The role of an executor

An executor is responsible for ensuring someone’s final wishes are carried out.

Being an executor often means having to make some tough decisions. It helps to have some experience in finance, business or law.

 

What does an executor do?

An executor’s role begins as soon as the deceased has passed. They need to obtain the death certificate, apply for probate, locate the original will, advise family and friends, arrange and pay for the funeral, and follow up any special instructions from the deceased.

It can be challenging and complicated

Be patient, organised and methodical. While each will has its own specific challenges, it helps if you have some understanding of estate law and finance. Even with a straightforward estate, this can be a very challenging time.

What if no will can be found?

This means the deceased is intestate. In these cases, the estate is distributed in accordance with the laws of intestacy. These laws dictate a particular order of payment to the family members of the deceased.

An executor must notify the beneficiaries of the will

All beneficiaries must be located and contacted (including those who are overseas).

Debts and liabilities must be dealt with

Debts must be paid, or passed on. If you are an executor, you’ll need to establish a complete picture of the deceased’s finances. This includes identifying any debtors and creditors. Funeral expenses, income tax, fees for administering the estate and out-of-pocket expenses must also be paid.

An executor is responsible for everyday tasks

An executor must arrange for pets to be cared for, redirect mail, cancel services and pay any outstanding bills.

They have to insure the estate

An executor is responsible for all the assets until they have been passed on. An executor must identify the estate assets, including any that are interstate or overseas. This includes homes, cars, superannuation, jewellery, investments and home contents. These must all be valued, secured and insured.

They must attend to any businesses

An executor must deal with any business the deceased had an interest in. This may include determining if the business operates as a Sole Trader, Partnership or Company. The executor may be required to carry on the running of the business or wind up the business, sell real estate and other assets, organise tax issues and invest funds in a prudent manner.

There can be legal risks

An executor must lodge the tax return

If you are an executor, you need to obtain clearance from the Australian Taxation Office before the estate can be distributed. Otherwise you run the risk of being personally liable for any outstanding tax. You’ll need to gather details of all income earnt by the deceased in the years prior to their death and during the time since their death. You then must prepare a date of death tax return – and maybe prior returns for the deceased if they have not lodged for some time – and an estate tax return.

You may need to sell the assets

It depends on the will and the estate. An executor is responsible for selling or transferring assets to the beneficiaries. This includes houses, land, shares and investments. If the assets are sold, you’ll need to take into account any costs of sale and any capital gains tax.

What happens when all debts have been paid?

You can distribute the remaining assets according to the will. You will need to account for funeral expenses, debts and the management of any claims. And you’ll need to prepare a statement for all beneficiaries detailing all transactions.

Who is responsible for trusts?

An executor is usually the trustee for trusts set up in the will. This can include trusts set up for beneficiaries under 18 years of age. These trusts need ongoing administration, often over many years.

You can authorise someone else to act as executor

A lot can happen between agreeing to be an executor and becoming one.

If you wish, you can pass on the role to someone else. It can be a person, or a trustee organisation.

If you choose State Trustees to act as executor on your behalf, we can manage the estate for you. Our expert consultants have the experience and expertise to ensure everything is handled professionally, independently and impartially.