Whilst being named someone’s executor can be viewed as an honour and a privilege, the role comes with significant responsibility.
As an advisor, I generally encourage my clients to consider a few matters before they select their executor.
For example, does the person get along with everyone in the family? If not, are they likely to respect advice and acknowledge procedure? Do they have experience managing funds? Are they likely to seek advice on matters they lack experience and knowledge on?
Acting as an executor is not just about ticking boxes. It can be a confronting role, especially if there is a claim made against the estate, or a beneficiary that is particularly difficult.
Before selecting who should act as your executor, it helps to know what role the executor has in your estate, and the things that they have to do.
Below is a summary of the tasks that an executor must usually attend to.
Locating the Will
If the whereabouts of a deceased person’s Will is not already known, normally the first task is to locate the original Will.
This task may require a search of your home, personal belongings and paperwork or contacting your accountant or solicitor.
To save an extensive search for your Will, it is beneficial to at least notify your executor that you have appointed them and let them know there whereabouts of your Will.
The executor is responsible for your funeral arrangements, including whether there is a burial or cremation.
Organising a funeral can be a confronting task for an executor, therefore it is useful to include in your Will or a personal note to your executor stating any specific requests and your preference for burial or cremation.
As a matter of practice, if the executor is someone removed from the family, I would normally recommend to them that they consult the family in relation to the funeral (as much as reasonably possible) with the family to avoid any unnecessary disputes.
Determining the assets
The executor must ascertain the assets and liabilities of the estate.
Once the executor has received a Death Certificate, they will have to enquire with the various banks and institutions to determine what accounts exist, the balances, any loans, mortgages, credit cards etc.
Applying for probate
Once the executor has an understanding of the assets and liabilities of the estate, it may be the case that they must make an application for probate.
What is a grant of probate?
Probate is an order of the Court in favour of the executor in relation to the last Will.
Once the executor has received a grant of probate, they will be entitled to call in and deal with your assets including closing bank accounts and receiving the funds and transferring any property to their name as personal representative of the estate.
Dealing with any claims against your estate
If there is a risk of a claim against your estate, your executor must address the claim.
In the case where an eligible person (such as a spouse or child) has been left out of the Will, the executor may receive a request for a copy of the Will and information on the assets and liabilities of the estate.
It is important that an executor does not ignore any potential claims against the estate, but rather deals with them and seeks advice if necessary.
The executor must ensure that any individual tax returns of the deceased are finalised (up to the date of death), as well as any tax returns are lodged on behalf of the estate.
Even if an executor receives advice that a tax return is not necessary, I generally recommend that a Notification of Deceased Person is lodged with the Australian Taxation Office.
Distribution of the estate
The time to administer an estate can vary depending on the assets and liabilities and whether there is a claim against the estate.
However, an executor should aim to complete the administration and distribute the estate to the beneficiaries within around 12 months from the date of death.
If you have been named as an executor and require any assistance, please do not hesitate to contact us.