Your role as Executor

The role of executor is an important one. By being named as the executor the deceased has put his or her trust in you to carry out a number of tasks which you have ultimate control.

The Court has held that broadly speaking the duties of the executor are as follows:

1. Funeral Arrangements.

It is the duty of the executor to bury or cremate the deceased as soon as is practicable following their death. Quite often the family of the deceased would like to have input into the funeral arrangements and where possible the executor should consult with the family to ensure that the deceased is laid to rest in a dignified manner and with respect to any religious beliefs.

The executor should also have regard to any wishes of the deceased as set out in the Will, although in NSW the deceased cannot dictate what is to happen to their body, as ultimately this is a responsibility of the executor. The one exception to the above rule is that an executor must not cremate the deceased if a written direction has been made (including within the Will) that their body is not to be cremated or that it was to be disposed of by some other means.

The reasonable costs and expenses of the funeral are to be paid from the estate monies.

2. Obtain Probate.

It is the duty of the executor to obtain Probate of the last Will and Testament of the deceased (what is Probate? Find out here.).

The application for Probate must be made within 6 months of the date of death of the deceased. If more than 6 months has elapsed the Court will require evidence in the form of an affidavit explaining the delay. Probate Sydney ensures that any delay is explained within the executor’s affidavit filed in support of the Probate application to the Court.

3. Call in the Estate.

Section 44 of the Probate and Administration Act provides that upon the Grant of Probate all assets of the deceased (both real estate and personal property) vest in the executor.

While section 44 provides the executor with legal authority to deal with those assets in practice the executor will need to provide a copy of Probate, Death Certificate and various other forms as required by the asset holder in order to register the transfer of the asset from the name of the deceased to the name of the executor (for instance, for land and real estate the Department of Lands require a Transmission Document to be lodged. Most financial institutions will also require account closure forms to be executed and Share Registries require Transfer of Share paperwork to be provided).

Along with calling in any assets held in the name of the deceased it is also the responsibility of the executor to prosecute any claims the executor may have against third parties, provided that the entitlement to pursue such did not cease upon the testator’s (the deceased) death (for instance the deceased may have loaned money to individuals which ought to be collected by the executor in accordance with the terms of the loan agreement. Probate Sydney are able to advise you on the types of claims which survive death (both against and in favour of the estate) and the claims which do not).

Joint assets, Superannuation and Life Insurance.

Assets held by the deceased jointly with another person do not form part of the estate and cannot be called in by the executor, as at law, the deceased ceases to hold an interest in those assets as at the date of their death, with the surviving joint tenant taking all of the deceased's interest. Despite joint assets not forming part of the estate the executor should declare any assets held jointly by the deceased as at the date of death in a separate schedule at the time of lodging the application for Probate.

Superannuation is another species of property that generally does not form part of the estate as it is instead a contract between the deceased and superannuation trustee to pay a particular beneficiary, or class of beneficiaries upon the happening of a certain event, namely death. The superannuation benefit may form part of the estate where the superannuation trust deed provides for such, or where the superannuation trustee has paid the benefit to the estate in the exercise of the trustee's discretion.

4. Preserve the Estate from Waste.

An executor must ensure that the assets of the estate are not wasted due to any action or inaction of the executor. By failing to act promptly in the administration of the estate, or by failing to take proper advice, the executor may be held personally liable by a beneficiary or creditor if the action or inaction has lead to the reduction of the estate assets.

It is for this reason that the executor must ensure that proper accounts (receipts) are kept and that any assets sold or invested are done so in accordance with the terms of the Will or by law and in accordance with suitable advice (for instance an executor selling real estate must ensure that the estate is not wasted by selling the property in a manner which may lead to a sale price that cannot be regarded as fair market value (such as in a fire sale without a proper marketing campaign).

Running a business.

While generally an executor can ensure that the estate is not wasted by acting promptly and by seeking professional advice (such as from Probate Sydney to obtain the Grant of Probate, an accountant to prepare and lodge tax returns and from a real estate agent when selling land), difficulties can arise where the deceased was a business owner.

Often a business will be one of the largest assets of the estate. If the deceased played major part in the success and running of the business, death will invariably lead to a negative impact on the day to day activities of that business and ultimately the profitability and value of the business itself.

Unless the deceased left an express or implied authority for the executor to carry on the business within the Will the executor has no power to carry on the business (as opposed to closing the business to realise the assets) and any act of the executor, such as signing contracts, purchasing goods etc, will be done without authority leaving the executor exposed to being held personally liable and unable to be indemnified from the assets of the estate.

To avoid this situation an executor should seek an order of the Court to allow for the carrying on of the business and such order will protect the executor from being held personally liable. Probate Sydney is able to obtain orders of the Court of this nature along with quick limited Grants of Probate to ensure assets are not wasted.

5. Pay Debts.

Once the estate assets have been called in it is the duty of the executor to pay the debts of the estate. The executor will be aware of these debts from the enquiries and searches conducted prior to filing the application for Probate and also from the notice of intended application published in the newspaper by Probate Sydney.

The manner and order of the payment of the debts will depend on whether the estate is solvent (where there are enough assets to pay all liabilities) or insolvent (where there are insufficient assets to pay liabilities).

Regardless of whether the estate is solvent or insolvent the funeral, testamentary and administration expenses of the estate (such as the fees charged by Probate Sydney to obtain Probate) are paid in priority of any other debts.

It is the executor’s role to ensure that the debts of the estate are paid using the correct assets of the estate. In the first instance (unless otherwise provided for in the Will) the executor should use assets which are undisposed of by the Will to pay debts, although care should be taken to ensure that there are sufficient funds to pay any pecuniary legacy (a gift comprised of money only).

Example: John dies leaving a Will appointing Emmanuel as the executor. John bequeaths his house, car and ‘all the rest of his estate’ to his wife Jenny apart for an amount of $20,000.00 which he gives to his brother Eric. On his death John’s only debt is a credit card of $5,000.00 and apart from the house and car also has shares in the amount of $50,000.00. Emmanuel must use the proceeds of the shares to pay for the debts of the estate (including the funeral costs) as the house and car have been disposed of by the Will and there are sufficient funds from the sale of the shares to pay the debts and pecuniary legacy (the $20,000.00 gift to Eric).

Probate Sydney should be consulted if you are unsure of which assets should be used to pay the debts of the estate.

6. Distribute Estate as directed by the Will or by Law.

Once the estate assets have been called in and debts paid, the final duty of the executor is to distribute the estate as directed by the Will, or where the Will does not dispose of assets, in accordance with the rules of intestacy (see ‘Who is entitled to the assets of the deceased if there is no Will?’). In most instances Wills drafted by solicitors will include a ‘catch all’ provision to ensure that all assets pass to a named individual, although this provision will have little effect if the named individual has predeceased the testator (the deceased).

Generally the executor must administer the estate, by finally paying all beneficiaries within 12 months from the date of death of the testator (the deceased). Unless a contrary direction exists in the Will beneficiaries (apart from some beneficiaries claiming under the rules of intestacy) have no right to claim interest from the executor provided that the estate is administered within this ‘executor’s year’.

To get started with the application for Probate, or if you have any questions, simply complete your details by clicking here, or contact us on 1300 4 PROBATE (1300 477 622).