Executor Of Estate (WA)
When a testator writes a will in Western Australia, they typically name an executor to posthumously carry out their wishes for their estate. The executor administers the estate according to the wishes expressed in the will and in accordance with the Administration Act 1903. The responsibilities of an executor are many and varied, but their primary duty is to safeguard the assets of the estate during probate and until they are handed over to the rightful beneficiaries. This article outlines the scope of the role of executor of estate in WA, with a particular focus on the executor’s duty of care.
Who Can Be An Executor Of Estate In WA?
The executor does not need to have any particular qualifications, but they do need to be a competent and reliable adult. A testator can employ a professional, such as a solicitor or Public Trustee, to take responsibility for the estate administration, but it is more common for them to choose their executor from amongst their family or friends. A major beneficiary of the estate is often appointed executor as their own interests are served if they administer the estate efficiently and with care.
Multiple Executors Of Estate
The testator can name more than one person as executor in their will. A shared executorship may well be a sensible arrangement, especially if the testator appoints a professional and a family member as co-executors. A professional will lift the heavy administrative duties off the family member during a time of grief and will have the experience and knowledge to wrap up the estate efficiently. A professional executor will also bring impartial independence to the role if disputes arise amongst the beneficiaries. In cases with more than one executor, the parties must act with joint authority on the more consequential estate matters (such as legal contests and the sale of real estate) but can handle smaller aspects of the administration separately.
A nominated executor is not obligated to accept the role. It is a heavy responsibility, so if the named person has any reservations they can engage the Public Trustee to act on their behalf or simply sign a legal renunciation. It is essential that if a person intends to renounce the role they must not undertake any duties under the authority of being an executor, as it will be much harder to give up the role later.
Duties Of The Executor Of An Estate WA
The executor must apply to the Supreme Court for a Grant of Probate to legally validate their administrative role. Once the Grant is issued, the executor is responsible for collecting together the assets of the estate, assigning them a value and protecting those assets until they are no longer their responsibility. Safeguarding the assets of the estate might take the form of buying insurance, taking care of business interests and income, or investing money so that it is not sitting idle. The executor must also defend the estate against any legal contest or challenge.
A last income tax return must be lodged on behalf of the deceased and the executor needs to check with an accountant and the ATO to see if the estate has any outstanding tax liabilities. The executor will pay eligible debts of the deceased using the cash in the estate and, if necessary, through the sale of assets. Once the debts of the testator have been settled, the executor is tasked with dividing the residual estate and distributing it as closely as possible to the wishes expressed in the will. They will notify all of the beneficiaries, prepare statements for each beneficiary, and then transfer the assets. If the will calls for trusts to be established, then the executor needs to follow through on the deceased’s wishes.
Expenses And Remuneration
There is no expectation that an executor should be out of pocket as a result of discharging their duties. In WA, an executor can reimburse themselves from the estate for reasonable expenses, including travel costs, parking fees and any costs that the executor outlays for the funeral arrangements or administration of the estate.
In addition, a professional must be paid a fee for administering an estate. A non-professional executor is entitled to payment only if the testator makes allowance for this in their will, the beneficiaries authorise a payment, or the Supreme Court of WA makes an order for the individual to receive compensation in the form of an executor’s commission.
The maximum amount of commission is 5% of the gross value of the estate, and the amount awarded will depend on:
- The complexity of the estate administration;
- The time that the executor expended conducting their duties;
- The total value of the estate and the type of assets involved;
- The total length of time of the administration;
- Whether the work of the estate was handled by the executor personally or delegated to professionals;
- Whether the executor’s management has benefited the estate.
An executor can maximise their chances of claiming a commission by keeping a detailed record of their administrative role, including the time devoted to the task, and by discharging their duties efficiently with care and seeking professional assistance where appropriate. A solicitor can help draft an application for commission so that it has the best chance of being granted.
Breaches of Duty
If the executor does not perform their duties with appropriate care and diligence then they can be held responsible for any loss or damage to the estate. A suitable party can apply to have an executor removed for breach of duty, and replaced by an eligible administrator.
If you are drafting your will the experienced Contested Wills Team at Armstrong Legal can help you select an appropriate executor. Alternatively, if you have been appointed an executor of an estate, we can assist you through the entire process and answer any questions you might have. Please call our team on 1300 038 223 or contact us to make an appointment.