The role of an executor of a will is to give effect to the wishes of the deceased as they have stated in their will. An executor of a will also owes a duty of care to beneficiaries under the will, meaning they must always act in the best interests of the beneficiaries and not their own.
There are a number of specific tasks an executor must attend to when administering the estate.
What an executor of a will is required to do
Funeral & burial
The executor of a will has the final say when it comes to arrangements for the funeral and disposal of the deceased’s body. While consideration may be given to the feelings of family members the executor is not bound by their wishes.
An application must be made by the executor of a will for a grant of probate where the court certifies that the will produced is in fact the last validly made will of the deceased.
Identify and collect assets
The executor of a will must conduct searches to identify all assets of the deceased that form part of the estate including bank accounts, real estate, vehicles, personal property, life insurance policies, superannuation and other investments. Generally title to the deceased’s real and personal property automatically vests in the executor (in his or her capacity as Legal Personal Representative of the deceased) retrospectively from the date of death, when probate is granted.
The executor of a will must ensure that assets are not lost, wasted or unduly depreciated because of his or her own action or inaction. For example the executor must ensure that property is sold for fair market value, received funds are adequately invested until distribution, assets are insured against loss and necessary maintenance is carried out.
Before any distribution of the estate is made to beneficiaries, all of the deceased’s debts must be paid. All real and personal property of the estate is available to the executor for the payment of any duties, fees, tax and debts.
Establish and administer trusts
If the will creates testamentary trusts, the executor of a will must set aside the funds designated for such trusts. They may also be required to either transfer funds to a named trustee or set up trust accounts to hold the trust funds.
Maintain accounts and records
An executor’s duty to keep proper accounts requires them to: maintain a trust account separate from their own financial matters, ensure paperwork regarding receipts and payments and are available for inspection, and ensure information is available with respect to the value and status of assets and liabilities. In some circumstances, an executor will also be required to submit accounts to the court for audit. This includes cases where the executor is also guardian of a minor who is a beneficiary, where the executor is a creditor of the estate or where a substantial part of the estate passes to charity.
Distribute the estate
Executors are responsible for ensuring that the beneficiaries receive their inheritance in accordance with the will. This should be done within a reasonable time after all assets have been collected and debts have been paid. There is general rule that estates should be distributed within one year of the testator’s death where possible. Monetary gifts paid after one year from the date of death will attract interest.
What an executor of a will is not required to do
Contrary to common belief, an executor of a will is not required to:
- hold a formal reading of the will; or
- advise beneficiaries they are beneficiaries before gifts in will are given to them.
Rights of an executor of a will
An executor of a will also has certain rights at law which assist them in administering the estate.
Refusal to act
A person appointed as an executor of a will can refuse to accept the appointment by filing a ‘renunciation’ document with the Supreme Court.
The executor is entitled to reimbursement for any amounts they have paid on behalf of the estate, provided they were reasonably incurred.
Unless there is a specific clause granting commission in the will, an executor of a will is not entitled to a commission as of right. This may only be awarded by the court, upon application of the executor after they have filed and passed full accounts of the administration. Usually a court will only award commission where the executor was required to go above and beyond the normal course of duties for which he or she should be remunerated. The court will decide the amount of the commission. The court will generally not award additional commission where there is a gift to the executor in the will.
Alternatively, a commission may be paid to the executor as agreed between beneficiaries provided all are of sound mind and 18 years of age. In some states commissions are capped to a percentage of the estate value.
Rights when dealing with beneficiaries
The executor is under strict duty to carry out the directions of the will however he or she may exercise broad discretion as to how this is done. Provided the executor is acting in accordance with the will, they do not need to make decisions that all of the beneficiaries agree with. Provided the executor is not negligent or dishonest, beneficiaries cannot interfere with judgement calls or decisions made by the executor in the fulfilment of his or her responsibilities.
Obtain reasonable professional advice
An executor of a will may retain professional advice such as from a lawyer, accountant or real estate agent to assist with certain tasks in the administration, however only reasonable costs may be charged as disbursements to the estate. The reasonableness of a cost is determined having regard to the size and nature of the estate and the tasks that need to be carried out.
Seek the court’s direction
An executor of a will can apply for the court’s assistance in administering the will. The court can:
- give an opinion, advice or direction on any issue regarding management or administration of a trust;
- determine a question of law;
- interpret an ambiguous term in the will; or
- approve or ratify any sale, purchase, compromise or other transaction that has been carried out by the executor that has been called into question by beneficiaries.
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