The Role of an Executor
The role of an executor in the administration of an estate carries with it serious responsibilities and the person or organisation appointed is responsible for ensuring that all assets are accounted for, all debts are paid, and that the beneficiaries receive their inheritance in accordance with the terms of the Will.
The following steps must be undertaken by the executor:
The Will may contain funeral instructions or there may be estate matters requiring urgent attention. It is important that you DO NOT clip, pin or attach anything to the Will as this may lead to significant legal complications when applying for probate.
The executor must file various legal documents at the Probate Registry, including the original Will, the death certificate, and a statement of all assets and liabilities as at the date of death of the deceased person. Until probate is granted by the Supreme Court, the executor does not have the legal authority to take any further action in terms of administering the estate.
The executor must collect and protect all of the property of the deceased person as soon as possible or practicable. This may involve putting valuables such as jewellery or paintings into storage, such as in secure storage with a bank, or investing surplus funds.
It is important to make sure all property (including valuable items such as cars or antique furniture) is insured, as the executor is liable for the security of all of the deceased person’s assets.
To confirm all assets and debts of the estate the executor must write to the deceased person’s financial institutions and insurance companies and relevant companies such as utilities providers. The executor will also search records to see if the deceased person owned any other assets (such as land which can be checked through the Lands Titles Office). It is also recommended that the executor prepare an inventory of household furniture and personal effects.
All relevant government agencies (such as Centrelink and Veterans’ Affairs) must be notified of the death of the deceased person to ensure liabilities are discontinued and income (e.g. pensions) are stopped.
You must keep full and accurate records of all transactions (e.g. receipts for cash payments made and assets that have been transferred, including dates and amounts), from the date of the death of the deceased person to the conclusion of the administration.
Finally, if you become aware of further assets or liabilities after you have completed the administration, it will be your responsibility to administer them in the accordance with the instructions contained in the deceased person’s Will.
This means that all bank accounts in the deceased person’s name must be closed, and the executor may also need to sell or transfer shares, property, and collectables.
The executor must ensure that all of the deceased person’s debts, liabilities, and outstanding taxes are paid before any assets can be distributed to beneficiaries of their Will.
The deceased person’s taxation affairs need to be finalised. Personal income tax returns, up to the date of death, must be lodged, any estate taxation matters need to be attended to, and if relevant a trust taxation return prepared and lodged.
The executor is required to manage any issues relating to the sale or transfer of estate assets, and ensure beneficiaries are provided with any relevant capital gains tax information relating to assets that have been transferred or sold during the course of the administration of the deceased person’s estate.
Once payment of debts has been completed, the executor must then distribute any remaining assets according to the instructions in the deceased person’s Will. Distribution can only occur if there are no further claims against the estate and the following steps have been completed:
- The grant of probate has been received
- The executor has gathered all of the assets of the estate
- The executor has sold any assets, shares, or property as directed in the Will, or as needed to fulfil the requirements of the Will
- All debts and liabilities have been paid
- Where required, the final taxation return has been prepared and lodged, the Australian Taxation Office’s assessment has been received and either there is no tax bill, or if there is a tax bill it has been paid
Legacies, where specific sums of money are left to certain beneficiaries, are paid first, followed by specific bequests of personal effects, and finally cash or assets are transferred to the beneficiaries named in the Will.