What you need to know if you are an executor under a will

Who is an executor? 

An executor is the person (or persons) appointed under a will to carry out the terms of the will. Executors are often referred to in a will as trustees or personal representatives. 

Being an executor is an important role and it is essential that you are aware of the legal requirements and duties involved. 

This information is provided as a general guide about an executors’ role. Please note this is not an exhaustive list and circumstances will vary depending on the particular will, estate, property and persons involved. If you require further information on your particular situation, please seek specific legal advice. 

Funeral arrangements and costs

One of the first steps with an estate is the funeral arrangements, which are generally up to you as executor to decide. Executors are usually guided by any wishes set out in the will, together with the wishes of the immediate family. 

In most cases, the will authorises payment of all funeral costs to be paid by the estate, which is to be arranged by the executor. You need to ensure the estate has enough money to pay for the funeral and other expenses. 

If the estate is “cash poor” (for example, if the assets are tied up in property), the executor may pay the funeral expenses personally and be reimbursed from the estate later. 

The requirement for probate

As an executor you may be required to obtain probate for the will. This depends on the value of the estate assets and is required if the deceased owned land (except jointly owned land, which passes by survivorship). Some estates with minimal assets do not require probate. 

Probate is a certificate from the High Court approving the will and authorising the executor to deal with the estate assets in accordance with the will. 

The lawyer involved will prepare the necessary documents for you. The executor signs a document swearing that they will carry out his or her duties as executor. 

Listing the assets and liabilities of the deceased

You will need to compile a list of all assets and liabilities that the deceased had at the date of death. 

Assets could include property, shares, investments, bank accounts, term deposits, bonus bonds, personal items, vehicles etc. The liabilities of the deceased will include any debts owing by the deceased, mortgage payments, loans, power, phone and other every day bills and debts. 

Part of your role as executor will be to close bank accounts, pay debts and cancel power, phone and other applicable accounts. 

If you are unsure about what assets and liabilities the deceased had, we suggest you talk to the deceased’s family, lawyer or accountant. 

Keep accounts

An executor is also required to keep proper financial records and, in some cases, file tax returns. If the deceased had an accountant, we suggest you involve the accountant in this process.

The Court has the right to require financial records to be produced, so it is important these are accurate and up to date. 

Distribute the estate to the beneficiaries

An important part of your role is ensuring the assets of the estate are distributed (paid out or transferred) to the beneficiaries of the will. 

If the will includes legacies (specific gifts of cash to certain people) to be paid, these legacies are to be paid first. Once all debts and legacies have been paid, the remainder of the assets are paid to the beneficiaries as set out in the will. 

As an executor, you also need to be aware of any potential claims against the estate. As a general rule, the executor may distribute an estate six months after probate has been granted if no claims have been made. Executors should be careful if distributing before the six month period has lapsed, as they could then be held personally liable for any claims against the estate. In such cases, it may take much longer to distribute than the six month period. 

Trusts and life interests

Under the will, you may be responsible to set up a trust. A trust is required where a beneficiary of the will is under 18 years of age or mentally incapable, or if there are specific instructions to establish a trust in the will. The role of the executor is to establish the trust required by the will and oversee the administration of that trust. 

Also, if the deceased’s will grants a life interest to someone, the estate cannot be wound up until after that person dies. A life interest gives a person a right to benefit from the assets of the deceased for that person’s lifetime. 

Claims against the estate

As mentioned above, an important aspect of being an executor is being aware of and dealing with any claims against the estate. 

Depending on the circumstances, a claim could be made by a spouse, partner, children, other family members or people who are seeking to enforce a promise or gift for services. A claim must be resolved before the estate can be distributed otherwise the executor may be personally liable. 

What happens if a person dies without a will?

Where a person dies without making a will, or if the will is invalid, the rules set out in the Administration Act 1969 will apply. In this case, there is no executor automatically appointed. 

The usual situation is that the next of kin (spouse, partner, child etc) must apply to the Court for “letters of administration”. A person who is appointed as administrator has the same powers and duties as an executor. However, the assets of the estate will be distributed to beneficiaries according to the formula set out in the Administration Act 1969, rather than the will. 

General Matters

The role of executor can be time consuming and you cannot charge for your time, unless there is a specific clause confirming you can (normally for professional executors, such as lawyers or accountants). 

There are important legal requirements and duties imposed on an executor. If you require information on your particular situation, please seek legal advice. 

If you would like further information please contact Amanda Hockley on 07 958 7451.