Help! I am the Executor of a Will

If you have been appointed as the executor of a Will you may be wondering what that role entails.  You may be a professional, a family member who has a vested interest in the outcome or merely a friend who has been brought into a potentially fraught situation.  For an executor, it is essential to know what to expect and what your responsibilities are.  We can help.

What to do when someone dies

When someone dies there are things that must be done immediately and things that may take 12 or more months to action and resolve.  Who does these ‘things’ and what are they?  In many cases it is the executor of the deceased’s Will who must act.  Usually, the executor is a family member, a friend, a professional trustee or a combination of the above.  The Will maker has chosen you because you have the skills and experience to occupy that role, have a vested interest in administering the estate (for e.g., you are a beneficiary) or you are a trusted person.  If you do not feel equipped for the role, being an executor may be an appointment you wish to refuse. 

Download a copy of our booklet ‘What To Do When Someone Dies’ to find out what to do within hours, days, weeks and months of a death.

Fiduciary Duty

The executor’s main duty is to carry out the Will maker’s instructions to manage the affairs and wishes of the deceased.  An executor is considered a fiduciary.  A fiduciary is someone who has a legal duty to act in the best interests of another person or entity, and to manage their affairs prudently and in good faith.  In the case of a Will, the executor has a fiduciary duty to act in the best interests of the beneficiaries of the estate, and to carry out the wishes of the deceased person as expressed in their Will.  The executor must act with honesty, loyalty, and prudence, and must avoid any conflicts of interest that might compromise their ability to act impartially. 

Read this article for more information about an executor’s fiduciary duty.

Read this article for information about how to deal with bankrupt beneficiaries.

Read this article for information about how to deal with beneficiaries with a disability.

Locate the Will

One of the first things to establish is whether the deceased had a Will and if an executor has been appointed.  Hopefully, the Will maker has told someone where their Will is stored but if a Will is not easy to locate, family members will have to do some detective work, including advertising in legal industry publications, the local or national newspapers and/or enquiring with the Law Society of the State where the deceased lived.  

Listen to this radio interview with our Principal Andrew Andreyev to find out what to do if a Will cannot be located.

Once you have located the Will maker’s last Will, it is very important that you do not remove any staples or fastenings or mark or damage the original document in any way prior to Probate.  ‘Damage’ caused to a Will by these sorts of actions may render it invalid or at the very least cause delays.  If you locate more than one Will, you must determine which is the most recent and valid Will.  You may need a solicitor’s assistance with this especially if there is the possibility of undue influence, or lack of capacity. 

It is likely that someone will ask you for a copy of the Will before Probate, but your obligation to provide such a copy in that situation is limited to certain people, usually the named beneficiaries of the Will. 

Do I have to ‘read’ the Will?

We are often asked by clients who are appointed as an executor of a deceased estate whether they need to gather the family around and ‘read the Will’ out loud.  While this is often the kick off point for an Agatha Christie-style murder mystery, this formality is not required in Australia. 

Funerals 

If you have been appointed as an executor, you generally have the right under the Will to control the disposition of a deceased person’s body.  Therefore, one of your first responsibilities is to decide whether the deceased should be buried or cremated, what sort of funeral or memorial service should be held, where it should take place and even what wording should go on the tombstone or memorial plaque.  If the deceased has recorded their wishes or directions in their Will, or left written instructions with a funeral director, you have something to go on.  If it has been left to the executor’s discretion, there may be negotiations with family members and other stakeholders about what will be acceptable.  If agreement cannot be reached, you must make the decision.  Even at this early stage, disputes may escalate to formal court proceedings. 

Unless the deceased organised a pre-paid funeral, the estate will pay or reimburse the cost of the funeral.  If there are insufficient funds, in some cases, there may be assistance for family members from Centrelink or the Department of Veterans Affairs to pay for a funeral. 

The funeral director will also give you a copy of the official Death Certificate if it is ready.  You may receive an interim Death Certificate is there is any inquiry as to the cause of death, in which case the final Death Certificate may take months.  You will need the Death Certificate to administer the estate and apply for probate so you must keep it in a safe spot. 

Identifying and valuing assets

The executor is responsible for identifying and valuing the assets and liabilities of the deceased person’s estate, which may include property, investments, bank accounts, superannuation and debts.  If the deceased used the services of an accountant or financial planner, they will be an important source of information. 

