An Executor is the person appointed by a will maker to administer the estate when they die. An Executor’s role involves making sure the deceased’s debts are paid and their assets and possessions are collected and distributed according to the terms of the will.
Administering an estate is rarely straightforward or easy. Choosing an Executor is almost as important as the will itself. There are many tasks to perform, including looking after investments and taxation, as well as finding and proving all potential beneficiaries. It can therefore be a time-consuming exercise. It can also be emotionally draining where there are family disputes, legal claims on the estate or overly-demanding beneficiaries.
Importantly, if the Executor makes a mistake in administering the estate, they can be held liable for the financial loss.
While being appointed as someone’s Executor can be an honour, they may not have the time, expertise or inclination to perform the duties of an Executor. Many people who are nominated as Executor of a will do not know what is required of them.
For this reason, some people appoint a solicitor or a trustee company to act as their Executor, or they suggest to their executor that they ask a trustee company to assist them in their executorial duties.
Executors are usually only paid if this is specified in the will. Executors have the right to apply to the Supreme Court for payment, however the court generally does not award payment if the executor is also a beneficiary under the will.
If the nominated person does not wish to be an Executor, they can renounce the appointment by applying to the Supreme Court. They should do this before they start administering the estate, because the renunciation may not be granted if they’ve completed even some of the Executor’s duties.
Typically the Executor first needs to locate the will to ensure that any wishes regarding the deceased’s funeral are carried out.
The Executor may also need to release money from the deceased’s bank account to pay for the funeral.
Another important task is to make an inventory of all estate liabilities and assets, and ensure those assets are secure, insured as appropriate, and protected from theft, damage and any form of deterioration.
Where there is potential for family disputes, it may be prudent to change the locks on the family home, and to store valuable items like jewellery in a safety deposit box. The immediate needs of the beneficiaries must also be assessed to ensure they do not suffer any unnecessary financial hardship.
The Executor must apply to the Supreme Court to be granted authority to administer the estate. This is known as obtaining ‘probate of the will’.
The Executor could be personally liable if the estate suffers financial loss due to their actions (or lack of action). Here are a few tips to help minimise that from happening:
Some of the other important duties of an Executor include:
This information has been produced by Australian Unity Personal Financial Services Ltd (‘AUPFS’) ABN 26 098 725 145, AFSL & Australian Credit Licence 234459. Any advice in this document is general advice only and does not take into account the objectives, financial situation or needs of any particular person. It does not represent legal, tax, or personal advice and should not be relied on as such. You should obtain financial advice relevant to your circumstances before making investment decisions. AUPFS is a registered tax (financial) adviser and any reference to tax advice contained in this document is incidental to the general financial advice it may contain. You should seek specialist advice from a tax professional to confirm the impact of this advice on your overall tax position. Nothing in this document represents an offer or solicitation in relation to securities or investments in any jurisdiction. Where a particular financial product is mentioned, you should consider the Product Disclosure Statement before making any decisions in relation to the product and we make no guarantees regarding future performance or in relation to any particular outcome. Whilst every care has been taken in the preparation of this information, it may not remain current after the date of publication and AUPFS and its related bodies corporate make no representation as to its accuracy or completeness. Published: November 2018 © Copyright 2018