Is Being An Executor Difficult? (NSW)

Solicitors are often asked the question, ‘Is being an executor difficult?’ When a testator appoints a person to act as executor of a deceased estate, it is an act of faith and an honour for the appointee. But there is no denying that being an executor in New South Wales can be time-consuming and challenging. This article explores the responsibilities involved in being an executor in NSW, and some of the hazards to avoid when administering a deceased estate.

Choosing An Executor Can Be Difficult

A testator should carefully consider the choice of executor (also called their “personal representative”) as it is not a role that is suitable for everyone. The main responsibility of an executor is to finalise the legal, financial and personal affairs of the testator. The list of the executor’s duties varies depending on both the size of the estate and the specific circumstances, but generally include:

• Applying for probate;
• Collecting the estate assets and paying debts;
• Protecting the deceased’s assets;
• Defending the estate during legal proceedings;
• Managing the deceased’s taxation affairs; and
• Distributing the assets of the estate.

The testator usually chooses their personal representative from amongst close family members, such as a spouse, sibling, or adult child. A suitable executor is someone who is capable of undertaking administrative tasks and has good communication skills to enable them to liaise with all beneficiaries. Some executors will also need personal resilience to be able to handle volatile reactions from family members who may resent the terms of the will.

In some cases, there is no one amongst the testator’s family and friends who is suitable or willing to act as executor, or the family situation is so volatile that it is unwise to appoint a volunteer executor to the role. In such cases, it is preferable to have an independent outsider manage both the arrangements and any disagreements that might occur between beneficiaries. There are professionals, including solicitors, who can act as impartial executors and who have the skills to manage conflict between family members.

Is Being An Executor Difficult?

There are numerous duties and responsibilities involved in being an executor in NSW. Some estate administrations are far more complicated than others, but there is really no such thing as an “easy” executorship. A volunteer executor who is in charge of a loved one’s estate will have to manage a significant number of administrative tasks, often while grieving for their own loss. It can take anywhere from six months to a year for an executor to settle an estate: in fact, it can take years to fully wrap up an estate if there are legal challenges or complex assets to sell.

One of the duties of an executor is to defend the estate against legal challenges and contests. For this reason, an executor may find they have to represent the estate in a complex legal case contesting the terms of the will are contested or challenging the validity of the will. Although this obviously does not occur in every case, any executor should be aware of the possibility that this may occur, and seek legal advice if this circumstance does arise.

Fiduciary Duty

An executor has a fundamental fiduciary duty that can be difficult to discharge faithfully. This means that the person has a special legal obligation to act honestly and in the interests of the beneficiaries of the estate. When an executor mismanages this difficult duty, it can cause financial loss for the beneficiaries, and perhaps even incur personal liability for the executor.

Removal And Renunciation Of Executor

Anyone who has been selected as an executor should understand that the role cannot be taken lightly, and it is much harder to give up the role later than it is to renounce their appointment altogether before starting.

An executor who is finding that it is too difficult to manage the estate administration can apply to the Supreme Court of NSW for someone to take over the duties. The court can appoint an appropriate administrator to replace the resigning executor. There is also a provision in the Probate and Administration Act 1898 for the executor to ask the NSW Trustee and Guardian to administer the estate in their place.

The court can order the involuntary removal of an executor who is finding the role of executor too difficult, or who is failing to act in the interests of the estate. This will only happen if there is evidence that the executor is unable to discharge their duties faithfully and in the best interests of the beneficiaries.

Given the level of difficulty involved in administering a deceased estate, some non-professional executors choose to apply for remuneration in the form of an executor’s commission. The executor is paid for their “pains and trouble”, and is entitled to a “just and reasonable” amount. The executor is only eligible for this commission if they can produce financial estate accounts upon judicial request. The court will typically decide the rate of commission based on the difficulty of the task that the executor undertook, given the complexity of the will and estate, the amount of work involved, and the degree of diligence the executor showed in the face of these difficulties.

Being an executor in NSW can be extremely difficult. If you have questions about the kind of work involved in administering a deceased estate or have run into difficulty during the course of your duties, the contested wills team at Armstrong Legal can help. Please contact us on 1300 038 223 for assistance with responding to a legal challenge, or for any advice about tackling the role of executor.