What is an executor?
If you have been named as an executor in someone’s will, it means the deceased wanted you to arrange his/her funeral and to administer his or her estate. Administering the estate will involve identifying, collecting and protecting the assets of the deceased, paying all debts and taxes and distributing the estate to the beneficiaries named in the will.
Your appointment as executor may be the one and only time in your life that you are required to administer an estate. It is usual to engage a solicitor to assist you in the process as you may be personally liable for any mistakes that you make.
For this reason it is not unusual for solicitors to be appointed as executors as they are familiar with what has to be done. They are also familiar with the technical rules for example, as to which share of the estate bears the liability for payment of the deceased’s debts and taxes.
Do executors get paid?
Generally, an executor acts for free unless the will states otherwise. However, an executor may apply to the Supreme Court for commission regardless of what the will says. If the executor is also a beneficiary, then legal advice should be sought as to whether or not you may apply for commission.
An executor is entitled to be reimbursed from the estate for any out of pocket expenses. This includes solicitor’s fees and taxation advice.
Can you get out of being an executor?
Being an executor is a time consuming and thankless task. Executors are expected to personally carry out the deceased’s wishes. It is not unusual for conflict to arise with beneficiaries. An executor may renounce probate if they do not wish to take on the role of executor. A solicitor can help with the appropriate documentation.
Your first steps as executor
As executor, the first thing you’ll need to do is to thoroughly read and understand the will. Then you should make a list of everything the deceased owned as well as any payments or assets they were entitled to. This list is known as an inventory of property.
Common assets included in the inventory of property are:
- Other real estate
- Bank accounts
- Household appliances
- Shares and other investments
- Life insurance policies, if payable to the estate
- Superannuation, if payable to the estate
- Outstanding work entitlements.
You should ensure that the assets are insured and kept safe.
You will also need to identify all debts and locate the beneficiaries.
It is a good idea to collect or redirect the deceased’s mail. You will usually need to apply to the Supreme Court for a grant of probate.
What is probate?
Probate is a certificate from the Supreme Court notifying the world at large that the attached will is valid and enabling the executor to administer the estate. The document is proof of the executor’s authority to deal with assets of the deceased.
Why is probate necessary?
The deceased’s assets may be held by others, for example, a bank holding the deceased’s funds, a share registry holding the deceased’s shares, and the Land Titles Office regulating the ownership and transfer of the deceased’s real estate. These asset holders may require probate before releasing the assets or transferring them in accordance with the will. The grant of probate confirms that the person seeking release of assets has authority to deal with them and this protects the asset holders against possible liability for handing assets over to the wrong person. This assists with the orderly and lawful succession of estates.
Fees for probate
The Supreme Court charges a sliding scale of fees for lodging an application for probate. The larger the estate, the higher the fee. However, where an estate is valued at less than $100,000 the Court does not charge a fee.
Paying expenses and debts
Once the Supreme Court has granted probate the executor must pay the deceased’s testamentary expenses and debts before they can distribute what is left. Technical rules apply as to the order in which assets are to be applied in payment of these liabilities and legal advice should be sought.
An estate bank account should be opened for collection of the deceased’s moneys as these funds should be kept separate from the executor’s personal assets.
Preparing a distribution report
Once an executor has sold the deceased’s assets and paid all of the debts a plan of distribution should be prepared showing all moneys received, all payments made and how the balance is to be distributed. This should be provided to the residuary beneficiaries. Some of the assets may be transferred to beneficiaries in appropriate circumstances.
Distributing the assets
It is usual to publish a notice calling for claims against the estate to be lodged with you. All claims must be finalised or provided for before distributing the estate.
It is usual to obtain a receipt from the beneficiaries to acknowledge that they have received their proper entitlement under the will.
How your solicitor can help you
Your solicitor can guide you through every stage of your journey as executor, including:
- Informing you of your rights and responsibilities.
- Helping you apply for Probate and complete the Probate forms.
- Helping you identify and collect the deceased’s assets.
- Advising you on any potential tax implications.
- Advising you on the right order to pay debts and distribute assets.
- Assisting you to resolve any claims against the estate.
- Helping you draw up a statement of assets and distribution report