After a relative or close friend dies, many people are surprised to find out that they have been appointed as the executor of the estate. Often, the new executor will have had no previous experience in the role or even have a basic understanding of what the role entails.
The information in this article is aimed at providing an introductory background to the role and responsibilities of an executor under a Will.
In short, an executor is the person nominated under a Will, who is responsible for seeing that the terms of the Will are carried out.
It is the executor’s role to collect the assets of the deceased, pay the debts and distribute the estate to the beneficiaries under the Will.
While this may sound rather simple on the surface, it can be quite a complex and time consuming process.
As each estate is different, the actions required by the executor will vary. However, as a general guide most executors will be required to perform the following tasks in fulfilling their duties:
In addition to these general tasks, an executor will have a duty to the beneficiaries to administer the estate diligently and in accordance with the provisions of the Will. If an executor does not act diligently, the beneficiaries may complain to the Court. This is the only right of a beneficiary before distribution, as the beneficiary does not own the property until the executor distributes the estate.
It is not uncommon for the deceased to specifically state in their Will that their executor receive remuneration for the work involved in administering the estate. However, while this is a perfectly acceptable practice in the right circumstances, beneficiaries can often become disgruntled very quickly where an executor receives a benefit from the estate.
As the executor is in charge of distributing the assets, they are effectively authorising the payment to themselves. In circumstances where there is little transparency between the executor and beneficiaries during the administration of the estate, the beneficiaries can often become suspicious that the executor is abusing their power and overpaying themselves for their work – and in turn reducing the ultimate benefit the beneficiaries receive from the estate.
It is therefore important that executors tread carefully in these situations, and should always seek professional advice from a lawyer.
An executor that is named in a person’s Will does not have to accept the office of an executor.
The executor can renounce their position and the Will is read without that executor. If a person is appointed as a trustee and an executor then they can renounce both, just the trustee position or just the executor position.
An executor can also renounce their position after they have accepted their office by making an application to the Probate Registry. An executor may withdraw their renunciation at any time before the application for probate is filed with the Probate Registry.
Yes, an executor can be personally liable if they use the assets of the estate to pay their own liabilities, do not administer the estate according to the Will or breach any trust created by the Will.
An executor may also be liable if they are appointed as a trustee in accordance with the Will, if any beneficiary is dissatisfied with their performance as trustee.
If an executor breaches their duties an action can be bought against them in the Supreme Court.
There are no two ways about it, being an executor is likely to be a laborious, time consuming and stressful task. So why would anybody willingly take on the role?
In most circumstances, an executor will be someone close to the deceased, who they trust to sort out their affairs following their death. As such, there is a certain level of honour attached to the position. However, outside of that there is no overly compelling answer other than the simple fact that someone has to do it.
Regardless, it is very important to have a clear idea of exactly what the role entails before formally accepting the position of executor.
This communication provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Should you wish to discuss any matter raised in this report, or what it means for you, your business or your clients' businesses, please feel free to contact us.