Executor of Estate (NSW)
An executor of estate is entrusted with administering the will of a person after their death. In New South Wales, executors are responsible for safeguarding the assets of the deceased during probate until they can be handed over to the rightful beneficiaries. The executor of estate is typically chosen from amongst the testator’s family or close friends, but there are also professionals who can be employed in the role. The position of executor should not be accepted lightly, as a negligent executor can cause financial damage to the estate by not faithfully attending to their duties. This article explores the role of the executor of an estate in New South Wales, with particular focus on the consequences if an executor acts without due care.
The executor must apply to the Supreme Court of New South Wales for a Grant of Probate, and beyond that, the duties of the executor depend on the particular circumstances. Many executors are involved in arranging the funeral of the deceased and applying for a copy of the death certificate. One of the most time-consuming parts of the executor role is the accounting of the estate, where the assets of the deceased are listed and valued. These assets must then be safeguarded until they can be delivered to the beneficiaries. The executor is responsible for not only defending the estate against theft and damage but also from legal challenge or contest.
After probate is granted, the executor can discharge the liabilities and debts of the estate. It is important that the executor consults an accountant at this point to make sure that the tax liabilities of the estate have been considered. Once the debts have been paid, the leftover assets can be distributed in accordance with the will of the deceased.
Renouncing an Appointment as Executor of Estate
While it is an honour for a person to be named as executor, the appointed party does not have to accept the responsibility. Before applying for probate, the nominated executor may instead appoint the NSW Trustee and Guardian to act on their behalf or sign a renunciation of the role. However, if a person has already started acting as an executor, then it is much more difficult to renounce their duty. That is why it is critical for an appointed executor to wait until they are fully committed before they begin to manage an estate.
Multiple Executors of Estate
In New South Wales, a testator can appoint multiple executors in their will. This is usually a safeguard in case one of the named people is unable or unwilling to act as executor when they are needed. If, on the other hand, multiple named executors are willing to accept the role, they can work in concert to administer the estate. There may be advantages to having multiple executors work together: they can act as a check on each other and they can share the burden of responsibility. It may be practical to appoint a solicitor-executor to take care of the more administrative duties of the deceased estate, leaving a family-member-executor free to look after the pets and personal property of the deceased during probate. Multiple executors must act with joint authority on more significant aspects of the executorship (such as selling, mortgaging or leasing property, and defending the estate in court). One executor may represent the estate on matters that are of less consequence.
Executor of Estate – Remuneration and Expenses
There are unavoidable costs associated with administering an estate, including personal costs such as travel expenses. If the accounts of the deceased have been frozen, the executor will also have to find funds to pay for funeral expenses and household bills. An executor is not expected to be out of pocket for these expenses: they should lodge a claim with the court for any costs they incurred while administering the estate.
A professional who acts as executor of an estate is paid a fee for their services, but a friend or family member is typically not remunerated in the same way. A testator can leave a gift in their will for an executor, or the beneficiaries may choose to pay the executor for his or her efforts. In New South Wales, the Probate and Administration Act 1898 allows an executor to apply to the Supreme Court for a discretionary estate payment. The Supreme Court Registrar will calculate a just and reasonable commission depending on the size and complexity of the estate, usually 1-2 % of the value of the assets.
Obligations of an Executor of Estate in New South Wales
In New South Wales, an executor of estate must try to abide by the wishes of the deceased as they were expressed in the will. This is only possible where the deceased’s instructions are legally valid and do not contradict estate law in New South Wales. For instance, if someone bequeathed their entire estate to their pet, the will would be invalid, and the estate would be distributed instead according to the rules of intestacy.
Breaches of Duty
The executor of an estate must ensure that they act honestly and with care to administer the estate, otherwise they can be held liable. For example, if the executor causes a beneficiary loss through lack of diligence or mistake or the administration of the estate is excessively delayed, they may be held responsible in court.
The courts can remove an executor of an estate from their role if they are deemed unsuitable. The courts will consider the original grant and hear submissions relating to the executor’s conduct, and if necessary, order the removal of the executor. In these circumstances, the court will check if a suitable replacement has volunteered to act as administrator in the absence of the discharged executor.
Armstrong Legal can help you if you have been appointed executor and need help with the administration of the estate. Please contact us on 1300 038 223 or message us to make an appointment.