What is an executor and who should you appoint?
Two very commonly asked questions are “what is an executor?” and “who should I appoint?”. The answer to “who should I appoint” will depend on the complexity of your estate. The person you choose will need to be capable of carrying out your wishes in accordance with your Will and it would be preferable to have your executor based in NSW as an executor’s role will involve undertaking many tasks around your home and require execution of documents in offices located in NSW.
What is an executor?
When preparing your Will, you need to nominate a person or persons who you wish to appoint as your executor/s to carry out the terms of your Will. This is the person who will deal with your estate on your death. In simple terms, your executor is the person who will, generally speaking, locate your Will and other essential paperwork, engage a solicitor to assist if Probate is required, ensure that your assets and possessions go where you intended them to go in accordance with your Will and ensure any debts owing are paid.
Consideration should be given to the complexity of your estate, whether there is a possibility of your Will being contested or any potential on-going trusts that will need to be maintained over many years.
Some of the responsibilities of your executor will be:
- locating your Will;
- making funeral arrangements;
- keeping beneficiaries up to date;
- notifying government agencies, utilities, financial institutions;
- finding out what assets you held and any debts you owed. Making an inventory of personal and household effects, cash, business interests, real estate and securities (whether in NSW or outside);
- preparing all necessary documents required to apply to the Supreme Court for a grant of probate;
- preparing accounts and tax information for beneficiaries; and
- liquidating assets ensuring that all liabilities and expenses have been dealt with, paying any legacies, transferring specific gifts, establishing any ongoing trusts and transferring or paying any remaining assets to the residuary beneficiaries.
Substitute executors
It is a great idea to appoint a substitute executor or executors should the named executor be unable or unwilling to act. If there is no substitute executor, the Court will appoint a person as “administrator”. A beneficiary under the Will is the most common applicant to this role or a legal guardian of a beneficiary who is under the age of 18.
Capacity and renunciation of executor
Minor
Where the appointed executors include a minor, probate will be granted to all but the minor person as that minor will not be entitled to a grant. Leave from the Court will be reserved to the minor to apply for probate upon reaching the age of 18. If a minor has been appointed solely, the Court may grant “administration with the Will annexed” to the guardian of the minor or such other person as the Court thinks fit until the time the minor attains the age of 18.
Mentally or physically disabled persons
The Courts may “pass over” an appointed executor where it is considered that the executor’s mental or physical incapacity is such that he or she cannot reasonably be expected to be capable of carrying out the role. In a situation where a sole executor is unable to act as an executor, the Court will, in legal terms, “grant administration with the Will annexed” which will provide the administrator authority to administer the estate in accordance with the Will.
Renunciation
A person who is appointed as an executor is under no obligation to act and may renounce the right to the role however, once they have accepted this role, they cannot renounce. Acceptance of the role must be unconditional. An executor is taken to have accepted the role when his or her conduct is such that the intention to accept the role is evident for example, advertising for probate or discharging a debt etc. A valid renunciation must be lodged with the Court.
Do executors get paid?
Executors generally only get paid for carrying out their role if the Will specifically stated so. However, the executor does have the right to apply to the Supreme Court for commission for their “pains and trouble”. The Court will usually not award an executor any payment if the executor is also a beneficiary under the Will.
Takeaway message
Careful thought should be given to choosing an executor to ensure they are up to the complete role (and preferably will have a good relationship with beneficiaries) but you can rest assured, your solicitor can guide your executor through every stage including:
- informing them of their rights and responsibilities;
- completing the forms applying for Probate;
- identifying and collecting the assets of the estate;
- advising on the right order to pay debts and distribute assets; and
- resolving any potential claims against the estate.
If you have any questions regarding an estate or require assistance in preparing your Will or your application for probate of the Will, please contact Gillian Kirwan directly on 02 8226 7321.