Estate Administration in Victoria
The term “estate administration” refers to a set of procedures and rules that govern the management of a deceased estate. In Victoria, these procedures and rules are set out in both common law (that is, cases previously decided by a court) and legislation. The central piece of legislation governing estate administration in Victoria is the Administration and Probate Act 1958. In Victoria, there are two categories of personal representative that are assigned responsibility for estate administration: administrators and executors. An executor is nominated in a will to oversee estate administration, while an administrator is appointed by the Supreme Court of Victoria to conduct the estate administration of a deceased. The duties of estate administration are much the same for both executors and administrators. This article outlines the process of estate administration in Victoria.
The Role of Executor in Estate Administration – Victoria
An executor is named in a testator’s will as the person to carry out their last wishes. Sometimes a professional such as a solicitor or trustee is appointed as executor, but it is equally common for a family member or friend of the deceased to be nominated for the role. It is permissible for a beneficiary of an estate to also act as the executor: in fact, this is perhaps the most common scenario.
On occasion, the person nominated in the will is not able to accept the role of executor. For example, the executor may die before the testator. The nominated executor may also not be able to perform the role because they are not over the age of eighteen at the time of the testator’s death, in which case the court will usually appoint the parent or guardian of the nominated executor.
A nominated executor may be able, but not willing, to take on the duties of estate administration. This is sometimes the result of a testator naming an executor in their will without consulting the person first, or the result of a significant change in circumstances for the nominated executor. If the nominated executor chooses not to accept the role, then they should formally renounce the role. This process is more difficult if the executor decides to renounce after commencing the duties of the executor, so someone who is unsure about proceeding should be cautious to avoid undertaking any of the duties of executorship. If a nominated executor renounces the role, another nominated executor can assume the responsibility alone. Where there are no other executors named in the will, the Supreme Court of Victoria can grant Letters of Administration to someone who is willing to act as an administrator of the estate.
Letters of Administration will usually be granted to a beneficiary of the estate, most often the adult children or spouse of the deceased. Where no beneficiary is able to assume the role of administrator, a creditor of the estate can assume the duties of estate administration in Victoria.
Estate Administration in Victoria: Duties
The executor or administrator who is in charge of estate administration cannot begin to discharge their duties until the Supreme Court of Victoria issues a Grant of Representation (such as a Grant of Probate and Letters of Administration). These grants authorise a personal representative to commence administering the estate, including the collection of the deceased’s assets and debts into an Inventory of Assets and Liabilities, which is submitted to the Supreme Court. The executor or administrator is ultimately responsible for the dispersal of the residual estate to the beneficiaries of the will.
The executor or administrator needs to exactly follow the wishes set out in the will unless they are contrary to the laws governing estate administration in Victoria. For instance, a will may gift a certain piece of property to a beneficiary, but if the estate is burdened by large debts, the bequeathed asset may have to be sold in order to discharge the debts of the estate.
A major tenet of estate administration law is that the executor or administrator must protect the assets of the estate until they are passed on to the beneficiaries of the will. The executor must ensure that any property is insured, secured safely and that the estate is defended from any contest or challenge. If the personal representative is negligent in protecting the estate, the beneficiaries can lodge a complaint with the Supreme Court.
Estate Administration in Victoria: Trustee
On occasion, a testator will need to appoint a trustee to manage trusts that are created under a will. This may be necessary when there are beneficiaries who are under the age of eighteen, or when there are adult beneficiaries who lack capacity. While the executor’s role in the estate administration ends once the property of the deceased is distributed to the beneficiaries, the trustee will continue to administer the trusts established by the will for as long as necessary. The responsibilities and obligations of a trustee in Victoria are established in the Trustee Act 1958.
Estate Administration in Victoria: Remuneration
A testator can make a provision in their will for the executor to be compensated for undertaking the duties of estate administration. If the testator made no allowance for the executor, the court could order that the estate compensate an executor or administrator for the duties of estate administration.
If you need more information about estate administration in Victoria or need advice about the duties of executors and estate administrators, please call Armstrong Legal on 1300 038 223 or send us an email to make an appointment.