One of the most important decisions when planning your estate is who your executor should be.
What is an executor?
An executor is an important role in your will. The person you choose as your executor handles all of your personal, business and financial affairs on your death. Their role is to respect your wishes and distribute your assets as outlined in your will.
How do I know who to choose?
Anyone that is over 18 can undertake the role.
It could be a spouse, child, a parent, or friend. You could even choose a professional such as an accountant or solicitor.
You should choose someone who you feel will be able to handle the role. Understandably, handling the estate of your loved one is an emotional time. If your estate is complex with numerous assets, you need to ensure they will not get overwhelmed with the task.
If the executor is not doing their job the court can remove them as the executor of your estate.
It’s a good idea to speak with the person you appoint as your executor. They should be aware of:
1. Where the will is held and who to contact;
2. Any burial wishes or instructions;
3. Where your important documents are stored, such as bank statements;
4. What your assets are, such as real estate and shares; and
5. Any possible problems that may arise, such as tension in the family.
When does an executor’s role commence?
The role commences upon the death of the will maker.
In most cases your executor will need to appoint the services of a solicitor. The solicitor will require a list of assets and liabilities to handle the estate. Your executor will be responsible for supplying this information as well as signing any required documentation.
Applying for Probate
If you own real estate or have a substantial sum held in a bank account, a grant of probate may be required.
This process can be time consuming. Gathering information from asset holders can take months. Once an application is made to the Supreme Court of NSW it can take between 4-8 weeks to receive probate.
Once probate is granted your executor becomes the legal personal representative of your estate. This gives your executor the power to deal with your assets and liabilities in accordance with the directions in your will. If they do not follow the directions in your will, they can be held accountable.
Can my executor sell my house?
In many situations, your house will need to be sold.
Sometimes a house may be mortgaged and the house will need to be sold to clear the liability. For this to happen, a grant of probate is required.
Once the property is sold, all debts are paid off with the net proceeds. Any funds remaining will be handled as part of your estate and distributed to your nominated beneficiaries.
A beneficiary is a person (or person/s) you name in your will to receive a gift or part of your estate. The executor does not need to be named as a beneficiary.
When does the role of an executor end?
Usually, the role is finalised once all debts are paid and all assets are disbursed in accordance with your will.
However, sometimes the executor may also have the role of acting as a trustee of a beneficiary under your will. This means they will look after estate assets until a beneficiary reaches a certain age, usually 18 or 21.
What happens of a claim is made on my estate?
Unfortunately some estates do receive claims, such as family provisions claims. This does mean extra work for your executor and the acting solicitor. Often, your executor will need to act as mediator to resolve disputes between beneficiaries or other family members.
Being named as an executor is a privilege.
It is important to review your will every few years to ensure your executor is still capable of acting on your behalf upon your death.
If you’d like to discuss your will, contact us!