FAQ: Being an Executor of an Estate
Q: What is Probate?
Probate is the process of having the Supreme Court of Victoria give official recognition to the deceased’s last valid Will through the provision of a Grant of Probate, which is an Order of the Court saying that the Will is valid and bestows permission to the Executor to proceed with administering an estate.
Many people believe that simply being named as the Executor in a Will by itself enables them to deal with the deceased’s estate. However, it is only once a Grant of Probate is given by the Court that the Executor is empowered to administer the Will, namely, to collect the assets and pay any debts of the deceased person and then distribute the estate in accordance with the deceased’s wishes.
To apply for Probate the Executor will need to complete a number of forms which are prepared by a Solicitor to prove the validity of the Will, and will need supporting material including documentary evidence of death (such as a Death Certificate), proof of proper signing and attestation of the Will, and details of assets and liabilities, among other things.
Q: What is an Executor of a Will?
The Executor of a Will is the person nominated to take care of a deceased person's estate after they die and to give effect to their wishes. The role of Executor carries a great amount of responsibility and trust, and it is the most important decision for a Will-maker.
An Executor has the legal and administrative task of sorting out the deceased’s assets and debts, ensure that the deceased’s wishes for their estate, as outlined in the Will, are upheld, and are legally responsible for the Estate and, as such, the role carries a great deal of responsibility and may involve a significant amount of work depending on the complexity of the Estate.
Q: What does an Executor have to do?
An Executor’s duty is to secure the deceased’s assets and property, see that the funeral and administration expenses (as well as outstanding liabilities and taxes) are paid, and to distribute the assets to the beneficiaries in accordance with the deceased’s Will.
It is important to note that not all estates are alike and can differ for a number of reasons.
An executor’s duties may include:
File for a Grant of Probate with the Supreme Court
Organising the funeral
Locating the original Will and obtaining a copy of the Death Certificate
Making sure any property and assets are safe and secure
Determining the value of and preserving assets
Paying insurance policies, debts and taxes
Collecting monies belonging to and debts owed to the deceased
Lodging tax returns for the deceased and for the estate
Selling properties and setting up trusts
Reporting to and distributing the proceeds of the estate to beneficiaries
Defending the Estate during any legal proceedings
Q: How long is the process?
It depends. An executor must act with great care and the time required to administer the estate property will change depending on what is required. The minimum time to finalise an estate is six months from the date of death, even for a simple estate. Most estates are finalised within 9–12 months, however there are many factors that effect this time, including:
Difficulty in locating beneficiaries or identifying assets
Delays with selling assets such as real estate or shares
Income or tax issues
Challenges to the Will or claims for further provision from the Estate
Where the estate involves setting up testamentary trusts for minors or life interests
Q: Does an Executor get paid?
Administering an estate can end up taking a lot of time and attention. However, the starting point is that there is no requirement for an Executor to be paid for acting in that role. In many cases, the Executor is a family member of the deceased and is already a beneficiary of the estate.
There are still a few ways that an Executor can be paid for administering the estate.
If the Will maker has included a payment clause within their Will to ensure payment of an Executor. This can be as simple as a fixed dollar amount, be based on an hourly rate mechanism, or allow the person to charge their usual professional rates for acting. In these cases, there is no need to obtain the consent of the beneficiaries or make an application to the Supreme Court to be paid as the Will maker's intentions for the Executor to be paid will be clear.
If no payment clause is included in the Will, an Executor can seek the consent of the beneficiaries of the Will to be paid. For this to be effective, the beneficiaries must all be adults, and must all give fully informed consent.
If there is no payment clause, and consent cannot be obtained, an Executor is entitled to apply to the Court for commission. This can be made up of an amount not exceeding 5% of the gross value of the realised value of the assets of the estate, before payment of funeral expenses, legal costs, agent’s commissions on the sale of real property and any government charges or taxes payable by the estate. However, the percentage typically ranges between 0.5% to 3%, depending on the size of the estate and the amount of work required.
Q: What if I do not want to be Executor?
It is clear from the above that the role of Executor can be onerous. So just because you have been named an Executor in a Will, it does not mean you have to accept the responsibility.
If there is another Executor named, they can take on the role and duties by themselves. If you are the sole Executor, you can apply to the court to appoint someone else.
However, it is important to be aware that giving up the responsibility (aka revoking your executorship) is final and you cannot change your mind later.
Contact Us for further advice in relation to Wills and estate planning