The role of executor of a deceased estate is an important and in some cases, onerous, duty. The executor “stands in the shoes” of the deceased and it is his or her job to marshal and collect all the deceased’s assets and ascertain the liabilities of the estate (if any).
If you’ve been appointed executor of a deceased estate in Perth, or anywhere in Western Australia, it’s important you understand how to fulfil your role and comply with all your obligations under WA legislation.
Duties of an executor
An executor must take care to administer the estate in a timely manner and should seek professional assistance if required. The main duties of an executor in administering an estate are to:
- keep and render proper accounts and provide them to beneficiaries when required;
- open an account for the estate and keep estate funds separate; and
- distribute the estate in accordance with the will.
Administering the deceased’s estate
To legally deal with the assets of the estate, first the executor must obtain a grant of probate. Once this has been issued, the executor must begin by paying all outstanding debts (if any) and consolidating the assets of the estate for distribution to the beneficiaries under the will of the deceased. Generally, the executor has one year in which to administer and distribute the assets of the estate.
Before making any distributions the executor should:
- contact the Australian Taxation Office to find out whether the deceased had any outstanding debts and whether a final tax return is required; and
- publish a notice in the newspaper giving notice to creditors that the estate will be distributed and giving creditors at least one month to submit their claim.
Giving notice to creditors is not always necessary, but if there is any doubt as to the liabilities of the estate it is recommended so as to avoid any issues particularly after the estate has fully administered.
The executor must then proceed to distribute the Estate according to the deceased’s wishes as set out in their will and assist the beneficiaries in transferring the assets to them.
Negligence of an executor
Generally, no matter how poorly an executor has performed their obligations, if they have not been dishonest they will rarely be held liable for any loss to the estate.
Executors do, however, owe a duty of care to an estate and the beneficiaries of that estate. Examples of situations where executors may be found to have breached that duty are where an executor fails to realise assets resulting in loss of value or the avoidable fees or penalty taxes, a failure to take action to avoid loss, making unauthorised investments or distributing the estate in a manner not authorised by the will.
In certain circumstances executor’s are entitled to receive compensation for their work in administering the estate and where an executor is found to have acted dishonestly a Court will usually refuse to make such an order.
How to renounce being an executor
If a person is appointed as executor of a deceased estate but does not want to, or cannot, act as executor they can elect to renounce their role as executor. This is known as ‘renouncing probate”.
To renounce probate, the appointed executor will need to file a request or what is called a “motion” in Court seeking to renounce his or her right to probate and to execute the will of the deceased. If the executor files a renunciation they cannot at a later stage seek reappointment or obtain a grant of probate for that estate. In order to renounce probate, it is important that the executor has not taken any steps in the administration of the estate or “intermeddled” in the deceased’s estate.
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