What is an Executor?

An Executor is a person nominated in a Will to carry out the final wishes of a deceased person.

An Executor’s duties include, but is not limited to:

1. Locating the last Will of the deceased person and obtaining authority to administer the deceased’s estate if required. An Executor will need to apply to the Supreme Court of Western Australia for a Grant of Probate (or sometimes Letters of Administration) unless the estate is small.
2. Organising the deceased’s funeral.
3. Assuming control of all the assets of the deceased’s estate, including but not limited to any superannuation funds of the deceased person where they are payable to the estate.
4. In cases where it will take some time to administer the Deceased’s estate, safely maximising the assets, e.g., by renting our real estate on say short term lease and/or investing money in interest bearing accounts etc.
5. Paying all debts of the deceased’s estate, e.g., funeral expenses, creditors, income tax, fees, legal fees for administering the estate and obtaining probate, out-of-pocket expenses etc.
6. Once all debts have been paid, distributing the remaining assets according to the directions set out in the Will.

Personal Liability of Executors

An Executor needs to carry out their duties in accordance with the Will of the deceased person and the law.  If an Executor does not comply with these duties, they may become personally liable.  By way of example, an Executor may be personally liable for:

1. non-payment of debts of the deceased’s estate;
2. pursuing risky investments which lead to the deceased’s estate becoming insolvent; and
3. distributing the deceased’s estate after being put on notice of potential claims against the estate.

Minimising Personal Liability

Before an Executor distributes the deceased’s estate, they should consider the following to minimise their personal liability:

Advertisement to Claimants

An Executor should publish an advertisement pursuant to the Trustees Act 1962 (WA) in the Government Gazette and a local newspaper requiring claimants to provide notice of their claims within a fixed period of time.  Once this period lapses, the Executor may distribute the deceased’s estate having regard to only the claims which they have notice of at the time of distribution.

Family Provision Act Claims

If an Executor is put on notice that an application for provision under the Family Provision Act 1972 (WA) may be commenced against the deceased’s estate, they should not distribute the estate until after 6 months from the date the Executor becomes entitled to administer the estate, being the limitation period for such application.

Tax Returns

An Executor should instruct an accountant to complete any necessary income tax returns including those for the deceased person before death and those for the estate after death if the estate has earned any income above the tax-free threshold.

Passing the Accounts

Under the Non-Contentious Probate Rules 1967 (WA), an Executor is required to file their accounts relating to the deceased’s estate and a plan of distribution with the Supreme Court of Western Australia. Once the Executor has filed their accounts, the Executor is released from liability in relation to the accounts after three years.

Conclusion

Administering a deceased estate may be an overwhelming and risky task if an Executor does not carry out their duties in accordance with the Will of the deceased person and the law.

An Introductory Consultation with one of our experienced Wills and Estate lawyers can provide you with specific advice regarding your duties as an Executor and how to minimise the risk of personal liability when administering a deceased’s estate.

Should you have any queries or require any specific advice in relation to the information provided above, please feel welcome to call us on 08 6383 5551 or email re*******@tl*.law.