Millen:
Hi. Sometimes I see things that happen once, twice or three times and it makes me think this is something that I need to share with people. And what I've seen recently is a couple of stories about directors of private companies and how this can affect you. Now, in the first case I saw, someone had set up a new company and they decided very democratically to have their wife as a director. Well, that's fine until a couple of months down the track when they went to the bank to borrow the money, the bank naturally said all the directors have to give personal guarantees. So now this gentleman's wife who had a whole lot of assets that were outside the bank's securities suddenly was being asked to give a personal guarantee that shot all of that up in flames. So we then had to change the company and make sure that she was in fact removed as a director.
So you can have a one director company. And this meant that she didn't have to give a personal guarantee. And so all the assets that she held for the family weren't included in the bank security. Now the next, the second example I had was someone had given his friend a favour and they said, look, why don't you be a director in my company and I'll be director in your company? Now that's a very bad idea because he had no idea what his friend was doing in the company. And to make matters worse, he said, oh look, I've got an application for finance here, I need you to sign as a director. And of course it contained, he didn't read the fine print, it contained a guarantee and suddenly he had a personal guarantee for his friend's company. So don't be a director for a friend's company if you're not actually involved in running the thing yourself.
And the final example I saw recently, this was one where a friend had become very ill with cancer and so asked his friend, do you mind running my company for six months? Well, then the company went into liquidation eventually because it was on the slippery slope to start with. And the liquidator came along and said, well, you are a shadow director. You were running the company. Even though you weren't on the paperwork, you were like a director and now you have some liabilities. So remember, directorships are very important. Plan it carefully. Don't just become a director because it sounds like a good idea. So if you've got any questions about private companies or directorships, don't hesitate to contact me, Ross Millen, or anyone else from the Millens team.