Probate series – part 1: estate administration and acting as an executor

By William Moore and Sam Baring

Dealing with the estate administration process can be a difficult time, especially after the recent loss of a loved one. The processes and procedures can be daunting and most people will never have acted as an executor before.

To make matters worse, if executors fail to comply with their duties correctly, they can be personally liable for any losses. This is a significant issue where the deceased has died with substantial debts that were previously undisclosed, if they were in a high-risk job in which they have been (or are likely to be) sued, or if they had a previous partner, de facto partner or estranged child that may want to make a challenge against the Will.

We work with executors every day in applying for grants of probate (or letters of administration), and then calling in the assets of the estate and distributing them to the estate’s beneficiaries.

There are many common questions and issues that we see around estates. Over the coming weeks, we will be sharing the most relevant matters for people acting in the role of executor, including:

1. the duties of an executor;
2. what can go wrong when an estate is not administered correctly;
3. remuneration of executors and issues that may arise when engaging professional executors; and
4. tax, duty and structuring opportunities during the estate administration process.

As a starting point, understanding the basic requirements around the role and requirements of an executor is key.

Who is the executor and do they have to act?

An executor is the person nominated in a Will to administer the estate of the Will maker after they die. Most people nominated as an executor will act in that role, however, in some cases where someone does not want to act, they can renounce their appointment, leaving the remaining executors to act.

If the deceased did not leave a Will, certain persons are entitled to be the ‘administrator’ of the estate (generally the deceased’s next of kin or the person who is to receive the largest share of the estate). The role of an administrator is, in effect, the same as that of an executor, however it commences from the date of Court appointment (and not the date of death as is the case with an executor).

Are professional qualifications required?

No professional qualifications are required to act as an executor. That said, we sometimes see legal action being taken against executors (whether they are being sued for monetary compensation, or the beneficiaries of the estate bring proceedings to remove them as an executor) because they have tried to administer the estate themselves and they have made mistakes along the way or have taken too long with the process.

Therefore, if there are any complexities with an estate, it is best for the executor to obtain assistance from professionals.

What do I do as an executor?

There are six overarching duties of an executor. These include:

1. locating the deceased’s Will (a copy will normally be found in their safe, with their lawyers, with their financial advisers or with their bank).
2. acting in the best interests of the beneficiaries of the Will.
3. protecting the assets of the estate (such as maintaining insurance policies on any estate assets).
4. determining the assets and liabilities of the estate.
5. applying for a grant of probate with the Supreme Court.
6. collecting estate assets, paying any liabilities and distributing the estate in accordance with the Will.

Generally, the process executors find most daunting is applying for the grant of probate with the Supreme Court. While there are certain legal documents that need to be prepared, essentially the grant of probate gives executors the right to deal with the deceased’s assets. That is, the executor can provide a copy of the grant of probate to institutions where the deceased held assets to prove that they have been appointed as executor and have the legal right to deal with the assets of the estate.

Once probate has been granted by the Supreme Court, it is essential that executors follow the proper process in administering the estate. There are certain notices that can be published and time frames to wait to ensure that the executor protects themselves from any liability.

Hall & Wilcox assists clients with estate administration every day. If a client or someone you know needs assistance with the estate administration process, the Private Clients team at Hall & Wilcox can assist with any questions.