I am an executor of a Will
When a person makes a Will, they need to appoint someone to administer their estate – this person is known as the executor.
What is your role as an executor?
As executor, your role is to carry out the directions contained in the Will and legally administer the estate after the will-maker has passed away.
Many people are unsure of what is expected of them, and it is important that you:
are reliable and act responsibly
understand the legal, financial and taxation implications of the work involved
are ideally located in NSW (the Supreme Court prefers to grant probate to a NSW resident)
can maintain independence if there is the added complication of disputes.
What do you need to do as an executor?
As executor, you will be required to complete the following tasks:
Generally direct family members arrange the funeral; however, if there is no family or they are unwilling to do this, you may be required to make the arrangements.
If you are unable to access bank accounts, costs may be at your expense until reimbursement from the estate can occur.
|Confirmation of assets and debts||This is done by writing to financial institutions, service providers, government departments, relevant companies, searching records (especially Land and Property Information) and may also require preparation of an inventory of household goods and personal effects|
Protecting the assets of the estate
This may involve storing valuables such as jewellery, ornaments or paintings or investing surplus funds after debts have been paid, and arranging appropriate insurance.
You can be held personally liable for any damage to property which has not been secured or insured.
|Notification to banks, businesses and government agencies||Letting these organisations know of the person’s death ensures that liabilities do not continue and that income such as pensions are stopped.|
|Realisation of assets||
Should you need to sell assets before you distribute the estate, you will need to ensure that you receive a fair market price.
If not, the beneficiaries may be able to sue you personally to recover the shortfall.
|Accounting||Beneficiaries are entitled to a report of all administration activities and if dissatisfied with your performance as the executor may approach the court to have you removed.|
|Tax liabilities||If you have distributed all the assets of the estate to the beneficiaries and the estate still owes money to the tax office, you are personally liable to make the payment.|
You must exercise caution when determining who is entitled to receive money or assets under the terms of the Will.
You may be liable for a mistaken interpretation of the Will or failure to identify all the beneficiaries.
What do you need to be aware of as an executor?
Finalising a person’s estate can be daunting and emotionally challenging and can be time consuming.
As an executor, you need to consider:
|The time it takes to finalise an estate||
To receive protections under NSW law, an estate should not be distributed any earlier than six months after the date of death, and often it takes 9-12 months to finalise an estate.
This can be due to complex financial matters, a contested Will or if there is no Will and beneficiaries need to be located.
However you must ensure that the administration of an estate is commenced and completed within a reasonable time.
If it can be demonstrated that you caused any undue delays resulting in a financial loss, then you could be personally liable for this loss.
|Your ability to understand the legal and financial requirements||This can be difficult if you do not have relevant experience in law, accounting, business management or finance. If the estate is being sued, or intends to sue another party, you take this on as the executor.|
|Taking on personal and financial liability||You may be personally and financially liable if you mismanage the estate.|
Can you refer executor duties to someone else?
Just because you have been nominated as the executor does not mean you must accept – and you are under no legal obligation to act.
There are many reasons you may be unable or unwilling to accept the role, including:
living interstate or overseas
not having time for the many demands
concerns about having to manage family issues
not wishing to be embroiled in stressful court action if the estate is sued
concerns about taking on the risks.
If you have been appointed and do not wish to act as executor, you can ‘renounce' and transfer the role to an independent professional executor such as NSW Trustee & Guardian.