When a person passes away and has left a will, that person would have nominated one (1) or two (2) executors who are responsible for administering the estate. An executor is only able to administer the estate once they have a grant of Probate or Letters of Administration.
If the deceased does not have an executor, or the executor is unable to perform their duties under the will, then you may be able to apply to the NSW Trustee and Guardian and have them nominated as the executor. Should you wish to do this, fees will apply.
As an executor, you have the legal duty to ensure that you deal with the estate properly. This responsibility is contained in section 44 of the Probate and Administration Act (NSW) and includes performing the following duties:
- Collect all the assets of the estate: this includes all items of real and personal property, as well as any shares and money in bank accounts. As an executor, you have a duty to protect these items.
By law, property held in joint names as well as superannuation do not generally form part of the deceased’s estate. This is because, as a general rule of law, the deceased’s interest in jointly held property immediately passes to the other owner. As for superannuation, this is more of a contractual relationship between the deceased and the superannuation trustee. Despite this, it is always best practice to include these items as part of the estate.
Certain complications can arise when the deceased owned a business. In this case, as an executor or administrator, you do not have authority to carry on the business in place of the deceased. This requires a Court to make an order to this effect.
- Pay the deceased’s debts: before anything is distributed to the beneficiaries, you have a duty to ensure that all the debts of the deceased are paid. This can include any money owing on personal loans, as well as any unpaid tax. In some cases, it may be necessary to do a final tax return of the deceased.
Generally, there is a priority through which debts need to be paid, depending on whether the estate is solvent or insolvent. Testamentary and administration expenses are paid in priority to any other debts.
It is also important to ensure that debts are paid with the right assets of the estate.
- Publish a ‘Notice of Intended distribution’: as well as paying the deceased’s debts, you also have a duty to publish a ‘Notice of Intended Distribution’ before distributing the estate to the beneficiaries. This is published online and gives thirty (30) days for creditors to make a claim on the estate. Although in some cases it is not required to publish this notice, it is always good to do as a matter of procedure to protect you as the executor from becoming personally liable in the future.
- Distribute the estate: once you have complied with all your duties per points 1-3 above, you will then be able to administer the estate to the beneficiaries.
At JB Solicitors, we can assist you in understanding your rights and responsibilities as an executor and provide advice and guide you through administering the deceased’s estate. We make sure that, as an executor or administrator, you are not exposed to any personal liability and ensure that you are able to administer the deceased’s estate without any complications.