Considerations for executors
3 Apr 2017
Looking to choose an executor?
One of your most important decisions to make when writing or updating your will is to work out who should be your executor. Most people when asked will accept the role of executor without completely understanding what it is they are required to do. Sometimes an executor only finds out about their role upon the passing of the will maker. Being an executor comes at a difficult time and it can be daunting, especially for people new to the role.
Understanding the role of an executor
An executor is responsible for managing your assets after you die and distributing them according to your wishes. It is often a time-consuming and demanding role. It can also be emotionally draining, especially if they were close to you.
An executor is a person (or organisation) appointed in a Will to be responsible for carrying out the wishes of someone after they pass away. Some of the responsibilities role of an executor are to obtain the death certificate, locate the original Will, advise family and friends, arrange and pay for the funeral, apply for a grant of probate and act on any special instructions from the deceased.
Unless an executor is sufficiently skilled or properly advised there is a real chance they could be out of pocket at the end of the process of administering a deceased estate.
An executor is responsible for all the assets of a deceased estate. An executor must identify the estate assets including any that are interstate or overseas. This includes homes, cars, superannuation, jewellery, investments and home contents etc.
Who makes a good executor?
Your executor is legally-responsible for following the instructions in your will and has to ensure your estate is protected and managed effectively until your assets are distributed to beneficiaries. Many people name someone in their family, for example, siblings and adult children as an executor. Make sure you ask them if they are willing to take on the role, so they are aware of their responsibilities when the time comes. Although this is often seen as an honour, it can be an onerous and stressful task, especially if there is potential for a family dispute.
You can name more than one person or a professional trustees company to be an executor, which can be useful as they might want to divide the tasks between them when managing your estate. It will be helpful if your executors are organised, good at handling paperwork and able to manage legal issues.
Above all choose a person or organisation you trust to be your executor(s). They are going to be acting on your behalf when the time comes, so you need to be assured the executor(s) you choose have the skills and expertise to focus on getting the best outcome for your beneficiaries.
Tasks of an executor
Simply put, your executor makes sure your estate is dealt with according to your wishes. This can be quite complicated, even with the most straightforward estates. Your executor will need to:
- Identify all your assets and liabilities
- Apply for probate
- Prepare tax returns for you and your estate
- Defend your estate from any legal claims
- Mediate and resolve any disputes between beneficiaries
- Distribute the proceeds of your estate.
For example, when dealing with property assets, an executor should consider who has access to that property, if the property is insured, whether the policy is up to date and whether terms and conditions of the policy are being met.
Where motor vehicles are concerned, an executor should determine who has the keys, who drives the vehicle, the status of the vehicle’s insurance policy and, consider who’s responsible for costs if there’s an accident.
Reaching out to beneficiaries
An executor acts as a legally appointed representative to protect the assets of a deceased estate until they can be passed on to beneficiaries. This includes those beneficiaries who might reside interstate or overseas. Executors work to mandatory waiting periods for deceased estate administration tasks such as obtaining a Grant of Probate and conveyancing. It is good practice for executors to communicate regularly with beneficiaries to ensure there aren’t any misunderstandings or conflict about the process of deceased estate administration.
Reducing the risk of claims
One thing that can be overlooked is the risk of claims against the estate. Once an executor obtains a Grant of Probate Victorian law provides for a six month period in which someone may make a claim on the estate. This is sometimes referred to as the ‘Testator Family Maintenance’ (TFM) period. A TFM claim is a claim against an estate for money by a member of the testators’ family who believes they were entitled to more from the will than they receive. Claims don’t happen on every estate but, mishandling one can cost the estate.
Claims requesting for a share of funds or a greater share of funds are sometimes made by estranged family members and ex-partners of the deceased. If an executor was to pay out the funds in an estate before the TFM period expires and a claim later arose that was valid, an executor may end up paying for the legal bills and any settlement amount out of their own pocket.
Being an executor often means having to make some tough decisions. It helps to have some experience in finance, business or law which can assist to resolve estate issues, liabilities and disputes.
Executor Assist is a tailored service offering from State Trustees for executors who wish to retain their role but require expert guidance with obtaining a grant of probate and other specific deceased administration tasks.
For executors who do not wish to remain in the role we can take on full legal liability and responsibility for administering a deceased estate, whether or not the person had made a Will before they died.
State Trustees administers more deceased estates than anyone else in Victoria. To find out more about our Executor Services call us today on 03 9667 6444 or 1300 138 672 (outside Melbourne) for a confidential, obligation-free discussion.
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