When it comes to estate administration, the Executor or Administrator and Beneficiaries are at the centre stage. If the Testator (the deceased person who has left a legacy) has a Will, then an Executor is usually named or assigned to take on the primary duty of carrying out the wishes of the deceased. Meanwhile, the named Beneficiaries of an estate stand to gain or benefit from it as instructed by the deceased.
If the Testator dies intestate (without a Will), an Administrator is tasked to manage and distribute the deceased estate.
But these descriptions merely scratch the surface.
Whether you are an Executor, Administrator or Beneficiary, you have very specific duties or roles to fulfil. These responsibilities are discussed in greater detail below.
Table of Contents
1. The Role of an Executor
The Executor of an estate is the named or designated person nominated by the deceased to fulfil their wishes embodied in their Will. Most of the time, the Executor is someone close to or trusted by the deceased.
Whatever the nature of their relationship, the primary duty of the Executor is to ensure the final wishes of the deceased are fulfilled. In performing their role, an Executor should also be prepared to handle several tasks.
1.1 Executor Duties Checklist
The role of Executor is central to the orderly disposition of an estate. They are responsible for the following duties:
1. Finding the original Will and notifying all Beneficiaries named in the Will
As an Executor, you need to find the original Will if you only have access to copies of the Will. You must also contact all Beneficiaries of the estate, including those living elsewhere in Australia and overseas.
2. Making funeral arrangements
Part of your duties as an Executor includes arranging for the transport of the body, as well as paying (will be reimbursed) for both administrative and funeral expenses. This includes obtaining the death certificate from the state or territory’s registry. Check if the deceased had a pre-arranged or pre-paid funeral plan ready.
Moreover, you have to know whether the deceased left any funeral instructions in the Will. If there are none, you will need to coordinate with their family or Next of Kin in making arrangements with a specific funeral services provider.
3. Cancelling services and utilities
You may have to take care of cancelling any services or utilities (e.g., electricity, water, mobile phone, internet contracts, etc.) and other subscriptions of the deceased if they lived alone.
Also, you may have to redirect the deceased person’s mail to your address and inform Australia Post of the Testator’s death.
4. Valuing the assets and liabilities of the estate
Additionally, it’s your duty as the Executor to ascertain the total value of the estate. This requires you to know the details of any personal effects, cash, securities, real estate and business interests held by the estate. This also includes government or Centrelink payments, pensions or other benefits of the deceased.
You need to keep track of all expenses and ensure all liabilities (debts due and owing) are paid in full. There may be instances where you may have to sell certain property and real estate to ensure debts are settled and expenses are paid for.
5. Applying for Probate
In case there are substantial amounts (generally around $50,000 or more) that must be transferred or claimed on behalf of the Testator’s estate, you will need to apply for a Grant of Probate. For this, it’s crucial to have your checklist for Probate. You can apply for Probate with your state’s or territory’s Supreme Court.
Banks, superannuation, insurance companies and the Australian Taxation Office (ATO) usually require a Grant of Probate if an Executor is to administer parts of the estate being held in these financial institutions.
6. Opening an Estate of the Late bank account
An ‘Estate of the Late’ account is a bank account opened by the Executor(s) (or estate Administrator, as the case may be) for the purpose of transferring estate funds into and managing the financial affairs of the deceased estate.
7. Collecting the assets and managing the estate
After the Grant of Probate is given, all assets must be transferred into the estate and managed by the Executor. Managing the estate of the deceased includes dealing with government agencies and companies, communicating with the Beneficiaries, managing funds, engaging lawyers and tax accountants, safeguarding assets, selling property (where appropriate), and dealing with creditors, to name a few.
8. Notifying the ATO and completing relevant tax returns
If the deceased has a Tax File Number and was faithfully filing tax returns, you have to notify the Australian Taxation Office (ATO) of their death. You will also be responsible for lodging a tax return for the Testator and their estate for the applicable financial year(s).
