Distributing the assets of a loved one who has passed can be an extremely emotional process. The stress can be heighted if there is no Will in place and it is not clear who is to administer the estate.
What is an estate?
An estate is the net worth of an individual and takes into account their:
- Motor vehicles
- Any other valuables.
This includes assets which are in joint names.
What is an executor?
In the preparation of a Will, the testator (person for whom the Will belongs to) or the deceased is required to nominate a person called the ‘executor’ who will be responsible for managing or administrating of the estate once the testator passes.
The role of the executor is to represent the deceased and to finalise their personal, financial and any legal affairs.
The executor is generally someone who the deceased can trust and who has agreed to take on the role.
The deceased will generally have their wishes expressed in their Will, and the executor must carry out the wishes in accordance with the Will.
The executor’s role after the deceased’s passing is to:
- Apply to the court for probate
- Preserving and maintaining estate assets
- Assemble the assets and pay liabilities
- Defend any claims against the estate
- Distribute the assets to beneficiaries
It is important to note that the executor cannot distribute the assets of the estate without going through the prior steps. A Will alone without Probate will not give the executor the power to distribute the estate, even if its in accordance with the Will.
Preserving and maintaining estate assets
The executor has a duty to protect the assets and take opportunities that are reasonable to increase the value of an asset and avoid loss to the asset. Some examples include:
- If the deceased has funds in their bank account, ensure it is accruing interest;
- If the deceased has investment properties the executor is required to secure the property and manage the property (whether managed with the agent or not) until it is distributed; and
- If the deceased has any motor vehicles, the insurance must be maintained.