Being an executor can be time-consuming and emotionally demanding. You may be personally liable for the decisions you make. So agreeing to be executor is a decision which should not be taken lightly.
The paperwork involved in estate administration is increasing every day. Prior estate planning involving the relevant family members can minimise the negative impacts on a family. Many families are shocked to discover that the death of a loved one can trigger so much bitterness. Estate planning can identify areas of dispute and often help resolve them during the lifetime of the willmaker.
Estate planning involves more than just a well drafted will, although this is an essential component. Analysing the assets and liabilities and discussing gifting of personal effect (high sentimental value but generally of no commercial value) and implementing these plans can minimise the financial and emotional costs of managing an estate.
Executors are charged with identifying estate assets and liabilities, discharging the liabilities and then distributing the assets in accordance with the will. Some estate assets can decrease in value if not dealt with swiftly or if the estate has insufficient funds to maintain them. Sometimes this means making hard decisions and offending other family members. Whilst fair and open communication between the family members will minimise costs, it is imperative to obtain both financial and legal advice early on to ensure that executors are aware of the risks and obligations involved and some of the options available to them.
Have you been appointed executor?
It is your role as executor to locate the original Will, advise family and friends, then assist and pay for the funeral, and follow up the special wishes/ instructions from the deceased.
You must establish a complete picture of the deceased’s finances, including identifying any debtors and creditors. Funeral expenses, income tax, fees for administering the estate and out-of-pocket expenses must also be paid.
It is also your duty to carry out everyday tasks such as arranging for pets to be cared for, redirect mail, cancel services and pay any outstanding bills.
The executor must identify the estate assets including any interstate or overseas and have them valued, secured and insured. This would include such things as a home, car, superannuation, jewellery, investments and home contents
As an executor you are potentially responsible should something happen to the assets of the estate. It is important for the executor to ensure that all assets including property, collectibles and investments are safe and to arrange insurance protection if needed.
Before an estate can be distributed, it is necessary to obtain a clearance from the Australian Taxation Office. It is your duty as executor to obtain this clearance. It requires both a date of death and an estate tax return. The executor will have to give details of all income earned during the current financial year and past years.
There are many legal issues that arise when administering an estate. The executor is responsible for resolving estate issues, liabilities and disputes. This may consist of challenges to the Will including, entitlement issues and beneficiary disputes.
Wright Clarke Solicitors handle many estate matters and liaise closely with financial advisors to ensure practical efficient and costs effective advice is given to families involved in estate administration and planning.
Have you seen the other posts in our Estate Planning series?
When to review your Will
How do I make changes to my Will