Acting as an Executor, what you need to know - Part One - Solari & Stock-Where clients come first

Acting as an Executor, what you need to know – Part One

Acting as an Executor, what you need to know – Part One

Acting as an executor what you need to know

If you have been appointed as Executor in someone’s Will, or if you are considering who to appoint as Executor in your own Will, it is important to understand what the role of Executor entails.

In short, the Executor is responsible for applying for a Grant of Probate (if required) and subsequently, administering the Estate. The administration of the Estate means dealing with the assets, paying any liabilities, transferring them or selling them, and making distributions in accordance with the Will. It may also mean dealing with ATO and other government bodies depending on the type of assets held.

The first thing you will do as Executor after someone has died, is organising the funeral. Now, whilst the Executor has the legal right to dispose of a body, we would suggest that if you are not the immediate family, that consideration should be given to them when making these plans. It is often the case that a Will contains funeral wishes, but that a funeral takes place prior to any opening of a Will so funeral wishes are just a wish. Once the official death certificate has issued, you can seek legal advice in relation to what to do next.

Probate application

The process of applying for Probate is to prove the Will in the Supreme Court. Probate is an order from the Supreme Court which confirms the Will is valid and gives the Executor power to collect in and dispose of assets. Before probate is granted, the power to collect in and dispose of assets lies with the NSW Trustee & Guardian. You need to compile several documents to be able to have your application approved by the Court. This process is much more than the Court merely ‘rubber stamping’ the Will. The Court will carefully assess the documents. The Court may issue requisitions (meaning questions), which can be complicated and difficult to answer. For example, if there is a typographical error with the Will, or the Will is unclear or contradicts itself, the Court may ask questions to help clarify it.

Ascertaining the assets

The Executor has the responsibility to ascertain and locate the assets and liabilities of the deceased. If someone dies suddenly, or was a very private person during their life, this can be difficult. If you know that someone has appointed you as Executor in their Will, it is useful to have a discussion with them as to what assets and liabilities they have, and how they are owned (i.e. through their superannuation, in a company or trust, or jointly with others). You can ask them to keep a folder with relevant information regarding their assets, for example superannuation and bank statements. If you are a close family member this may go without saying, but if you are a friend, or not in regular contact, it may be worth starting a conversation every so often so that you stay in the loop.

Ongoing responsibilities

If there are no arguments between the beneficiaries and the estate, once Probate is granted, the assets are distributed, liabilities settled and any tax dealt with, your job as Executor is done. However, in some circumstances there can be ongoing obligations which we’ll discuss below.

Litigation

There can be circumstances where the Estate is sued, for example by someone who was not included in the Will and thinks they should have been, or if there is a problem with either the Will or one of the assets. As Executor, you will be acting for the Estate, and you must remain neutral between the parties. Generally, your legal fees are payable by the Estate assets. However, if the Estate has been (mostly) distributed, it can be difficult to retrieve funds, and you might end up out of pocket, which is why there are certain time limits you should follow to ensure you are protected When taking on the role of Executor, it is important to know what the family dynamics of the Will maker are like, and whether or not any claims are likely.

For more information see part 2 of this article coming soon.

If you have questions about appointing or acting as an executor, speak with one of our Estate Planning Team, call on 8525 2700, or click here to request an appointment.

Our Estate Planning Team includes Rebecca ExleyMichael SolariNicole Commandeur and Valentina Abouzeid.

Article by NIcole Commandeur
Image created in Canva

Tags:
, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,