What Advice does an Executor Need?

By 31 January 2019Future Planning
advice to an executor

An executor is the person responsible for administering a will.

The role of an executor involves:

  • identifying and collecting the assets of the deceased;
  • paying any debts; and
  • distributing the estate in accordance with the terms of the will (or the rules of intestacy if there is no will or the will does not deal with all assets).

Being an executor can be a time-consuming task and one that carries with it personal risk.  In order to avoid or minimise problems that can arise during the administration of an estate, it is worthwhile getting legal advice at the outset. Executors are entitled to obtain legal advice to assist in the carrying out of their role.  Those legal costs are payable from estate funds.

Whilst an executor can do some tasks personally to minimise the expense to the estate, there are other tasks which are more difficult and may require legal assistance or advice.

These matters include:

  • The first thing an executor should do is consider whether he or she is prepared to take on the responsibility of the role. Just because a person has been appointed as an executor under a will, it doesn’t mean that he or she has to accept the appointment.  It is possible for an executor to formally renounce the executorship.  For example, a will maker may appoint his or her 3 children to act jointly as executors and to also benefit equally in the estate.  One child may decide that he or she doesn’t have the time to devote to the decision making and signing of paperwork required and may choose to renounce and leave the executorship to his or her siblings, while still receiving his or her benefit in the estate.
  • Advising on important timeframes and appropriate steps to take to protect the executor and beneficiaries from potential claims.
  • Interpretation of the will.
  • Applying for a Grant of Probate or Letters of Administration (with or without a will). Legal advice may be of benefit in deciding whether or not to obtain a Grant and once that decision has been made, undertaking the legal process to obtain it.
  • Advertising a notice to creditors to provide protection to the executor from claims by any creditor, beneficiary or other person in respect of the estate.
  • Preparing, stamping and lodging property transfer forms.
  • Advising about the steps needed to collect particular assets. This may also involve a consideration as to whether an asset is to be sold or transferred directly to a beneficiary.  Financial and taxation advice can help to achieve the best outcome for beneficiaries, depending on their particular situation.
  • Advising about the payment of debts. For example, certain assets may carry with them a debt (such as a mortgage).  There are also rules about the order in which assets should be used to pay debts.
  • Arranging for an accountant to advise on the need to lodge income tax returns for the deceased and the estate and prepare those returns if necessary.
  • Considering whether a beneficiary may prefer to receive a particular asset as his or her share of the estate. The legal term for this is an appropriation.  An example of this would be where two siblings share equally in an estate.  Rather than receive an equal share in every asset, it is possible for one beneficiary to take a particular asset, such as a property, entirely (and tax effectively), as long as the overall distribution is equal.
  • Before making any distributions, advising what to do if a beneficiary cannot be located, is deceased, wishes to disclaim his or her gift or is bankrupt.
  • If a beneficiary is living overseas and is a non-resident for tax purposes, obtaining legal and taxation advice about how best to distribute the assets of the estate amongst resident and non-resident beneficiaries and how best to structure a gift to the non-resident beneficiary can minimise any tax which may be payable by the deceased or the estate and/or can reduce the impact of any tax payable on the resident beneficiaries.
  • Advising about the right to claim an executor’s commission for the ‘pains and troubles’ of acting as an executor, including the likely quantum and best process to adopt.
  • Considering whether an executor should obtain an appropriate release and discharge from the beneficiaries so that he or she can be satisfied that his or her role has been completed.

If you wish to get a better understanding of the role and responsibilities of an executor or would like some guidance throughout the estate administration process, please contact our Lawyers Toowoomba.

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