Executor of Estate
An executor of estate is charged with managing the affairs of a deceased person in accordance with their will. In Victoria, the role of the executor is one of considerable responsibility. An executor is entrusted with ensuring that assets are safeguarded during the probate period and eventually transferred to the rightful beneficiaries. Executors are often chosen from the testator’s close friends and family, but a professional may also be appointed to administer the estate. An executor who fails to discharge his or her duties faithfully can cause considerable loss to the interests of a deceased estate. This article reviews the role of an executor of an estate in Victoria, highlighting, in particular, the risks of improper executor conduct.
The most critical activity undertaken by the appointed executor is to apply to the Supreme Court of Victoria for a Grant of Probate. Beyond this key task, the duties of an executor vary depending on the circumstances. Most executors will play a part in making funeral arrangements, and will usually apply for a copy of the death certificate. Executors will generally take responsibility for accounting for the estate, which requires that all assets are located, assessed for value, and safeguarded.
Once probate has been granted, the executor will discharge the debts of the estate. The executor of the estate must consult an accountant to ensure that any tax liability is satisfied. The executor will then distribute the remaining assets in accordance with the will of the deceased. If there is a legal challenge or contest of the estate, the executor will also defend the estate in court.
Renouncing An Appointment as Executor of Estate
A nominated person does not have to accept the appointment as executor. A nominated person can, before applying for a Grant of Probate, appoint the State Trustee to act in their stead, or simply sign a renunciation. However, once a person has undertaken any aspect of the duties of executor, they have effectively accepted the role, and it is much harder to renounce. As such, if someone is ambivalent about acting as executor, he or she should avoid undertaking any of the duties of the executor until they have made a final decision about accepting the role.
Multiple Executors of Estates
In Victoria, if multiple executors are appointed by the will of the deceased, and all are willing to act, they can act in concert to fulfil the duties of the executor. This has considerable advantages, especially as a pair of executors can act as checks and balances, to ensure that the estate is carefully managed. Having multiple executors acting in concert also reduces the burden of responsibility for those involved. It is possible to appoint a professional (such as a solicitor) to discharge the administrative duties of the deceased estate, and a family member or friend to care for personal property and pets of the deceased during the probate period.
If several executors have been named, and are both willing to act, then they act with joint authority. The executors must act jointly to lease, sell or mortgage a real property, or defend the estate in court. For smaller matters of estate administration, either of the executors may act alone representing both their fellow executor and the deceased estate.
Executor of Estate – Expenses and Remuneration
An executor is able to claim against the estate all the costs and expenses that they incur administering the duties of their role.
A professional who is acting as executor will be paid a fee, but a friend or family member is not usually remunerated. A will can stipulate that the executor be paid a fee, or be given a specific gift in recognition of their contribution. Alternatively, the beneficiaries of the estate can agree to make a payment to an executor. In Victoria, an executor can also apply to the Supreme Court to receive a maximum of 5% share of the estate value. This is most likely to occur in cases where the estate is particularly valuable, complex and time-consuming.
Obligations of an Executor of Estate in Victoria
In Victoria, the basic principle guiding the conduct of an executor is that they act in accordance with the wishes of the deceased, as they are expressed in the will. However, an executor must only follow the instructions of the deceased in so far as those wishes are not contrary to the laws that govern deceased estates in Victoria.
The executor must act with due care and honesty to protect the interests of the deceased estate, but they do not need to be an impartial and uninterested party. In fact, the executor of an estate is often also its chief beneficiary. Where there are multiple beneficiaries, an executor has a duty to attempts to mediate disputes between beneficiaries and reach negotiated outcomes.
Executor of Estate – Breaches of Duty
The executor has a duty to act in accordance with their obligations, and if they breach this duty of care, they may be found to be liable. For instance, the executor may be held responsible if they cause a loss to a beneficiary or claimant through mistake or lack of diligence. They must also answer to the courts if there is an unreasonable delay in the administration of the estate.
An application can be made to the court to remove an executor of an estate from their duties. The court will need to view the original grant and hear the details of the executor’s lack of diligence or other reasons they are unsuitable for the role. If the court agrees with the application for removal, and a suitable candidate has volunteered as a replacement, then they may appoint an administrator to take over the duties of the discharged executor.