Introduction
When you write a will, one of the most important decisions you’ll make is choosing an executor—the person who will manage your estate after you pass away.
But what exactly does an executor do? What are their responsibilities? And how much work is involved?
At Oakhill Lawyers in Carlton, we help people understand executor roles and responsibilities so they can make informed choices. Here’s everything you need to know.
What Is an Executor?
An executor is the person you name in your will to:
– Manage your estate after you die
– Carry out your wishes as expressed in the will
– Distribute your assets to beneficiaries
– Handle all the legal and financial matters involved
Think of an executor as the administrator and caretaker of your estate. They’re responsible for taking your instructions from your will and making them happen.
Key Responsibilities of an Executor
Responsibility 1: Obtain a Grant of Probate
The first formal step is obtaining a Grant of Probate from the Supreme Court of Victoria.
What this means:
– Apply to the court to prove the will is valid
– The court issues a “grant” that gives you legal authority to manage the estate
– Without this, financial institutions won’t release funds or transfer assets
Who needs it:
– Required if there is property or a refundable accommodation deposit (RAD) and usually required if there are significant assets in the estate (eg. funds in a bank account that exceed $50,000)
– May not be needed for small estates (under certain thresholds)
Executor’s role:
– Organise the funeral
– Arrange legal help to apply for probate
– Gather necessary documents
– secure the assets of the estate – eg. maintain insurance
– distribute the estate to the beneficiaries in the will
– keep proper records
Timeline: Typically the process to obtain a grant of probate takes 6-8 weeks, depending on complexity. It is necessary to obtain the death certificate, original will, details of the estate, advertise the application for at least 14 days and then file the court application documents. The administration of the estate can then take 2 or more months as it is necessary to obtain the assets ready for distribution. This may involve selling property, shares and closing bank accounts.
Responsibility 2: Locate and Secure Assets
The executor must find and protect all the deceased person’s assets:
What this includes:
– Real estate (houses, land, investment properties)
– Bank accounts and savings
– Shares and investments
– Superannuation
– Personal belongings (jewelry, cars, collections)
– Business interests
– Digital assets (online accounts, cryptocurrencies)
What the executor must do:
– Search for financial accounts (banks, investment firms)
– Locate titles and deeds for property
– Notify financial institutions of the death
– Take steps to secure assets (close online accounts, arrange insurance, etc.)
Challenges:
– Some assets are “hidden” (bank accounts in other states or countries)
– Digital assets can be difficult to access
– Not all family members may know about all assets
Responsibility 3: Notify Creditors and Settle Debts
The executor must identify and pay any debts the deceased owed:
Common debts include:
– Mortgages
– Personal loans
– Credit cards
– Council rates and utilities (up to date of death)
– Funeral expenses
– Tax debts
What the executor must do:
– Investigate any claims
– Pay legitimate debts from the estate
– Keep records of all payments
Why this matters:
– Paying debts ensures the estate is settled properly
– Protects beneficiaries from later claims
Responsibility 4: Handle Tax Matters
Executors must ensure all tax obligations are met:
Tax issues that arise:
– Final income tax return for the deceased (for the year they died)
– Capital gains tax if investments are sold
– Estate income tax if the estate generates income while being administered
– Superannuation death benefits taxation
– Potential duty/tax on transfers
What the executor must do:
– Lodge final tax return
– Pay any tax owing
– Claim tax refunds
– Keep records for tax purposes
Important: Tax can be complex. Most executors work with accountants on this. Oakhill Layers can assist by providing hte accountant with all relevant documents and information to enable the tax returns to be prepared in a timely manner.
Responsibility 5: Manage Estate Assets
While the estate is being administered (which can take months or years), the executor must:
For property:
– Maintain the property (repairs, insurance, council rates)
– Arrange sale if property will be sold
– Handle rental income if applicable
For investments:
– Monitor share portfolios
– Make decisions about selling, holding, or reinvesting
– Manage income from investments
For bank accounts:
– Keep funds in estate account
– Invest conservatively (not taking unnecessary risks)
– Manage cash flow to pay debts and expenses
Key principle: Executors must be prudent and not take unnecessary risks with estate assets.
Responsibility 6: Distribute Assets to Beneficiaries
Once debts are paid and taxes are settled, the executor distributes the estate according to the will:
What this involves:
– Preparing detailed accounting of all estate transactions
– Determining exactly what each beneficiary receives
– Arranging transfer of assets (property, money, items)
– Getting beneficiaries to sign releases (confirming they’ve received their share)
Timing: This typically happens 6-12 months after death, once debts and taxes are cleared.
