What is the Role of an Executor?
An Executor’s role begins as soon as someone with a legal Will passes away. The primary role of an Executor includes locating the original Will, obtaining the death certificate and applying for probate. In addition to this, the Executor needs to advise the beneficiaries, arrange and pay for the funeral out of the Estate funds. Also, they have to take care of follow ups for any special instructions given in the Will.
What If No Will is Found?
When a Will is not located, it means that the deceased person is intestate. In such cases, the Estate is distributed according to the laws of intestacy. These laws command a particular order of payment to deceased’s family members.
In addition to this, an Executor must notify the beneficiaries of the Will. All beneficiaries must be located and contacted including the ones that are overseas.
If appointed, the State Trustees is a government agency that will administer your Estate on your behalf if you die without a Will. The State Trustee may be able to charge your Estate an administration fee of up to 5.5%* of the gross value of assets of your Estate in order to provide an Executor-style service.
Debts and Liabilities Should be Dealt:
Generally, debts must be paid or passed on. Therefore, an Executor needs to set up the entire picture of the deceased’s financial assets. This includes identifying any debtors and creditors. Moreover, an Executor also has to take care of funeral expenses, income tax and fees for administering the Estate.
An Executor is responsible for everyday tasks for example; arranging for pets to be cared for, redirect mail and pay any dues and outstanding debts.
An Executor Has to Insure the Estate
An Executor is responsible for all the assets until they have been passed on to the concerned person/organisation. They must recognise the Estate assets, including any asset located interstate or overseas. These can include; homes, cars, jewellery, superannuation and other investments. An Executor must get all these valued, secured and insured.
They Must Attend to Any Businesses
An Executor is also responsible when it comes to dealing with any business the deceased had an interest in. This can include ascertaining if the business operates as a sole trader, partnership or as company. In addition to this, they may even be required to carry on the running of the business or winding it up. Apart from this, they are responsible for selling real estate and other assets, organise any pending tax issues and invest funds in a prudent manner.
There Can Be Legal risks
Besides all these, an Executor is responsible for resolving estate issues, liabilities along with any disputes. This may also consist of challenges to the Will including any family maintenance claims, beneficiary disputes, validity and capacity issues and entitlement issues.
An Executor Must Also Lodge the Tax Return
An Executor also needs to obtain clearance from the Australian Taxation Office before the distribution of the Estate begins. If this is not done before the Estate distribution, there’s a risk of being personally liable for any outstanding tax. Moreover, they may be required to to gather details of all income earned by the deceased in all the years prior to their death.
An Executor May Also Have to Sell Assets
This typically depends on the Will and the Estate. Moreover, they are responsible for selling and even transferring assets to the beneficiaries. This includes houses, land, shares and all kinds of investments.
What Happens When All Debts Are Paid?
An Executor can distribute the remaining assets according to the Will. The Executor is responsible for funeral expenses, debts and also management of any other claims. In addition to this, they need to prepare a statement for all beneficiaries giving all the details of transactions.
Other than all these, an Executor is generally the trustee for the trusts set up in the Will. This includes all the trust established for minor beneficiaries.