10 Common Mistakes Executors (& Administrators) Make

Being asked to serve as an Estate Executor is an honourable duty. After all, you were most likely chosen as being someone the testator had full confidence in.

When the time comes for you to administer an Estate, you’ll quickly realise the role isn’t for the faint of heart. As Executor, you have a legal responsibility to administer the Deceased Estate according to what is stated in the Will. Moreover, undertaking the task of Estate Administration not only involves ensuring debts and creditors are paid accordingly, filing, documentation and meeting deadlines but may also include carefully manoeuvring family issues.

You may have to deal with disgruntled Beneficiaries and interested individuals looking to contest the Will. Worse still, if you are perceived or proven to have committed Executor mistakes, you can be sued and personally liable.

Even if there is no Will and you are appointed to become the Administrator of an Estate, you’ll be taking on similar responsibilities and be exposed to the same risks.

To avoid the risks that come with your role, you need to know about some of the biggest mistakes Executors make.

1. Begin Administering the Estate Prematurely

As an Executor, your role in administering an Estate generally begins the moment you start making funeral arrangements for the deceased. Once the death certificate is issued, you can apply for Grant of Probate (or Letters of Administration) and proceed to your other tasks. These include collecting, recording and protecting the assets included in the Estate, paying off debts, dealing with various admin duties and distributing the proceeds of the Estate in accordance with the Will.

The role of Executor, as mentioned earlier, is not one to be taken lightly. As you can see from the quick rundown of some of the duties of an Executor, undertaking the job entails patience, commitment, time and a lot of coordination and communication. Moreover, it can take several months to a year or more to administer an Estate properly, depending on its size and complexity. It can also be an emotionally draining role, especially when there are conflicts within the family or among Beneficiaries.

Therefore, if you do not see yourself being able to fulfil the role of Executor, you are well within your rights to decline. Do not feel bad about rejecting the assignment or renouncing executorship.

Taking on the role of Executor without fully understanding what it entails can lead to more stress, frustration, heartaches and even the risk of personal liability. For instance, you may have already started with some administrative duties and then changed your mind, so you no longer want to be Executor. Know that at this stage, you’ll have to prove to the court why you need to relinquish the role.

So, you should only accept the role with your eyes wide open and a complete understanding of your duties and responsibilities.

2. Delaying the Administration Process

Sometimes, a person designated as the Executor of an Estate meets with the attorney of the deceased, accepts the role and then does nothing. They don’t perform any of the duties they are supposed to in administering the Estate, even after receiving numerous reminders from the lawyer and requests from the Beneficiaries. Disregarding the role of Executor after accepting it is one of the worst estate administrator mistakes you could ever make.

In the end, you may end up being petitioned for removal from your role by the Beneficiaries.

Accepting the role of Executor is not about getting the title of one. You have a legal responsibility to move the proceedings forward, apply for Grant of Probate and administer the assets and see your work through to the end. 

If you feel you’re not a good fit or cannot commit the time and energy required in Estate Administration, then you are free to refuse the assignment — and do so as early as possible.

3. Not Keeping Detailed Records

As the Executor of an Estate, you’ll face a multitude of tasks you’ll need to finish within deadlines. If you don’t have any Co-Executors and legal assistance, you’ll probably need to do everything on your own — from finding, collecting and recording financial assets to preparing a property or business for sale. You’ll have to oversee documentation and file all kinds of paperwork. Therefore, staying organised is key.

You can stay on track by using checklists and tools available online (like the ones we have at simplyEstate). Use document and task lists to stay on top of what you’ve accomplished and what you have yet to do.

Be especially careful with keeping detailed records of all testamentary expenses, your activities as well as any paperwork you handle or generate that is relevant to the Estate. This includes ensuring you have release documents signed by all Beneficiaries. These are proof that the Beneficiaries have approved of the accounting or your handling of the Estate funds before the proceeds are distributed to them.

By staying organised, you can avoid missing important files and documents. You’ll also be able to fulfil your duties efficiently and protect yourself from personal liability.

4. Not Identifying, Locating and Securing Assets and Personal Belongings

When you take on the role of Executor (or Administrator), one of the first things you need to take care of is securing the assets and personal belongings of the deceased. For example, you can keep the Testator’s room and study under lock and key, as well as their other possessions, including items in their office or workplace.