9. Dividing the estate and distributing the assets to named Beneficiaries
When you are finished with finalising and settling all the debts and taxes of the deceased person’s estate, you may proceed to the distribution of the residual estate. The division of the estate among Beneficiaries should, of course, be done according to the provisions of the Will.
10. Arranging for pet care
If the deceased person kept a pet or pets, you have to ensure they are cared for. If you are the deceased person’s partner or spouse, you may continue to care for the pets.
In case the deceased person appointed a guardian for their pets in their Will, you’ll have an easier time arranging for pet care. If the deceased made no such arrangement, you will have to find someone willing or able to provide ongoing pet care. sometimes an allowance may be paid to the caregiver to cover food, insurance, and medical bills.
11. Defending the estate from any claims against it
There may be instances when certain people feel that they have been left out of a Will (as Beneficiaries) or are not getting enough of what they think should be their share. When this happens, as Executor, it is your task to defend the Will since your primary responsibility is to carry out the wishes of the deceased. You may need to engage a lawyer to help with this.
1.2 Should an Executor Have a Copy of the Will?
It is of utmost importance for an Executor to hold the Will or know the location of the original Will as this document is required to determine who the Executor(s) and Beneficiaries are, as well as obtain Grant of Probate.
All other interested persons (e.g., spouse, parent, guardian, etc.) who want a copy of the Will may do so by providing a written request to the Executor or solicitor holding the Will of the deceased.
Tip: In case the original Will is requested by a company, government agency or court, it is the Executor’s responsibility to ensure it will be returned as it is the most important document in the estate administration process.
1.3 Can an Executor of a Will Spend Money from the Estate?
The Executor of an estate will incur expenses related to the administration, which need to be covered and reimbursed by the estate. Some examples of costs that may be paid from the estate funds include funeral costs, photocopying, lawyers and accountants, professional valuations, removalists, storage, court fees and anything that is directly associated with administering the estate.
There are instances when the deceased provides for how much the Executor should be paid for their work in the Will. If no such provision is made, the Executor won’t be paid for their services. However, an Executor may be entitled to claim reasonable costs.
2. The Role of an Administrator
As previously mentioned, when the Testator dies intestate or without leaving behind a Will, an Administrator needs to take on the duties.
In this case, the responsibility of estate administration usually falls on one of the Beneficiaries, Next of Kin or a family member. The duties of an Administrator are essentially the same to those of an Executor and the above applies. However, this person will need to apply for Letters of Administration to their territory or state Supreme Court, rather than Grant of Probate.
The Administrator, after receiving the Letters of Administration from the court, is tasked to execute the estate in accordance with the laws of intestacy.
3. The Role of Beneficiaries
A Beneficiary is someone who gets all or a portion of the assets and cash distributed from a deceased person’s estate per the Will or intestacy rules.
If you are a Beneficiary, you stand to gain from an estate if assets remain after all liabilities are settled by the Executor or Administrator. However, note that there may be some tax obligations for any cash and assets you may receive.
These may be in the form of super benefits, assets or income earned. Whether you are an Australian resident or non-resident Beneficiary, it falls on you to ensure you know your tax obligations concerning any cash and assets you may receive from an estate.
When it comes to items like organising the funeral, clearing and cleaning the house, and then asking for reimbursement, etc., the Beneficiaries should always check with the Executor or Administrator before taking any such steps.
These tasks are not part of your role as a Beneficiary. If you insist on doing these things, you may be frustrated to find that you will not be compensated or reimbursed for your time and expenses.
More importantly, be patient. As a Beneficiary, you need to respect the time the estate administration process takes. Focus your efforts on supporting the Executor or Administrator, wherever possible, as this will make the process more bearable.
4. Managing Expectations
Estate administration can be simple and straightforward or extremely time-consuming and stressful depending on the key people involved, namely the Executor or Administrator and the Beneficiaries.
By knowing the duties that come with each role, it’s easier to manage your own expectations. You can also play a proactive role, should you wish, in the estate administration process.