An Executor to a Will is the person who has been appointed to administer a deceased person's estate after they pass away.
The appointment will be made in the deceased person’s Will and is usually a family member or friend of the deceased, however, the testator of the Will is entitled to nominate any adult they see fit to manage their estate.
More than one Executor can be appointed, for example, if the deceased has two children then they can both be named and carry out the responsibilities jointly.
It is not every day that someone is appointed as an Executor to a Will, and being held accountable for winding up the legal, financial and personal affairs of a deceased person can be daunting, however, there are just a handful of key responsibilities to prioritise and sticking to this checklist will help ensure the role is carried out effectively and legally.
What are the Executor’s responsibilities?
An Executor is generally responsible for the following:
- locating the Will and attending to funeral arrangements;
- applying for probate, if required;
- collecting the estate assets and compiling an inventory;
- preserving any assets;
- paying liabilities;
- managing the deceased’s affairs; and
- distributing the assets.
Should any legal disputes arise during probate, the Executor will also be responsible for defending the estate.
Applying for probate
The Executor to a Will may apply for a 'Grant of Probate of the Will' from the Supreme Court before they administer the estate in accordance with the terms of the Will.
Preserving any assets
Two of the most important aspects of preserving the assets involves obtaining insurance for any real estate or other real property that makes up the estate and ensuring that any cash in the bank accounts belonging to the deceased are accruing interest.
The reason these steps are so important is that when the assets are distributed, they must have been maintained and not allowed to fall into a state of disrepair.
Outstanding liabilities of the estate will need to be paid from the estate, so it is necessary to ascertain what the debts are.
It is the Executor’s responsibility to undertake this task and it will typically involve first collating all of the documents that relate to the assets of the estate. These include:
- rates, levies, utility and insurance notices for any property held by the deceased;
- registration papers and insurance documents pertaining to vehicles held by the deceased;
- bank and credit card statements;
- mortgage documents;
- insurance policy documents (especially if the deceased took out funeral insurance);
- Share certificates;
- unpaid bills or other debts; and
- any other documents the Executor deems to relate to the deceased person's affairs.
Managing the deceased’s affairs
It is important that the Australian Tax Office can wind up the deceased’s outstanding obligations and this should be done before the Executor completes their role. It is usually advised that an accountant assists with the process if the deceased was still working at the time of their death, if the estate is earning income or if the estate has assets with complicated tax implications.
Generally, however, the Executor can simply:
- register the death;
- notify the Commissioner of Taxation that the person is deceased; and
- lodge a final tax return on the deceased’s behalf (if they were earning an income above the tax-free threshold at the time of their death).
Once all of the above steps have been met it is time for the Executor to distribute the assets in the way the deceased set out in their Will.
It is crucial that time limits for contesting the Will have also passed before doing so and that the relevant notice periods have expired.
Compensation for acting as an Executor
Executors are entitled to compensation for their time spent administering the estate.
'Executor's commission' needs to be applied for and is based on a certain percentage of the value of the estate, which typically sits somewhere between 0.5% to 3%. How much compensation the Executor receives will depend on the size of the estate and how much work its administration entailed.
An Executor may reach an agreement with the beneficiaries as to the payment of Executor’s commission but in the event of such agreement not being reached, the Executor may apply to the court.
Declining to act as the Executor
The named Executor/s does not have to accept the role and is within their rights to decline to act. An Executor should decline to act as soon as possible and before there has been any administration of the estate. Declining to act will simply mean that a different Executor will be appointed. The alternative Executor is usually named in the Will, however, in cases where no other appropriate party has been named, the outgoing Executor may nominate another person to act or an eligible person may apply to the Court to be appointed.
If you have been named as the Executor to a Will and would like advice on an aspect of the role or assistance applying for probate, speak to our experienced wills and estates lawyers in Cairns today.