By making sure everything is left as is (or at least untouched by others, especially the Beneficiaries), you ensure nothing is taken or stolen or turns up missing after the Will is read. You can then proceed confidently forward and begin cataloguing or conducting an inventory of the assets included in the Estate.

5. Trying to Administer the Estate Without a Lawyer to Save Money

At simplyEstate, we believe in empowering Executors and Administrators to do as many administrative tasks as possible. However, Executors and Administrators must always act in the best interest of the Estate. This usually requires some form of legal advice or assistance along the way.

With a probate lawyer or solicitor, you can ensure the administration will be done in accordance with the relevant rules and regulations of the state and territory. This way, you can avoid unpleasant surprises after the Estate funds or assets have already been distributed.

Although you may initially worry about the cost of legal expenses, it’s often cheaper in the long run to get some legal advice early on, rather than trying to deal with it all on your own. Your inexperience and inadequate legal knowledge may cost the Estate dearly. For example, you can miss filing deadlines or fail to comply with certain legal requirements, which, in turn, could mean additional costs to the Estate.

When these things happen, you’ll not only be delaying the process of administration, but you could also be facing complaints from the Beneficiaries.

6. Failing to Manage Expectations and Communicate With the Beneficiaries Regularly

If you are a family member appointed as Executor (or Administrator), avoid rushing and over-promising, even when you know that some Beneficiaries are in a hurry to get the Estate Administration process over and done with and receive their inheritance.

Remember that your duties as an Executor (or Administrator) cannot be accomplished on a weekend or a month. Estate Administration is a lengthy, complicated process, and you need to give yourself time to do it properly, generally within six to 12 months. The duration of Estate Administration typically depends on whether there is a sizeable Estate involved and any complicating circumstances.

If you rush through the process, you could end up being personally liable for any mistakes you make.

Also, avoid giving out numbers or figures in relation to the Estate without ascertaining the accuracy of your calculations. To be safe, do not give out information that’s unverified or premature. Always work on managing the expectations of Beneficiaries and act sensibly.

Never forget that you are supposed to protect the interests of the Beneficiaries and that you are acting on their behalf. Therefore, communicate with them regularly if there are updates or developments to report.

Be prepared to produce documentation of all Estate-related transactions when updating Beneficiaries. Although some may seem impatient, keeping them in the loop is usually enough to keep them happy. Let them know about your progress and any obstacles you encounter along the way.

Communicating with the Beneficiaries regularly will also aid you in managing their expectations. This way, they become aware of the many different tasks and roadblocks you have to deal with in performing your duties.

7. Being Held Ransom by the Beneficiaries

An Executor (or Administrator) is responsible for protecting and defending the Estate and has a fiduciary duty to the Beneficiaries. Beneficiaries, on the other hand, have the right to a due administration of the Estate, including the right to an accounting and to the distribution of assets.

However, no Beneficiary has the right to hold the Executor (or Administrator) of an Estate ransom and compel them to make a decision in the Beneficiary’s favour even if it goes against their duties to the Estate.

If there is a conflict among the Beneficiaries, the Executor (or Administrator) should not take sides with any one of the Beneficiaries. Favouring one (or more) Beneficiary over others can lead to your removal from your role by the probate court. Instead, as Executor (or Administrator), you must remain impartial and attempt to mediate and resolve any disagreements. In case the situation gets out of hand, your best recourse is to seek legal advice.

8. Not Keeping Estate and Personal Funds Separate

There are instances when Executors mismanage or misappropriate Estate funds, not because of a wilful intent to use them for their personal benefit but primarily because they fail to keep track of expenses. Even an honest, upstanding Executor can end up carelessly ‘borrowing’ from available funds and realise later that they were unable to properly account for Estate-related and non-Estate-related spending.

Therefore, it’s important to never borrow or use Estate funds for personal spending, even if you intend to repay it immediately or at a later date. When you are busy taking care of Estate affairs and your own, it’s easy to put off accounting or documentation for later and then forget them in the process.

If you have questions about how to fund certain transactions or are unsure whether the Estate must shoulder certain expenses, it’s best to get in touch with your probate lawyer. Failing to manage Estate funds properly could mean facing a civil lawsuit or the wrath of the Beneficiaries.

9. Distributing Assets Too Early

An important part of Estate Administration is taking a thorough and proper accounting of the liabilities or debts of the Estate. This includes lodging the necessary tax returns on behalf of the Deceased Estate, serving proper notice to parties that may have interests in the Estate and paying off debts or satisfying creditor obligations.

