Executor: The person appointed by a will to administer the deceased estate. The executor holds all of the assets of the deceased until they are distributed in accordance with the will.
WHAT ROLE DOES THE EXECUTOR PERFORM?
The duties of an executor are many and include:
- to supervise the funeral arrangements;
- to call in the assets of the estate: this often involves applying to the Court for permission to deal with the assets under the will and collecting all assets and debts due to the estate;
- to pay all outstanding debts: ideally this should be done within 12 months of the date of death, but the Court can allow a longer period if it is reasonable in the circumstances;
- to invest estate funds so as to earn interest whilst the estate is being administered;
- to insure the assets of the estate against fire and other risks;
- to distribute the assets in accordance with the will; and
- to arrange the completion of tax returns for both the testator and the testator’s estate.
HOW MANY EXECUTORS CAN BE APPOINTED?
It is important that at least one executor be appointed by the will. However, it is common that a back-up or alternative executor is appointed, in case one of the named executors is unable to act, or does not wish to act.
No more than four persons may apply to the Court for permission to administer the estate.
If the executors cannot agree on the administration of the will, they will need to apply to the Court for a ruling.
WHAT PERSONAL LIABILITY DOES THE EXECUTOR TAKE ON?
Once the executor has permission from the Court to deal with the estate, they must act promptly to collect all the assets and debts of the estate.
They may be held personally liable for any loss suffered through their neglect.
If the executor fails to invest the assets of the estate, they may be liable to pay the interest that would have gone to the beneficiaries had the assets been properly invested.
WHO CARRIES OUT THE EXECUTOR’S FUNCTIONS IF NO EXECUTOR IS APPOINTED?
If no executor is named in the will, it becomes necessary to apply to the Court, so that the Court can appoint someone to administer the deceased estate.
When appointing an administrator, the Court will have regard to the rights of those people who are interested in the real and personal estate of the testator.
The Court will appoint someone who has an interest in the residuary estate, but has the discretion to appoint someone else, if the circumstances warrant.
So now you understand the important role that the executor plays in regards to your will and estate, now is a great time to review your will and satisfy yourself that you have appointed the correct person and ensure that you will is current and up to date.
If you have any questions, or require any assistance, please do not hesitate to contact The Money Edge Team on 07 4151 8898.
Debbie Chapman | Wealth Team | The Money Edge | Bundaberg