  1. Locate important documents: The executor must locate documents, such as bank statements, property titles, and insurance policies.  These documents will provide information about the deceased person’s assets and liabilities.  There are databases that can be searched to locate bank accounts, real property, superannuation, shareholdings etc. and lawyers experienced in estate administration can assist you.  We often find that a person who has been an executor will have very good record keeping themselves after trying to locate someone else’s paperwork! 
  2. Notify relevant parties: The executor must notify relevant parties of the deceased person’s passing, such as banks, superannuation funds, and government agencies such as Centrelink and the Department of Veterans Affairs.  This will allow them to freeze or close accounts, stop payments, and provide information about the deceased person’s assets and liabilities. 
  3. Identify personal belongings: The executor should identify all the deceased person’s personal belongings as soon as possible.  Access to the deceased’s home and other property, including their car, may need to be controlled by the executor until this has been done. 
  4. Value assets: The executor must value each asset of the estate, either by getting a professional valuation or using a market value estimation.  This will provide an accurate picture of the estate’s total value. 
  5. Identify liabilities: The executor must also identify all the deceased person’s liabilities, such as debts, mortgages, and unpaid bills.  You must obtain copies of all relevant documents and statements to confirm the amount owing. 
  6. Value liabilities: The executor should value the deceased person’s liabilities by determining the amount owed and any interest or penalties payable. 
  7. Determine the net estate value: Once all assets and liabilities have been identified and valued, the executor can determine the net estate value, which is the total value of the estate minus any liabilities. 

Applying for probate

Once the deceased’s assets and liabilities are identified, in most cases, the executor will need to apply to the Supreme Court for probate which is a legal process that confirms the validity of the Will and gives the executor the authority to administer the estate.  There are some circumstances in which probate is not required which are discussed in this article. 

Read this article to identify the documents required for probate. 

Andreyev Lawyers offers a cost effective and efficient probate application service. Call us on 1300 654 590 or email us to see how we can help you.

Paying debts and taxes

The executor is responsible for paying any outstanding debts as well as fees and taxes owed by the deceased person, using the assets of the estate.  Fees and taxes may include: 

  • Capital Gains Tax (CGT): If the assets in the deceased estate have increased in value since they were purchased, the estate may be subject to CGT.  However, if the assets are passed on to beneficiaries, CGT may be exempt or reduced under certain circumstances. 
  • Probate or estate administration fees: This is a state tax that is imposed on the value of the deceased estate that needs to go through probate.  The rates vary from state to state. 
  • Income tax: The deceased estate may need to pay income tax on any income earned before and after the date of death until the assets are distributed to the beneficiaries.  The tax rate is the same as individual income tax rates. 
  • Goods and Services Tax (GST): The deceased estate may be liable for GST on certain assets, such as real estate, if the estate is carrying on an enterprise. 

It is important to note that the taxes a deceased estate needs to pay will depend on the individual circumstances of the estate. It is recommended to seek advice from a professional tax advisor or solicitor to ensure that all tax obligations are met. 

A note of caution, be aware that as an executor you may be personally liable for any unpaid taxes and liabilities if you distribute the assets estate before they are paid. 

Distributing assets

Once all debts and taxes have been paid, the executor is responsible for distributing the remaining assets of the estate in accordance with the instructions in the Will.  At the end of the administration of the estate, we suggest you require beneficiaries to sign a waiver document acknowledging that they have been paid their entitlements in full. 

Keeping accurate records

It’s important for the executor to keep accurate records of all transactions and activities related to the administration of the estate, as they may need to provide evidence to beneficiaries, creditors, or the courts.  In some cases, the executor may need to seek professional advice to ensure that they are complying with their legal obligations and making informed decisions about the administration of the estate. 

Summary

As an executor of a Will, you have a crucial role in ensuring that the wishes of the deceased are carried out in accordance with their instructions.  Your duties are likely to include: 

  • Locating the current, original, and signed Will – An executor must administer the estate in accordance with the terms of the Will. 
  • Organise funeral – An executor may be required to make decisions about the deceased’s body and funeral arrangements.
  • Confirm all assets and debts of the estate – An executor must identify the assets and liabilities of the estate. 
  • Obtaining a grant of probate – An executor may be required to apply for a grant of probate that allows you to administer the deceased’s estate. 
  • Pay debtsAn executor must ensure the deceased’s debts and liabilities are paid before assets can be distributed to beneficiaries set out in the Will.
  • Distribute the estate – An executor must distribute the assets of the estate in accordance with the terms of the Will. 

Even for someone with experience, the administration of a deceased estate is a demanding job and often involves many (sometimes, emotional) stakeholders, complex testamentary directions and engagement with courts, accountants, lawyers, government departments (including the relevant lands titles office and the Australian Taxation Office), banks, and other financial institutions.  Ideally the process is smooth sailing, but you must be prepared for questions or challenges and in some cases disputes, and most importantly you must be prepared to keep written records and be able to justify your decisions.  Having an experienced legal professional to call upon, to answer questions and to help you act will go a long way in facilitating the process and keeping stress and disagreements to a minimum. 

If you have been appointed as an executor of a Will and would like to talk to someone about your new role, please contact us on 1300 654 590 or email us.  We will guide you through your obligations and provide you with a plan to ensure the Will is carried out as intended. 

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