If you omit these crucial steps, you may be held personally liable, particularly if it is proven that you failed to follow the appropriate process of managing Estate affairs.

Remember, when you distribute the assets of the Estate prematurely, there may not be enough money to pay bills, taxes, family provision claims, creditor claims, etc. When this happens, the court could obligate you to use your own assets and money to address such problems.

In states like Western Australia, it is considered prudent for an Executor not to distribute Estate assets before six months after receiving Grant of Probate. Doing so gives eligible, interested parties ample opportunity to challenge or contest the Will, if they want to.

10. Not Following the Terms of the Will

Although this is mentioned last, the primary responsibility of an Executor is to administer the Estate and distribute the proceeds according to the Will of the deceased.

Some Executors may think it is all right to ignore bequests, especially if they disagree with the appropriations made by the deceased.

For example, an Executor family member close to the deceased could disregard some instructions in the Will. Let’s say a spinster aunt bequeaths rental property to a niece named Anne whose parents died while she was young. The aunt’s intent is to ensure Anne has a source of income so she can finish her studies. However, when the aunt dies, Anne gets a full scholarship to a prestigious university. The Executor, the deceased person’s brother and Anne’s uncle, then unilaterally decides to withhold Anne’s inheritance and replaces it with a lump sum.

Such a change, of course, is not allowed when the aunt’s Will is considered valid.

When an Executor wilfully fails to provide each named Beneficiary their entitlement according to the Will, they need to be prepared to face claims or lawsuits by frustrated Beneficiaries.

Other Mistakes Made by Executors to Avoid

Aside from the above 10 common mistakes Executors make in the process of administering an Estate, you also need to be on the lookout for and steer clear of the following:

  • Incorrectly interpreting the Will: Keep in mind that a Will is a legally binding document. If you find yourself unable to understand certain legal terms used in the Will, make sure you seek legal assistance in interpreting the Will.
  • Not taking the role of Executor (or Administrator) seriously: Taking on the role of Executor (or Administrator) entails fulfilling all the duties therein — which can be time-consuming as well as physically and emotionally demanding. It also requires you to be impartial and transparent in all your dealings. Therefore, make time to get to know your role and weigh whether it is something you can undertake and see through. If you have doubts or questions, seek legal advice.
  • Asking a real estate attorney for advice on Estate Administration matters: Whether you have a friend who is a brilliant real estate or corporate attorney or an expert litigator, it does not follow that they can advise you on Probate-related and Estate Administration matters.
  • Thinking you are all-powerful and assuming you can do whatever you want: Perhaps you were close to the deceased while they were alive and have been appointed Executor of their Estate. However, do not assume that other family members you hold grudges against are now at your mercy just because they are Beneficiaries of the Estate you are administering. As the Executor, you are expected to be impartial and truthful, remain faithful to the wishes of the deceased, and protect the interests of the Beneficiaries.
  • Selling Estate assets without informing the Beneficiaries and obtaining professional valuations: It is essential to be open and honest about all your dealings concerning the Estate — whether it’s selling vintage cars, artworks, family heirlooms or real estate property included in the assets of the Estate. If not specified in the Will, it is advisable to consult with the Beneficiaries before making decisions over estate property that may carry sentimental value. Moreover, prior to disposing of assets, it is advisable to get professional valuations or seek agreement in writing by the Beneficiaries about the final valuations.
  • Being unable to collect monies owed to the Estate: In collecting and cataloguing Estate assets, you need to include receivables or monies due to the Estate. If you have documentary evidence proving there are debtors you should approach to recover funds or collect outstanding debts from on behalf of the Estate, communicate with them in writing. Failure to do so could reduce the total assets of the Estate and, consequently, the amounts the Beneficiaries will receive. You may then end up facing a lawsuit filed by the disgruntled Beneficiaries. If you are unsure about the process, consult a solicitor to ascertain how much time debtors should be given to complete their payments, as well as the proper payment notification methods.

Your role as Executor (or Administrator) of an Estate involves undertaking a multitude of tasks that can test your patience.

Therefore, make sure you avoid the mistakes made by Executors discussed here and ask for assistance when unsure.

For a discussion on the Estate Administration process, book a free phone appointment with simplyEstate. You may also use the Checklists & Tools to stay organised and ensure you perform your duties efficiently.