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What You Need To Know About Becoming An Executor
If you’ve been appointed executor of someone’s will, being the legal representative responsible for administering the estate comes with some responsibilities.
Your main job includes making sure all debts are paid, all assets are accounted for, and all beneficiaries receive their inheritance.
What else does an executor do?
If someone names you their executor, your role is to look after their estate and their final wishes.
If you’ve never done it before, it can seem confusing and, depending on the estate, it can be complicated.
An executor’s duties include:
locating the will
applying for a grant of probate
advising all beneficiaries about the contents of the will
collecting any assets and transferring them to the beneficiaries
making sure assets listed in the will are protected
keeping proper records of every action outlined in the will
ensuring outstanding debts are paid
adhering to the will’s instructions and distributing the assets, as directed
lodging final tax returns.
1. Finding the current will
Start by asking close friends and family, and the deceased person’s lawyer or accountant if they are known to you. The will must be original, signed and current.
The public trustee office in the relevant state or territory may have the will registered, or you can search for it via the Lost Will Register.
2. Contact relevant government agencies and financial institutions
You'll need to contact Medicare, the Australian Taxation Office, Centrelink, as well as any other financial institutions, insurance companies, utility providers and other services. Ask them what official steps you need to take to inform them of the person’s death and close off any accounts. You can also check state-based land titles offices to see if your loved one owned any property you're not aware of.
3. Prepare an inventory
List all household furniture and personal effects. It’s important to take stock and decide what to do with belongings that are not listed in the will. You may wish to invite the will beneficiaries to sort through specific items and, if there are items left over, you may wish to donate them to op shops or charities.
4. Protect all assets
Consider storing valuable items while the estate is being settled. All significant property (cars, antiques, jewellery or artwork) should be insured – as the executor, the security of these assets is your responsibility.
5. Get probate
Probate is the legal process every deceased estate goes through before being distributed to beneficiaries. The steps to obtaining probate differ slightly across Australia. This is where you will need to engage a specialist probate lawyer.
Until probate is granted, you are not legally allowed to take any action related to administering the estate.
6. Sell, finalise or transfer assets
All bank accounts in the deceased person's name must be closed, and shares, property and any significant collectables that are not being distributed to beneficiaries must be sold. The proceeds then form part of the monetary value of the estate.
It is your job to sell or transfer real estate assets. Beneficiaries must be provided with information about relevant capital gains tax, related to assets that have been sold or transferred.
7. Pay debts
You must make sure any of the deceased person's debts, liabilities and outstanding taxes are paid before any assets can be distributed to any will beneficiaries.
8. Pay outstanding tax
All tax-related issues must be finalised – including the deceased person’s personal income tax return. The deceased estate is a unique tax entity that needs its own tax file number (TFN). Trust tax returns will need to be prepared and lodged, if relevant.
9. Distribute assets
Once all debts have been paid from the estate, the remaining assets must be distributed according to the instructions in the will.
This checklist will help ensure everything has been done correctly prior to the distribution stage:
the grant of probate has been received
the estate's assets have been gathered and documented
you have sold any assets, shares or property as directed by the will – or as needed to meet the will’s specific requirements
all debts and liabilities are paid in full
plus, where required
you’ve lodged the final tax return
you’ve received the Australian Taxation Office's assessment
you’ve paid the tax bill (if applicable).
The next steps can only be taken once you've satisfied these requirements.
If specific sums of money need to be distributed to particular beneficiaries, these need to be paid first.
Next? Dealing with specific bequests of any personal effects, as well as transferring cash or assets to the named beneficiaries.
Dealing with will disputes
Sometimes, family tension can run high and having someone dispute the will is not out of the question – especially when family structures are complex (think divorce, stepchildren and other issues). Specific people are legally entitled to contest a will.
Distributions of the estate have to stop until any disputes are resolved.
The bottom line
Being an executor is a serious business with legal responsibilities.
If it seems like a hassle, remember that this person trusted you enough to be given this role.
You can refuse the role but you must talk to a lawyer to ensure you are following the proper legal steps to officially renounce your appointment as executor. Depending on where you live, it requires lodging signed court documents. This decision should be made quickly, as depending on the nature of the will, funeral arrangements and other important steps will be waiting on the executor to take control.
Go deeper: Your guide to life insurance for over-65s
Financial disclaimer
The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.
