Executor of a Will: What They Do and How They Do It
No one likes to think about a loved one dying, but preparing a will and organizing one’s assets is the best way to take that burden off your loved ones and make sure they are properly cared for after you’re gone. That’s when the executor of a will comes in.
When someone who dies leaves a will (also called as a testator), there needs to be someone to make sure the terms of the will are carried out. The same is true in the case of a living will. If there is not a will, a public trustee will need administer the estate of the deceased. In some cases, there will be parties who contest the will after death. If this is happening in your case, you can call a probate lawyer who understands the probate code and helps you to probate a will.
The executor of an estate is the legal personal representative and is charged with carrying out the wishes of the deceased person. The person who becomes the executor should be someone who is trusted completely, as the executor will, in essence, be able to do everything that the deceased person could do as far as paying off creditors, selling assets and even handling lawsuits. More often than not, the surviving spouse gets nominated for this role. The spouse (or any person nominated as executor) assumes the power of attorney so that he can perform all these duties. According to estate law, an estate plan should include other details that the deceased wanted to take care of, such as how children will be cared for.
While there may be other requirements, the basic duties of an executor will always include:
- Calling in all the assets from the estate.
- Identifying and paying off all creditors and other third party liabilities.
- Identifying the beneficiaries and distributing whatever assets are left over.
What is Probate NSW?
When someone in NSW dies and leaves behind assets, those assets of the deceased, including real and personal property, are deemed vested in the NSW Trustee. This is ordered by the Probate and Administration Act. In order to gain authority to carry out his duties, the Executor may apply to the courts of NSW.
One of the duties of an executor is to apply with the Probate Court and gain Probate of the Last Will and Testament within six months of the date of death. The Executor must explain any delay to the probate judge handling the case. After obtaining Probate, the Executor, as your personal representative, will need a copy of that, a copy of the Death Certificate and other legal forms in order to carry out the duties of estate administration. They also need a power of attorney in order to officially make legal actions on your behalf.
Funeral Expenses & Arrangements
The first task of executors (also known as trusts) of a will be to make the final funeral arrangements for the deceased legally. Hopefully, the plans are clear and in written form. When loved ones try to sort out ambiguous directions, they go through needless stress. The deceased should be buried or cremated in a dignified manner, as soon as possible. The family may have input too and may like to participate in the arrangements, but the reasonable costs and expenses are to be taken from the estate monies. Although ultimately the executor can decide what happens to the deceased, the one exception is that cremation during the time of death is not allowed if the deceased has left a written directive against it.
Gathering the Assets of the Estate
1. Monetary and other assets
Assets may include real estate, bank accounts and other kinds of deceased person’s property. Any financial institutions where the deceased conducted business will need to be contacted immediately, preferably a few days after the date of death, as there are special procedures they must follow at that point. For those making a will, this should be included once you’ve started your estate planning. An estate tax return is part of the assets if the deceased will be getting money back, but a liability if the deceased owes taxes (income tax, property tax, etc) to the government.
One of the jobs of the executor is to collect other money which is owed, such as money loaned to another individual or money needs to be paid for goods or services already received. The executor has the same abilities as the original writer or the will, in that he or she can file the legal documents for a lawsuit if necessary to collect these unpaid funds or do the transfer on death.
Sometimes a living trust is prepared in advance so that assets of the estate can be held for the beneficiary while the deceased is still alive. When the living trust is established in advance, these funds will not need to go through probate and will not incur estate taxes like the other assets which must proceed through probate.
2. Business assets
If the deceased owned a business or real estate, there should be a business plan that details what to do so that someone else may take responsibility for the deceased’s responsibilities. aAn Executor is not allowed to take over the business, so if there is not an estate plan in place, the Executor should obtain a court order to ensure that the business is kept running with no interruption and with no liability to the Executor.
Sometimes the business is the most important asset of the estate, and the Executor is responsible for making sure the assets aren’t wasted while the estate goes through probate and the responsibilities at the business are assigned to other people.
Paying Off Creditors
The debts of the deceased may include any credit card with balances, outstanding loans or any other money which is owed. If the deceased operated a business, borrowed from a credit card, and received goods but did not yet paid for them, that money needs to be paid as part of settling the estate. If the deceased still owes taxes, those must be paid from the estate. If there is money owed back from taxes, the Executor of the Will can file a tax return to obtain those monies for the estate.
If the estate was not solvent, there will not be enough money to pay all the debt from an estate. In that case, the Executor is responsible for paying the correct monies in their order of priority. Anyone who has questions or need for legal advice can call a probate lawyer for help.
Distributing Final Assets to the Heirs
If there are enough assets remaining in the estate, the Executor can now dispose of the assets as specified in the will. This is usually a simple bequest to, for instance, a husband or wife.
Normally, the Executor should distribute the assets within twelve months if possible. The Executor is basically holding the assets for his or her year, and if the heirs have not received them after that they may not have a claim anymore.
Is the Executor Required to Take the Role?
A person serving as executor is not required by the probate law to accept the position. If someone names you as the Executor of an estate and you decide that you will not be able to do it for whatever reason, it is important for you to notify the Probate Court as soon as possible to make sure the necessary tasks are carried out. The probate process can take several months or more, as some tasks are not straightforward or may need to go through procedures before you can consider the process is complete.
If you have any questions about the duties that come with being an executor or about engaging a lawyer, probate fees, or need help preparing your estate, feel free to us to speak to one of our experienced probate lawyers who will be happy to assist you with legal advice.