Who Can Be an Executor of a Will?
Executors are responsible for administering the estate, including all of the assets and liabilities, of a deceased person. The role of an executor is complex and can be quite demanding, and may require a large time commitment, especially if the will is contested or challenged. As a result, it is essential to give careful thought to who is chosen to be an executor of a will.
Who Can Be an Executor of a Will?
An executor must be over eighteen years of age, and of sound mind. Other than these two general requirements, any person can be an executor of a will in Australia. However, because the role is quite demanding, careful thought should be given to who is best suited to undertake this important role.
It is common for people to appoint one or more of their close friends or relatives. This approach results in executors who are most likely to be familiar with the wishes of the testator, and it also avoids the necessity to pay professional fees. The alternative is to appoint a professional, such as a solicitor, to act as an independent executor. This has the advantage that a solicitor will be impartial in implementing the wishes of the deceased. In some cases, it is practical to appoint one close friend or relative and a professional, allowing the professional to take the burden of completing paperwork and organising the estate. Whichever approach is adopted, before nominating an individual as executor the testator should ask the person if they are able and willing, to take on the role.
Can the executor be a beneficiary?
An executor of a will can also be a beneficiary under the will. For instance, adult children commonly act as executors for their parents, even when they are the principal or sole beneficiary of the estate. Similarly, spouses are frequently nominated as both the main beneficiary and executor of their husband or wife’s will. This can be both convenient and efficient, reducing the number of individuals involved in administering an estate.
Tensions can arise, however, when one beneficiary is an executor of a will and other beneficiaries disagree with either the terms of the will or their administration of the estate. It is important to carefully consider who is best positioned to handle the duties of the role and any potentially complicated family dynamics that might result. Acting as an executor can require diplomacy and good communication skills. If it is likely that there will be disagreements between beneficiaries, it may be wise to appoint an independent person. This could prevent the will being challenged or contested, both of which have the potential to reduce the estate through protracted legal actions.
The executor is tasked with a number of duties. They will apply for a death certificate, validate the will through obtaining a grant of Probate, and will also assist with funeral arrangements. The executor may need to notify government departments, such as the Australian Taxation Office and Centrelink, of the death of the testator. They will usually inform banks and finance companies of the death of the testator, discharge loans and make urgent payments, and collect from insurance and superannuation accounts.
The executor is responsible for protecting the deceased’s assets until the will can be administered, which will involve securing premises, compiling an inventory, and seeking valuations of assets. The executor might also take steps such as purchasing insurance to protect the asset during probate, and/or arranging for the sale of a home.
In the event that the will is challenged or contested, the executor is responsible for defending the estate against legal action, and resolving any disputes between beneficiaries. They must be prepared to make a full accounting of their administration of the estate to the beneficiaries.
Only after all of these actions have been completed can the executor distribute the assets of the estate to the beneficiaries. Even after the assets are distributed, the duties of an executor may be ongoing if they are tasked under the will with responsibilities such as administering a trust, especially if there are minor children involved.
What if the Nominated Person is Deceased?
When an individual nominated as an executor dies before they can perform their role, usually, a second executor named in the will simply assumes responsibility for administrating the estate. If there is no second executor named in the will, then any competent adult can apply to the court to become the administrator of the estate. This individual need not be a beneficiary of the estate to apply for the role of administrator.
Resigning and Removal
It is not easy to remove an executor just because a beneficiary is unhappy with their administration of the estate. The courts are reluctant to act unless the executor is deemed unfit to act in such office, in that they are incapable of performing the duties of an executor, demonstrate misconduct, or neglect their duty. Examples of conduct that could lead to an executor being removed would include excessive delays, failures to communicate with beneficiaries, or unwillingness to account for the assets of the estate. In determining whether the conduct is sufficient to have the executor removed, the paramount consideration is the protection of a beneficiary’s interest in the estate.
An executor can resign after they have commenced acting, but this is a difficult process. They must seek approval from the court, make provision for a replacement, and have the original grant of Probate revoked and replaced.
A professional acting as executor, such as a solicitor, will typically be paid a fee. This may be a fixed fee or a percentage with reference to the size of the estate.
When a friend or family member is appointed as executor of an estate, the will may make provision for an amount or specific gift in recognition of this service. Even if no provision is made, an executor is entitled to be paid for their time and effort in administering the estate, in addition to recovering any expenses that are incurred. These costs can be recovered from the estate with the agreement of all beneficiaries, or the executor can apply to the court for appropriate compensation.