Undertaking the administration of an estate can often be challenging and, in a time of bereavement, stressful.
So, you have been appointed as the executor of a deceased estate… What do you need to do?
You should ensure that the Will appointing you as executor is in fact the last Will of the deceased. If you are not sure that it is the last Will, you may have to sort through the paperwork of the deceased and make enquiries with any solicitors used by the deceased.
The first matters which you will need to deal with are to make the funeral arrangements and to ensure that the assets of the deceased are secure.
The Will of the deceased may set out instructions in relation to the funeral and burial or cremation arrangements. Funeral arrangements are often made by or in consultation with family members, but in the event of differences of opinion it is the executor who needs to make the decisions.
The executor should act quickly to identify the assets of the deceased and to safeguard and take control of those assets. The required action will include checking on insurances and notifying the insurance company if a property is now unoccupied. Financial institutions where the deceased held accounts should be notified of the death.
Accounts held solely in the name of the deceased will be frozen by the bank or other financial institution upon notification of the death. Funeral and burial expenses will still be able to be paid from those accounts, but for most financial institutions no other payments will be allowed until such time as a Grant of Probate has been obtained or the financial institutions’ requirements for release of funds without a Grant of Probate have been met.
The executor should contact creditors of the deceased and make arrangements for any required extensions of time for payment of debts. If some payments must be made immediately (for example, for insurance premiums), and all bank accounts have been frozen, then the executor or beneficiaries can choose to make loans to the estate in order to provide funds for those payments.
The deceased’s interest in joint assets will in many circumstances not form part of the deceased’s estate.
Generally, if there are joint bank accounts then, upon the death of the deceased, the account will be deemed to be owned by the surviving joint account holder. Because of this, joint bank accounts will usually be able to be continued to be operated, and not frozen, after the death of one of the account holders. Similarly, interests in real estate held with another person as joint tenants will pass “by survivorship” to the surviving owner, rather than forming part of the estate to be dealt with in accordance with the Will.
What to do once the immediate things have been handled
After you have attended to the funeral arrangements and other priority matters, and have identified the assets and liabilities of the deceased, the recommended next step is to consult a solicitor to obtain legal advice about the administration of the estate.
For the first appointment, you should bring with you the original Will (if not already held by the solicitor), the death certificate (if it has been received), and all documents which identify the assets and liabilities. In most circumstances, the solicitor’s costs will be paid from the estate, although you will be the client.
The solicitor will discuss with you the actions which will be required in order for you to carry out the deceased’s directions in accordance with his or her Will. You can decide at that time which actions will be taken by the solicitor and which actions will be taken by you personally.
The solicitor will typically attend to some notifications, to obtaining Probate, to Transmission Applications for real estate, to obtaining proceeds of accounts from financial institutions, to sales of shares, and to payments of legacies and other financial distributions to beneficiaries, while the executor will typically attend to the remaining notifications, to the making of required decisions, and to dealing with personal effects such as furniture, jewellery, clothing and collectibles.
The solicitor will identify whether it will be necessary for a Grant of Probate to be obtained. “Probate” is proof of the Will, and is the recognition by the Supreme Court of the executor’s appointment and of the last Will of the deceased. Financial institutions each have a threshold amount above which they have a requirement for a Grant of Probate to be produced in order for funds from accounts to be released.
Notification of the death of the deceased needs to be given to relevant Government departments (eg. Medicare, Veterans’ Affairs, Centrelink) and to companies and individuals with which the deceased had accounts, policies, memberships or dealings (eg. insurance companies, health benefits funds, electricity supply company). A redirection of mail to the executor will often also be appropriate.
The executor and the solicitor usually will also discuss what notifications are to be given to beneficiaries and who is to keep beneficiaries informed. It is usually more cost-effective for the executor to keep the beneficiaries informed, with the solicitor reporting just to the executor.
Under the Succession Act 1981, any beneficiary and other person mentioned in a Will is entitled to a copy of the Will following the death of the will maker.
Arrangements should be made for an accountant to prepare any required taxation returns for the deceased and any required taxation returns for the estate. The taxation advisor will also be able to make recommendations on timing for sales of CGT assets, such as shares, including sales in different financial years for the estate. It may be necessary for the executor to obtain valuations of real estate and other CGT assets as at the date of death.