What to be aware of when administering an estate
Written by Stephanie Crouch
Administering an estate can be a complex and time-consuming process especially if you have been appointed as the executor. The role can be challenging and a lot of work. There are strict laws and rules that must be followed. Before you begin, you should consider:
Time it takes
The time it takes to administer an estate varies widely. Factors such as how complex the Will is or selling property can play a part. Contested Wills or locating missing beneficiaries can also cause delays.
An executor must administer the estate within a reasonable time. If you cause delays that have resulted in a financial loss, you could be held responsible.
Applying for court approval
An executor needs to apply to the Supreme Court for a ‘grant of probate'. This is official court approval that a Will is legally valid. It gives you permission to administer an estate.
After probate is granted, you must wait six months before you can distribute the estate. This allows anyone who is owed money from the estate to lodge a claim.
Companies such as banks and superannuation funds generally require probate before they will release any assets.
It takes roughly 7-12 months to finalise a simple estate. Complex estates can take even longer.
Financial responsibility
It is important to know that an executor may be personally and financially liable if you:
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don’t properly pay all debts and expenses
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don’t properly protect assets and they are damaged
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don’t get a fair market price for any property sold
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distribute the estate early and money is still owed to the tax office.
It’s ok to say no
Many people see it as an honour to accept the role of executor. However, finalising a loved one’s affairs while you’re grieving can be challenging and stressful.
You do not have to accept the role of executor. Reasons why you may be unable or unwilling include:
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living interstate or overseas
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not having time for the many demands
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concerns about having to manage family issues
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stressful legal action if the Will is contested.
If you do not wish to be the executor, you can ‘renounce' and transfer the role to an independent professional executor. You should do this as soon as possible after the person has died.
Definitions
- renounce
Formally give up a role. For example, giving up the role of executor under a Will.
- assets
All of a person’s property including real and personal e.g. bank accounts, realty, shares in companies, cash etc.
- beneficiaries
People, charities and organisations who you decide will receive or benefit from your estate when you pass away.
- independent
Free from outside influence or control.