An executor is a person appointed by another in a Will to deal with the estate of the Will maker (known as the Testator) upon his or her death.
An executor is the legal personal representative of a deceased person. The executor “stands in the shoes” of the deceased, and is responsible for carrying out the terms of the Will. When a person dies without a Will, then usually one of the next of kin entitled to the estate is appointed as the legal personal representative. In this case, they are known as the administrator rather than the executor, although the administrator carries out a similar role to an executor.
Some Important Terminology
- The Will appoints an executor. This is the person who represents the deceased person after death and who does everything necessary to carry out the instructions set out in the Will including collection and distribution of assets.
- The person or persons who receive gifts under the Will are referred to as beneficiaries.
- In some but not all cases, the executor must obtain probate of the Will by making application to the Supreme Court. A grant of probate gives the executor authority to act. After obtaining probate an executor will be recognized at law as the person who has the right to deal with the assets of the deceased after death.
- A codicil is a written alteration or addition to the terms of a Will made some time after the Will was originally signed, and read together with the initial Will.
- A death certificate is a certificate issued by the Registry of Births Deaths and Marriages certifying the death and setting out certain information about the deceased person and the circumstances of their death.
- An affidavit is a written statement sworn to be true, signed before a qualified witness, which includes a Solicitor or Justice of the Peace.
What does the executor have to do?
In the course of administering an estate, an executor will usually have to:
- Apply for probate, if required. As part of this process the executor is required to execute an affidavit setting out certain information about the deceased, the assets and liabilities of the estate and the beneficiaries of the estate.
- Determine what debts and liabilities have to be paid.
- Lodge taxation returns for the deceased and for the estate
- Assemble the assets and sell any assets that are required to be sold.
- Work out the order in which assets have to be used to pay debts. In some cases this will be set out in the Will, otherwise there are laws which tell you which assets to use first.
- Pay debts.
- To ensure protection from personal liability, publish a notice that the executor intends to distribute the assets to the beneficiaries after a certain period of time, and call on any creditors or claimants to give notification of their claims before that time.
- If there are any claims made upon the estate, the executor is the person responsible for either defending or resolving those claims. This must be done before the estate is distributed.
- Distribute the assets to the beneficiaries.
In some cases the executor will be involved in making funeral arrangements. The executor will be responsible for ensuring that the reasonable funeral and burial/cremation expenses are paid from the estate, or otherwise ensuring that those who paid the expenses are reimbursed.
Should you accept the appointment as Executor?
The appointment of an executor is only effective following the death of the testator. Once he or she has died then if you are appointed by the Will as executor you should decide very quickly (and before you take steps to deal with the assets and liabilities of the estate) whether or not you wish to accept the position. You are under no legal obligation to do so. If you don’t want to act as the executor you will need to “renounce probate”. The testator may have discussed the appointment with you but frequently the executor is unaware of the appointment until after the death.
What is Probate?
When a person has been appointed as an executor under a Will they will usually need to obtain “probate” of the will by making application to the Supreme Court.
A “Grant of Probate” simply means the formal approval of the last Will by the Supreme Court. The formal approval allows an executor to collect the assets and pay the debts of a deceased person and then to distribute the estate as that person directed in his or her Will.
Do I need Probate?
Not necessarily. You will always need probate if the deceased owned real estate in his/her sole name or as tenants in common with someone else. If the deceased owned real estate with someone else as a joint tenant, the surviving owner will not need probate to have the property transferred to him/her.
If there is no real estate in the deceased’s name, probate may not be essential, but it depends on the nature and value of the assets. Probate may need to be obtained to deal with other assets, such as money in bank accounts, shares or money from a life insurance policy. Your lawyer will write to the bank, company or other institution who will advise whether they require probate before they will transfer the property into the executor’s name.
What are Letters of Administration?
Where a deceased person does not have an executor, it may still be necessary for someone to apply to the Court for a grant before the estate can be dealt with. In this case the grant is not called Probate, but rather Letters of Administration.
There are a number of reasons the deceased may not have an executor. Perhaps they never made a Will. On the other hand, they might have made a Will, but for some reason the appointment of executor did not take effect (maybe the executor predeceased or made the decision to renounce their role). In these cases, usually one of the beneficiaries of the estate applies to act as the Administrator of the estate.
Information contained above relates to NSW law, however legislation is very similar in all of the Australian States. This advice is of a general nature and is not intended to address the circumstances of any particular individual or entity. Advice from a lawyer should always be sought in relation to the interpretation of a Will, or if you wish to contest a Will.
Contact our experienced Estate Planning Team (on telephone 02 4929 3995) if you wish to discuss any of the information contained here, or to discuss your Will and other Estate Planning documents.