1. Introduction
1.1. When creating a will, you will need to include the person, or people, you would like to manage your estate when you pass away. You should name primary and secondary executors, jointly or individually.
1.2. Being executor of a will comes with a range of duties and responsibilities, it does not provide the executor with the power to do what ever they want with the estate assets.
1.3. Therefore, it is advised that when naming executor/s in your will, you confirm with the proposed executor/s that they agree to take this important role and are prepared to fulfil their duties as dictated by the relevant law and the will. Where you wish to name joint executors, you should confirm that they are happy to act in a joint capacity, and where naming substitute executors you should ensure they will be prepared to fulfil the role of executor if the primary executor/s no longer can.
1.4. The duties of an executor are very similar to those of a trustee, due to the fiduciary nature of their duties to the beneficiaries. This basically entails that the executor acts honestly and in good faith, for the interests of the beneficiaries, rather than their own. However, at the most basic level, their duty is to obey and uphold the will. Where there is no will and an administrator of an estate has been appointed, the administrator must comply with the relevant provisions of the Administration Act.
1.5. The duties of an executor include administrative duties, fiduciary duties, and trustee duties.
2. Administrative Duties
2.1. One of the first things an executor must do is locate the will as it will guide them as to how to administer the estate and will be needed for probate to be granted. This includes locating any codicils or possible informal wills. The named executor must also obtain a death certificate as this will also be required to obtain a grant of probate.
2.2. Other initial duties include carrying out the deceased’s wishes regarding organ donation, cremation/burial and funeral directions, and notifying relevant authorities and people of the death.
2.3. The executor is required to identify which assets, debts, and liabilities the deceased held, and their value, as this will form the estate. A list of these will be attached to the affidavit in filing for probate. Chasing assets, debts, and liabilities up will involve locating important documents and digital information to identify any real estate, bank accounts, superannuation and insurance, shares, personal property (i.e., jewellery and household items) or debts of the deceased.
2.4. An application for probate should be made to the Supreme Court within 2 months after the death, which will require the executor to file an affidavit and a motion for probate. The executor may wish to employ the help of a solicitor for this.
2.5. Once probate is granted, these assets and liabilities will be transferred to the executor so that they may deal with them as stipulated in the will. For this purpose, the executor is a trustee. They must do following:
(a) Discharge the liabilities of the deceased, unless there is a strong defence which may enforce the liability against the executor
(b) Collect assets
(c) Pay debts
(d) Take necessary steps to protect the estate
2.6. The executor must keep a record of the actions taken for the estate and keep all relevant documents and information. This is important because executors owe a positive duty to provide information regarding the estate to the beneficiaries and will be required to present such information to the Supreme Court if they are ordered to pass accounts, or if their actions are disputed. However, the duty to disclose information sometimes competes with executor obligations of secrecy and confidentiality.
2.7. The executor must distribute the estate to beneficiaries according to the will. Where on notice of a potential Family provision claim, the executor should not distribute or otherwise deal with estate assets until at least 6 months after probate, the time frame for Family Provision Claims.
2.8. If parts of the estate cannot be distributed, i.e., where there are beneficiaries under 18 or beneficiaries lacking capacity, the executor will need to establish trusts over the property to be held for those beneficiaries.
3. Fiduciary Duties
3.1. The fiduciary obligations of an executor may differ from those of other fiduciary relationships, as fiduciary duties vary depending on the nature of each relationship. Several established rules, which often overlap, are fundamental to follow as an executor.
3.2. Firstly, the executor must not use their position to promote their personal interest, over that of the beneficiaries, in any possible or actual conflict or matter, without informed consent. They cannot gain any benefit via these means without accounting for it.
3.3. Executors are specifically prohibited by the profit rule to gain any profits from any misuse of position they do not account for. There must be a direct relationship between the profit and the use of fiduciary position to show a breach of the rule.
3.4. This rule is related to the misappropriation rule, which prohibits the executor from misappropriating the estate for their own benefit. This does not prevent the executor being paid a commission
4. Estate Disputes
4.1. A range of disputes can arise regarding the estate. If a claimant commences a Family Provision claim, the executor must actively participate in the proceedings as the defender of the will. However, they do not need to actively defend all claims against the will. The executor does have to act in the best interests of the beneficiaries over others who may have a claim to the estate, but there may arise circumstances where it would not be in the best interests of the estate to act solely in the interests of the beneficiaries
4.2. Executors are required to obtain legal representation and evidence which will have a bearing on the matters in the proceeding, as necessary. They also have to minimise legal costs. Where the claim as to the estate is reasonable, which can be advised by the Court, this may mean the executor will need to compromise and accept this claim. However, until an order for such a claim is made, the executor’s duty to administer the estate remains to the beneficiaries and the will.
5. Failing Executor Duties/Remedies
5.1. If executor duties are breached, beneficiaries may motion to remove and replace the executor , and seek remedies to restore their position before the breach.
5.2. Beneficiaries can seek they remedy they wish, subject to the court’s discretionary considerations. They will need to demonstrate the necessary factors allowing them to claim the remedy.
5.3. Remedies available include:
(a) A constructive trust over, or an order for the return of, any traceable property or benefit that was transferred during the breach
(b) An account of profits from the executor
(c) An order for the executor to pay equitable compensation to the beneficiaries affected