The Role of an Executor: What You Need to Know Before Appointing One

21 Aug

One of the important decisions you'll make when creating your estate plan is choosing the person, or people, who will be responsible for administering your estate after you die.

This person is known as your executor.

Your executor may need to deal with your assets, debts, legal and financial paperwork, tax obligations, and the distribution of your estate to your beneficiaries. Depending on the complexity of your estate, the role can involve a significant amount of time and responsibility.

Before appointing someone, it's worth understanding what the role involves and whether the person you've chosen is likely to be the right fit.

1. What is an Executor?

An executor is the person you appoint in your Will to administer your deceased estate.

Their role is to carry out the administration of your estate in accordance with your Will and their legal obligations.

Depending on your circumstances, this may involve:

locating and securing your assets
identifying and dealing with your debts and liabilities
applying for a Grant of Probate, if required
managing estate assets during the administration period
obtaining legal, financial, taxation, or other professional advice where needed
dealing with claims or disputes involving the estate
keeping appropriate records and accounts
distributing the estate to your beneficiaries.

The same person may also act as the trustee of a testamentary trust created under your Will. In that situation, their responsibilities may continue after the initial administration of your estate has been completed.

Being an executor is a legal role with significant responsibilities. The complexity of the job will depend on your estate, your Will, the assets you own, and any issues that arise during the administration.

2. What Does an Executor Actually Do?

Every estate is different, so an executor's responsibilities will vary. Some estates can be relatively straightforward, while others involve complex assets, businesses, trusts, family conflict, or legal claims.

Here are some of the things an executor may need to do.

Locating the Will and important documents

Your executor will need to locate your most recent Will and identify important information relating to your estate.

This may include information about your:

bank accounts
property
superannuation and insurance
investments
businesses
debts and liabilities.

You can make life much easier for your executor by ensuring they know where your Will is stored and how it can be accessed.

A Letter of Wishes can also help keep important information in one place. The more organised your records are, the less time your executor may need to spend trying to work out what assets and liabilities you had.

Applying for Probate, if required

Not every estate requires a Grant of Probate.

Whether probate is required will depend on the assets in your estate and the requirements of the organisations holding those assets.

If a Grant of Probate is required, the executor named in your Will may need to apply to the Supreme Court of Queensland. A Grant of Probate provides formal recognition of the executor's authority to deal with the estate and may be required before certain assets can be collected, transferred, or sold.

It is a good idea for an executor to obtain legal advice before taking significant steps in the administration of an estate, particularly where probate may be required.

Identifying and protecting estate assets

An executor will need to identify the assets forming part of the estate and take reasonable steps to protect them during the administration process.

Depending on the circumstances, this may involve:

contacting banks and financial institutions
dealing with real estate
arranging or checking insurance
securing personal property
obtaining information about investments or business interests
arranging valuations where appropriate.

The steps required will depend on the nature of the estate.

Paying debts and dealing with liabilities

Before distributing the estate, the executor will need to consider the estate's debts, liabilities, and other obligations.

These may include:

funeral expenses
outstanding loans or credit accounts
taxes
expenses associated with estate assets
legal or professional costs.

Executors should be careful about distributing estate assets too early. In some circumstances, an executor may face personal liability if they distribute assets without properly addressing the estate's debts, liabilities, or claims.

Obtaining legal advice before making distributions can be an important part of protecting both the estate and the executor.

Managing assets during the administration

Some estate assets need to be managed while the estate is being administered.

For example, the estate may include a rental property, a business interest, investments, or other assets that require ongoing attention.

The executor may need to arrange for those assets to be managed, maintained, sold, or transferred. They may also need professional assistance depending on the circumstances.

Dealing with tax and financial obligations

The executor may need to deal with outstanding tax matters and other financial obligations.

The exact requirements will depend on the circumstances of the deceased and the estate. A final individual tax return may be required, and the estate itself may also have taxation obligations.

Executors should obtain accounting or taxation advice where appropriate.

Dealing with claims or disputes

3. What Should You Consider When Choosing an Executor?

There is no single right person to appoint as an executor.

The best choice will depend on your family, your estate, and the type of person you trust to take on the responsibility.

Here are some things to consider.

Trustworthiness

Your executor may have control over significant assets and access to sensitive financial information.

Choose someone you trust to act responsibly and carry out their role properly.

