Being an executor: What’s involved?

Sara has been asked by her mother, Mena, to be her executor, but she’s unsure about what’s involved. Today, Rod Cunich outlines Sara’s responsibilities in this role.

Q. Sara
My mum has asked me to be her executor but both she and I aren’t entirely clear about what this means and what I have to do. Can you explain what are my responsibilities?

A. Your will nominates one or more executors who have the responsibility of applying to the court to have your will validated and their appointment as your executor formally confirmed. This is the process referred to as ‘obtaining a Grant of Probate’. Until a Grant of Probate is obtained your executor has no legal right to deal with your assets.

The primary task of your executor is to gather your assets together, take control of them and protect them. Your executor will then hold your assets on trust until your debts are paid. Once that is done your executor’s last task is to distribute your assets in accordance with the terms of your will. While the executor controls your assets they are referred to as your ‘deceased estate’.

In many cases a deceased estate will only exist for a relatively short period of time, may be up to one year. Often, however, deceased estates will continue under the care of an executor for years. This can occur for any number of reasons:

    • if the assets in the deceased estate are complex and difficult to realise
    • if your will is challenged, in which case the executor must care for the deceased estate until the dispute is resolved
    • if one or more of the beneficiaries are still minors, their inheritance can’t be distributed to them until they reach 18 years of age or some older qualifying age set out in the will
    • occasionally wills require the executor to hold part of the deceased estate and manage it long term because a beneficiary is not capable of managing their own inheritance.

Choosing the right executor is as important as choosing your guardian and power of attorney. An executor’s role isn’t for the faint hearted. Ask anyone who has taken on the role and they’ll tell you that the duties can be difficult, stressful and time consuming. Responsibilities include applying for probate and administering and distributing your estate. In some cases (too many) it also involves fending off attacks on the estate by wannabe beneficiaries.

When deciding who to appoint as your executor, be careful to choose a capable, trustworthy person. You don’t need a professional person to act as executor (for example, a lawyer) but sometimes it’s a great advantage. Any person with mental capacity and over the age of 18 years can be appointed. This includes your children and beneficiaries.

Avoid appointing elderly people or people who live far away as your executor has to be available and handy if they are called upon to act.

Who you choose will depend on:

    • complexity: the complexity of your financial and family affairs
    • skills: the skills of the potential candidates
    • negotiating skills: the likelihood the executor will have to deal with disputes over the estate
    • impartiality: whether or not the executor will have a conflict of interest. If they manage the estate and are also a beneficiary, others in the family may perceive favouritism. If they don’t get on in any way, sharing the role of executor can almost guarantee disputes.

The most common choices are:

    • wife, husband, partner or children
    • friend or business partner
    • professional adviser: possibly a lawyer, accountant or both
    • a trustee company.

It’s preferable to have more than one executor and/or a backup executor in case one of them dies, is unable to act, or starts to act but can’t continue to do so. Alternatively, you can nominate a firm of lawyers or a trustee company, but it’s important that you enquire about their fees and charges beforehand.

Disclaimer: This information has been provided by Rod Cunich and should be considered general in nature. Seek legal advice before acting on this information.

Rod Cunich is a lawyer with more than 30 years of experience.