Executors of an estate can be required to provide the following services themselves or to arrange the relevant professionals.
- Notify the beneficiaries – When a person dies, the executor locates the Will and contacts the beneficiaries and any relevant business associates.
- Look after the estate – The executor ensures that all assets, including property and investments, are safe and arranges insurance protection when needed. The immediate needs of the beneficiaries must also be assessed to ensure that they don’t suffer any unnecessary financial hardship.
- Value the estate – The executor must identify and account for all assets and liabilities. Each item requires written confirmation from banks, financial institutions, insurance companies, share registers, titles office and creditors etc. The value of assets must be ascertained, often by obtaining valuations from licenced valuers or estimates from recognised sources.
- Obtain authority to administer the estate – Before an estate can be administered, the executor must apply to the Supreme Court for the authority to deal with the deceased’s estate. This is referred to as obtaining ‘probate of the Will’.
- Complete income tax returns – Before an estate can be distributed, it is necessary to obtain a clearance from the Australian Taxation Office. This means that the executor has to give details of all income earned during the current financial year and past years, if the deceased failed to lodge a return. In many cases, the calculation of capital gains tax is involved.
- Pay all debts – Creditors, funeral expenses, income tax, fees for administering the estate and out-of-pocket expenses must all be paid. This often requires the executor to sell some assets. Beneficiaries may choose to provide funds to cover these expenses to keep the assets of the estate intact.
- Divide the estate – When all debts have been paid, the executor is free to distribute the remaining assets according to the directions laid out in the Will.
- Establish trusts – Executors are responsible for setting up trusts for beneficiaries, for example, if the beneficiary is under 18 years of age or mentally incapable, or if there are specific instructions in the Will. Such trusts need ongoing administration, often over many years.