This could be a family member, friend, lawyer, accountant, or another appropriate person.

Willingness to take on the role

Being an executor can take time and effort.

Have a conversation with the person you're considering appointing so they understand what the role may involve and can tell you whether they are comfortable taking it on.

You don't need to expect them to have all the answers. A good executor should know when to ask for legal, accounting, taxation, or other professional advice.

Their ability to manage the responsibility

Your executor doesn't need to be a lawyer, accountant, or financial expert.

They do, however, need to be capable of managing the responsibilities of the role or seeking appropriate help when needed.

Consider whether they are organised, responsible, able to communicate effectively, and likely to deal appropriately with paperwork, professionals, and beneficiaries.

Their age and circumstances

Think about whether the person is likely to be able to take on the role when the time comes.

Circumstances can change. A person who is the obvious choice today may not be the best choice in ten or twenty years.

This is one reason why appointing an alternate executor can be helpful.

Their location

Your executor does not necessarily need to live near you.

However, an executor who lives interstate or overseas may face additional practical challenges when dealing with Australian assets and documents.

Depending on the circumstances, this can lead to additional costs, delays, or legal and taxation considerations. If you are considering appointing someone who lives overseas, discuss this with your estate planning lawyer.

Their relationship with your beneficiaries

Your executor may need to communicate with your beneficiaries throughout the administration process.

This does not mean you need to choose someone who is equally close to everyone involved. In fact, executors are often beneficiaries themselves.

What matters is whether the person is likely to take their responsibilities seriously and administer the estate appropriately, even where family relationships are complicated.

4. Can an Executor Also Be a Beneficiary?

Yes.

It is common for an executor to also be a beneficiary under the Will.

For example, a person may appoint their spouse as executor and leave the majority of their estate to them.

An executor still has legal obligations when administering the estate, even if they are also entitled to receive part of it.

5. Should You Appoint More Than One Executor?

You can appoint more than one executor.

You might choose to appoint two people to act together, particularly where your estate is complex or where you want two people involved in major decisions.

There can also be practical benefits to having more than one executor available. However, appointing multiple executors can sometimes make administration more complicated, particularly if the executors disagree or live in different locations.

Another option is to appoint an alternate executor who can step in if your first choice is unable or unwilling to act.

The right approach will depend on your circumstances.

6. Appointing a Backup Executor

It is a good idea to consider what will happen if your first choice cannot act.

Your chosen executor may die before you, lose capacity, become unwell, or simply decide they do not want to take on the role when the time comes.

Appointing an alternate executor can provide a clear backup plan and reduce the risk of unnecessary complications.

Your Will can set out who you would like to take on the role if your first choice is unable or unwilling to do so.

7. How Can You Make Life Easier for Your Executor?

Once you've chosen your executor, there are practical things you can do now to make their job easier later.

Keep important information organised

Make sure your important documents and information can be located when needed.

This may include details about your:

assets
debts
insurance
superannuation
business interests
advisors
important personal documents.

Let them know where your Will is stored

A Will is not particularly helpful if nobody can find it.

Let your executor, or another trusted person, know where the original Will is stored and how it can be accessed.

If it is stored in a safe, secure cupboard, or another locked location, make sure appropriate arrangements are in place for it to be accessed when needed.

Record important information in writing

A Letter of Wishes can provide your executor with useful guidance and information that does not necessarily belong in your Will.

Depending on your circumstances, this may include information about your family, assets, personal wishes, or other matters you would like your executor or trustee to understand.

A written record can also reduce the risk of information being forgotten or misunderstood over time.

You can read more about the differences between a Will and a Letter of Wishes.

Review your estate plan

Your choice of executor should be reviewed as part of your regular estate plan reviews.

A change in your relationship, family circumstances, health, financial position, or the circumstances of your chosen executor may mean that your appointment is no longer appropriate.

Choosing the Right Executor for Your Estate

Choosing an executor is an important part of creating your estate plan.

The right person does not need to have all the answers or know everything about estate administration. They need to be someone you trust to take the role seriously and seek appropriate advice when needed.

Before finalising your Will, think carefully about who you would want managing your estate and have a conversation with them about the role.

If you need advice about choosing an executor or creating an estate plan that reflects your circumstances, we can help you create an estate plan that gives you confidence about what will happen when you're no longer here.

Saara Lemmetty