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Acting as an Executor for a deceased estate – your plain English guide

 


The role and duties of an Executor of a Will

The primary role of an Executor is to carry out the wishes (contained in the Will) of the person who has died. It will include attending to personal, financial and legal affairs. Sometimes you can do this yourself but sometimes it can be made much easier with the guidance and assistance of a lawyer.

If the person dies without a Will (called ‘dying intestate’) or where no Executor is named or, for a number of reasons a named Executor cannot or is unwilling to Act, an Administrator will be appointed by the court. An Administrator effectively performs the same duties as an Executor.

Executors and Administrators must act in accordance with the Will and in accordance with the law at all times.

As long as the Executors and Administrators act in good faith and in accordance with the law, then they are indemnified by the estate for any legal fees or issues that arise.

The role of an Executor or Administrator

When someone dies, they usually leave behind assets which are made up of the things that they owned including, for example:

  • Personal possessions (a car, jewellery, a boat, caravan etc);
  • Real estate;
  • Cash in the bank;
  • Superannuation (although sometimes this does not form part of the estate);
  • Nursing home bonds; and

They also leave behind debts and liabilities, for example:

  • A mortgage;
  • Credit-card debts;
  • Utility bills (phone, electricity, gas etc);
  • Hospital bills;
  • Pharmacy bills; and
  • Personal loans.

Debts need to be paid out to the relevant creditors and assets need to be collected to be distributed to the beneficiaries named in the Will.

Step-by-step duties of an executor and administrator

Locate will and determine terms of Will (for Executors)

Funeral arrangements

  • Arrange the funeral. Most banks will release funds from the deceased's account for funeral expenses before a Grant of Probate has been obtained.
  • Check whether the deceased left any specific instructions in the Will regarding the funeral arrangements or the disposal of the body.

Grant of Probate or a Grant of Letters of Administration

  • This is a court order confirming the validity of the Will, or in the case of there being no Will, a court order confirming that the person applying has the right to be and is appointed to be, an Administrator.
  • Documents must be filed in the office of the Registrar of Probate in the Supreme Court of Victoria to obtain a Grant of Probate or a Grant of Letters of Administration.
  • The Registrar of Probates will decide whether the deceased's Will is legally valid and if so, make a Grant of Probate or if the applying person has a right to be an Administrator, make a Grant of Letters of Administration.
  • Most beneficiaries are normally required to wait until a Grant of Probate or a Grant of Letters of Administration is made before any distribution of assets.
  • At this time, the Will becomes a matter of public record.

The estate should not be distributed before the expiry of 6 months from the date a Grant of Probate or Letters of Administration was made. If an Administrator or Executor distributes the assets before this time, he or she can become personally liable for the funds distributed in the event the Will is challenged.

There is no normal timeframe in which an estate has to be finalised. However, an estate that has no challenges or complications is usually finalised in 6–12 months from the Grant of Probate or Administration.

A number of things can delay finally distributing the Will and these include:

  • Family dynamics and disputes;
  • Disputes between Executors;
  • Disputes from beneficiaries;
  • Difficulties in getting estate assets ready for sale;
  • The timing in which properties are sold;
  • Delays from institutions holding assets; and
  • A claim by a beneficiary for further and better provision.

Tax returns

  • Have an accountant prepare the deceased’s final personal and business tax returns up to the date of death.
  • Before the final distribution assets, have the accountant prepare the estate final tax return from the date of death to the anticipated date of distribution.
  • File tax returns and ensure all tax liabilities are paid to avoid personal liability by Executors for any unpaid tax.

Distribute the estate

  • Collect and/or sell the deceased's assets (if selling assets, the funds from sale form cash components for distribution to beneficiaries) and pay all the deceased's debts, including tax.
  • Distribute the balance of the estate according to the directions contained in the deceased's Will.
  • The duty to distribute the estate may require continuing obligations. For example, if the beneficiaries are young children, the executor must invest the estate funds (and manage the investment) until they are old enough to receive their share.

Maintain records of assets and distribution

  • Keep a record of money received and paid out.
  • Provide a copy of the Will and any other relevant document to any residuary beneficiary named in it.
  • Residuary beneficiaries are the people who inherit the remainder of the estate after special gifts have been made.

Ongoing obligations of Executors

Some Wills involve Executors in ongoing obligations in relation to the estate.

For example, gifts to young children will be held in trust until they reach the age when the gift vests - usually 18, 21 or 25 years of age.

Executors can claim costs and estate expenses

An Executor is entitled to claim all costs and expenses incurred in administering the estate and is usually entitled to an Executor’s commission.

  • Executors can apply to the Supreme Court of Victoria for an Executor's commission of up to 5% of the estate’s value.
  • Trustee companies can charge up to 5% of the estate’s capital value for administering the estate.
  • Trustees can also charge up to 6% on all income received by the estate.
  • Sometimes the Will authorises these commission charges to be taken or alternatively, the residuary beneficiaries must consent to an agreed rate of commission.

Hidden concerns Executors need to be aware of

There are a number of hidden tricks that can expose an Executor or Administrator to being personally liable to the estate.

This is where an experienced estate planning lawyer can help you and protect you.

With our experience in applying for Probate, Letters of Administration and other complex grant applications, we can prepare the court application and advise you on the necessary steps to administer the estate that would prevent the Executor or Administrator being personally liable to the estate.

We can prepare all the legal documentation necessary to:

  • transfer assets;
  • sell assets;
  • arrange a statement of account of the estate;
  • hold money for the estate;
  • invest money for the estate;
  • advise on transactions; and
  • manage challenges to the estate.

Getting help

Choosing the right lawyer for you is crucial to getting optimal results.

At David Davis & Associates we will assist you by preparing all legal documentation necessary to apply for a Grant of Probate and work with you in administering the estate.

We will guide you through the administration process to ease the stress in the process of losing a loved one and administering what they leave behind.

Contact David Davis Lawyers (including during COVID-19)

Phone: 03 9014 1299
Email: info@ddavis.com.au
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Book an online chat with us. Free 15-minute consultation

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