Challenges:
– If some assets need to be sold to distribute equally
– If beneficiaries disagree about distribution
– If some beneficiaries are hard to locate.
Responsibility 7: Keep Detailed Records
Throughout the process, the executor must:
Maintain records of:
– All assets discovered
– All debts paid
– All expenses
– All income
– All distributions to beneficiaries
– All transactions and their dates
Why this matters:
– Beneficiaries can request a full accounting
– If disputes arise, records prove proper administration
– Tax authorities may require documentation
– It protects the executor from liability claims
How Long Does It Take?
Simple estates: 3-6 months
Average estates: 6-12 months
Complex estates: 1-3 years
Factors that extend timelines:
– Property needs to be sold
– Family disputes over the will
– Complex asset structures
– Superannuation complications
– Multiple jurisdictions involved
– Will challenges
Who Should You Choose as Executor?
Good executor candidates:
– Someone you trust completely
– Someone who is organised and detail-oriented
– Someone who is willing to take on the responsibility
– Someone local (to make regular tasks easier)
– Someone with integrity (they’ll have access to sensitive financial information)
Common choices:
– Adult child
– Spouse or partner
– Trusted friend
– Professional executor (lawyer, trust company, accountant)
– Combination (two executors, one family member and one professional)
Important: Ask the person first. Being an executor is a significant responsibility, and they should agree to the role before you appoint them.
Executor Compensation
Can an executor charge a fee?
Yes. Under Victorian law, an executor can claim commission as compensation for their pains and troubles. This can be up to 5% but depends on the complexity and is more commonly 1-3% of hte corpus. All beneficiaries will need to agree on the commission after being independently advised. Otherwise the executor can apply to the court for commission.
If the will includes a charging clause then this alleviates the need for the executor to make a claim for commission.
Is the fee always charged?
No. Many people don’t charge:
– Family members often don’t charge to administer a family estate
– Small estates may have minimal work
– Spouses often don’t charge
Should you discuss this upfront?
Absolutely. Include it in your will or discuss it with your chosen executor beforehand to avoid surprises or conflicts.
When to Get Legal Help
You should consult a lawyer about executor matters if:
– You’re writing your will and need to understand executor options
– You’ve been appointed as executor and aren’t sure where to start
– The estate is complex (multiple properties, trusts, business interests)
– There are family disagreements about the will or administration
– You need to apply for probate
– You’re unsure about tax obligations
– You need to sell property or manage investments
– Beneficiaries are making unreasonable demands
Real Example: Executor Responsibilities in Action
Scenario: Margaret dies, leaving an estate with:
– House valued at $600,000
– Bank savings of $200,000
– Shares worth $150,000
– Car worth $25,000
– Mortgage of $100,000
– Outstanding medical bills of $5,000
– Will naming her adult daughter as executor
What the daughter must do:
- Obtain probate ($300-500 in court fees; 4-6 weeks)
- Locate and secure assets: Find house deed, access bank accounts, transfer share registry, secure car
- Notify creditors: Advertise for creditors, identify mortgage lender and medical providers
- Pay debts out of estate assets: Pay $100,000 mortgage and $5,000 medical bills
- Manage property: Maintain property, arrange insurance, eventually arrange sale
- Handle taxes: Lodge final tax return, handle capital gains tax if shares sold
- Calculate distribution: After debts, taxes, and expenses, determine what beneficiaries receive
- Distribute: Transfer house or funds, distribute remaining assets
- Keep records: Document everything for 6-12 months
Time commitment: 5-10 hours per month for 8-12 months (more if professional help is hired)
Key Takeaways
An executor is critical. Choose someone trustworthy and capable
- It’s a significant responsibility. Don’t underestimate the time and effort
- It’s okay to get help. Hire professionals for legal, tax, and accounting matters
- Clear instructions help. A detailed will makes an executor’s job easier
- The role is defined by law. Executors have legal duties and must follow them
Ready to Discuss Your Estate Planning?
If you’re writing a will or been appointed as executor, contact Oakhill Lawyers in Carlton.
We can help you:
– Write or update your will with clear executor provisions
– Understand your executor responsibilities
– Get assistance with estate administration
– Navigate complex estate issues
Call Clare: 0421 656 662
Email: clare@oakhilllawyers.com.au
We’re available in Carlton, Rosanna, or we can come to you.
About Oakhill Lawyers
Based in Carlton, Oakhill Lawyers specialises in estate planning and deceased estate administration throughout Melbourne. We’re committed to making complex matters understandable and manageable.
