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When a person dies they usually leave behind a Will that specifies what is to happen to their assets upon their death. The Will should also outline and determine who the executors are. The executors are persons whose role it is to secure and distribute assets of the deceased and ensure all liabilities are paid and that the terms of the Will are carried out lawfully.
An executor has many important duties when acting on behalf of the estate of the deceased person.
Determining who the beneficiaries are in a Will may not be as simple as it sounds.
The Will may contain complicated clauses that require interpretation or guidance and directions from the Supreme Court.
A Will may not dispose of the entire assets of the estate. A partial intestacy arises and beneficiaries not named in the Will may inherit.
Insurance must be maintained on certain assets during administration.
Assets may need to be moved and stored indefinitely. Executors may be liable for any financial loss caused to these assets if not stored properly.
Before a final distribution of the estate, expert valuations may be required of some assets such as jewellery, motor vehicles, art works, antiques and other unusual items.
A grant of Probate is the official recognition by the Court of the right of the personal representative named to administer the estate of a deceased person.
If there is no Will, or it has been lost or destroyed, then an administrator is required to be appointed by the Court to effect administration of the estate.
The executor will need to file taxation returns not only for the deceased but for the estate.
If complicated Testamentary Trusts are created by the Will, ongoing financial and accounting advice is critical to the lawful and effective administration of the estate.
Spouses (including domestic partners and those of the same sex), ex spouses, children, grandchildren and in certain circumstances parents, siblings and step-children may have a claim against the estate on the basis they have not been adequately provided for and are in need.
A claim must be commenced within six (6) months from the date of the grant of Probate.
The likelihood of success of any claim depends on the individual circumstances of the claimant and other persons with an interest in the estate.
An executor must act impartially towards all beneficiaries and any distribution made in advance of the 6 month time frame without protection/indemnities in place, could leave the executor personally open to financial claims in the future.
Executors are entitled to a reimbursement of out of pocket expenses they incur in carrying out their duties as an executor and a commission so as to reimburse them for their time and efforts.
If there is no amount specified by a Will, then the consent of all beneficiaries affected will be required, otherwise the commission will need to be approved by the Supreme Court.
The Supreme Court may use an indicator that is published from time to time as a guide to what commission an executor is entitled to but in summary it will depend heavily upon the actual complexity and involvement of the executor’s own personal time and effort.