What are my responsibilities as an executor?
Soon after the funeral, an executor of a deceased person’s estate should promptly turn their attention to carrying out the terms of the Will. There are essentially two aspects to this; the first is to ascertain whether probate is required and, secondly, to administer the estate.
It will be necessary to identify what assets and liabilities the deceased person left behind. Depending on the value of the assets, probate of the Will may need to be obtained. Generally, where there is land or other substantial assets probate will be required in order to deal with those assets; for example. to sell or transfer them.
Probate is the process whereby the last Will of the deceased is ‘proven’ as a legally made Will and the formal recognition of the executor(s) named in the Will. It involves the lodgement of various documents with the Probate Registry together with a filing fee, which at present is $1,088. The documents include a draft Grant of Probate, an Executor’s Oath and an Affidavit of Assets and Liabilities. It may also require the lodgement of other documents where, for example, the Will has not been signed in accordance with legal requirements or where names have been spelt incorrectly.
An executor is required to disclose all assets and liabilities of the deceased person which existed at the date of his or her death. The values of those assets and liabilities as at the date of death also need to be disclosed. However, only those assets and liabilities held by the deceased in his or her sole name need be disclosed. Thus, any assets which the deceased held jointly with another cannot be disclosed as those assets are not deemed to form part of the estate. Where the deceased was the owner of a private company, only their shares and the value of those shares need to be disclosed.
The documentation and information you will need:
- The original Will
- The death certificate
- The original land title (where the deceased owned real estate in his/her own name)
- A recent bank account statement for all accounts held by the deceased in his/her sole name
- Where the deceased held shares in his/her sole name, copies of any share certificates or dividend statements
- If relevant, a statement from the nursing home or retirement village stating the amount (if any) payable to the estate and their requirements to make the payment
- Details of any motor vehicles
- An estimate of the market value of all household contents and jewellery
- The ‘capital value’ of any real estate. This can be obtained from a recent council rates notice or SA Water bill
- If relevant, the deceased’s tax file number and most recent income tax return and Notice of Assessment from the ATO
- A copy of the funeral account and receipt
- Details of any debts or liabilities, eg. credit cards, loans etc.
- Details of any superannuation death benefits and/or life insurance policies
- Details of any investments in the deceased’s sole name
- Valuations of any stamp or coin collections, antiques or any other items of intrinsic value
- Copies of all recent utilities bills in his/her sole name
It will usually be necessary to notify various (non-family) parties of the death, including banks, insurance companies, superannuation trustees, utilities companies, the Australian Electoral Commission, the Australian Taxation Office, Centrelink, Medicare and any creditors. Where there are no funds in the estate to meet payment of debts, it may be necessary to seek an extension of time from the relevant creditors to pay the debt.
Once probate of the Will is obtained, or where probate is not required, it will then be a case of administering the estate in accordance with the deceased’s wishes as expressed in his or her Will.
Often, this will involve either the sale or transfer of real estate and other property, the payment of any debts, the closure of bank accounts and redemption of funds and, where necessary, the lodgement of a date of death and/or estate tax return. Once those matters have been attended to, then the estate can be distributed to the beneficiaries in accordance with the Will.
This will generally be done via a payment of money but can also take the form of a transfer of assets in satisfaction of a beneficiary’s share if the Will allows this. It is paramount in all cases that all debts and liabilities of the estate be identified and paid out first, before any distribution is made to the beneficiaries.
Dispelling some myths about Wills and estates:
- There is no formal requirement for an executor to do a “reading of the Will” although it is often a good idea to provide a copy of the Will to all beneficiaries or at least inform them of the fact that they are named as a beneficiary in the Will;
- There is no prescribed time period in which probate must be applied for and obtained, nor for finalising the administration of an estate. Generally however, an executor is expected by the beneficiaries to carry out his or her role as an executor with due diligence and within a reasonable time. Any protracted delays in obtaining probate may result in the beneficiaries taking legal action to compel the executor to apply for probate or to deposit the Will with the Probate Registry so that another person who is legally entitled may apply in his or her place.
- An executor is not personally liable for payment of debts of the estate from his or her personal funds. If an executor chooses to do this then he/she is entitled to be reimbursed from the estate before any distribution is made to the beneficiaries. Note however that an executor may be held personally liable in other instances, eg. where he or she has misappropriated or grossly mishandled funds or assets of the estate or has made a distribution within 6 months of probate being granted whilst on notice of a claim against the estate.
More often than not, a person is called upon to act as an executor once in their lifetime. It is a role with a high degree of responsibility attached to it. It is usually an unfamiliar role undertaken for no remuneration or reward in return.
If you are the executor of a deceased estate, we recommend consulting a solicitor. Our Wills and Estates team at Andersons Solicitors can give you the help you need. Give us a call for an appointment or just to talk to someone over the phone initially.