Being an executor is a big responsibility, especially while dealing with the loss of a loved one. An executor is the person named in a Will to manage a deceased person’s estate (property, finances, etc.) and carry out their final wishes. The role entails important legal and administrative tasks, which can be even more challenging when you’re grieving.
Below is an overview of an executor’s role in dealing with a deceased estate. The information is general only and does not constitute legal advice. If you’ve been appointed an executor or can’t find a family member’s Will after their passing, an estate lawyer can provide the advice and guidance you need.
Step 1: The First Few Days
Your immediate priority is to handle the practical matters of the death.
- Receive the Death Certificate: You will need the Death Certificate of the deceased first. If you are not the informant (the person who informs the Registry of Births, Deaths and Marriages of the death and receives the Death Certificate from the Registry), you will need to contact that person to obtain the original Death Certificate.
- Locate the Will: You will need to locate the deceased person’s original Will, which will provide instructions and guide your actions as executor. It will name you as the executor and detail how the estate should be distributed.
- Arrange the funeral: Some Wills contain specific instructions for funeral arrangements. If so, you are responsible for carrying them out. It is also common for the deceased’s family members to be involved in the funeral arrangements. Funeral costs are typically paid from the estate.
- Secure the assets: As executor, you will need to protect the assets of the estate. This could mean securing the deceased’s home, ensuring valuables are safe, and making sure any vehicles or other assets are insured.
- Notify key people: The beneficiaries named in the Will, as well as family members and any close business associates, should be notified of the death.
Step 2: The Formal Administration Process
The formal administration of the estate typically begins sometime after the funeral and initial shock passes.
- Gather information about assets and liabilities: You need to get a clear picture of the deceased’s financial situation at the time of their death. This involves identifying all assets (e.g., bank accounts, shares, property, superannuation) and liabilities (e.g., credit card debt, loans, mortgages).
- Apply for a Grant of Probate: A Grant of Probate is a legal document issued by the Supreme Court. It confirms the Will is valid and officially authorises you to act as the executor. Generally, a Grant of Probate is needed to deal with significant assets like real estate or substantial bank accounts.
Applying for probate involves filing the original Will, a death certificate, and a statement detailing the estate’s assets and liabilities. Specific forms and procedures apply in different jurisdictions across Australia, and it’s important to get this right to avoid delays. An estate lawyer can advise if probate is required and prepare the application for filing with the court.
- Advertise for creditors: It may be required or recommended to place a public notice in a local newspaper and the Government Gazette to allow creditors to claim against the estate. This important step can help protect you from personal liability should an unknown debt surface after you have distributed the estate. A lawyer can assist with this.
Step 3: Paying Debts and Distributing the Estate
With the Grant of Probate in hand, you have the legal authority to manage the estate.
- Pay all debts: Before you can distribute any assets to the beneficiaries, you must pay all the estate’s legitimate debts. This includes funeral expenses, outstanding taxes, and any other liabilities. Be careful here – if you distribute the estate before all debts are paid, you could be personally liable for any remaining amounts.
- Attend to tax matters: You may need to lodge a final tax return for the deceased and a tax return for the estate itself if it earned income during the administration period. It is wise to obtain a tax clearance from the Australian Taxation Office (ATO) before making a final distribution.
- Transfer assets: Once all debts and taxes are paid, you can begin the process of transferring assets to the beneficiaries as per the Will. This might involve transferring property titles with the relevant state/territory titling authority, dealing with banks, or selling assets and distributing the proceeds.
- Keep a record of everything: As an executor, you must keep clear and accurate financial records. This includes every transaction, from funeral costs to the final distribution of assets. Beneficiaries are entitled to an account of how the estate was administered.
Timeframes and Professional Advice
The administration of a deceased estate can take considerable time. A straightforward estate might take 6-12 months, but if there are disputes, complex assets, or challenges to the Will, the process can take longer.
The role of an executor is a position of great responsibility. You are legally and financially accountable for your actions. While it is possible to handle the process yourself, seeking professional advice is often the best way to ensure you fulfil your duties correctly, protect yourself from personal liability, and avoid potential disputes. A lawyer can guide you through the complexities of probate and estate administration, providing invaluable support during a difficult time.
If you or someone you know wants more information or needs help or advice, please call (02) 4588 5955 or email [email protected].