Someone has passed away and you have been nominated as the executor of their estate – would you know what to do?

The first thing to consider is – do you want to be the executor? It is an important question because executors have the option of renouncing, but only if they have not intermeddled in the estate affairs. Circumstances where executors should consider renouncing include when there is a bankrupt estate where the administration could be left to the creditors, or where the executor has a conflict of interest in performing their duties.

Funeral arrangements will need to be made and a formal death certificate applied for, usually by the funeral director. Centrelink should also be notified as soon as possible to avoid any overpayments.

The original will needs to be located. Some people keep it in a safe place at home but often they only retain a copy and the solicitor that prepared the will retains the original. It is also important to confirm that no later will was made.

The next step is to locate the estate assets, notify the asset holders of the death and provide them with a copy of the death certificate, identify the beneficiaries and consider whether a grant of probate will need to be applied for. An executor may wish to obtain legal advice to understand their responsibilities before proceeding with the estate administration. Any reasonably incurred legal fees would be paid by the estate. For small estates with no real estate, it’s likely the estate could be administered without a grant provided the executor is willing to sign deeds of indemnity releasing the asset holder from any claims against the estate. A grant of probate will be required where there is NSW real estate and/or substantial funds/shares held. There is less risk to an executor in distributing an estate if a grant is obtained,  a notice is published on the NSW Supreme Court website, and the distribution doesn’t occur until at least 6 months after the date of death.

Executors should also obtain advice from an accountant regarding whether there are any outstanding tax returns or amounts owed to the ATO by the deceased, relevant CGT considerations for the estate, and whether the estate is required to file a tax return. The executor should also make enquiries to confirm that none of the beneficiaries are bankrupt.

Once all the assets have been collected, any estate debts paid, and relevant time periods have expired, provided that no family provision claim has been notified, the executor may then proceed with the distribution of the estate in accordance with the will.

Being an executor comes with a lot of risk and sometimes not much reward when there is a difficult estate to administer, conflicting beneficiaries or a family provision claim is made.  I strongly recommend seeking legal advice at an early stage to understand your responsibilities and the legal requirements of administering an estate. KC Hilton, WNB Legal