Rafton Family Lawyers have specialised teams at Penrith, Parramatta and Richmond in the Hawkesbury/Western Sydney region that can help when administering estates and dealing with executors.
What Is An Executor
An executor is the person who is appointed in a valid will to carry out the wishes and effectively help to administer the estate after a person passes away. The executor is tasked with the job of looking at all of the assets of the deceased person, paying out any liabilities and determining the liabilities of the whole estate and then distributing the estate to each of the beneficiaries who are clearly set out in the will of the deceased.
The executor has a number of other functions and they also should be tasked with arranging a funeral, cremation or burial for the deceased as well as locating the deceased’s will and providing an original copy of the death certificate. The executor will generally approach a lawyer and we often help clients at our offices of Rafton Family Lawyers to apply for Probate in accordance with the deceased’s will through the Supreme Court of NSW. An important task of any executor is also defending any legal proceedings or applications that may come about when contesting the will of the person who has died.
What Happens When An Executor Does Not Behave Or Is “Naughty”
There is a generally well accepted rule that sets out that an executor has approximately one year in which to administer their duties as an acceptable time frame for estate administration. This includes making arrangements to ensure the beneficiaries receive payments in accordance with the will.
In some circumstances the task of applying to the court and dealing with any applications can slow things quite considerably and there can also often be a long period of time in determining any debts or liabilities of the estate. However, the general rule of thumb is that one year is normally the only time required to finalise administration of the estate and then distribute funds to beneficiaries.
Overall, if a beneficiary under a will is concerned that an executor is not taking steps to distribute the estate assets within the executors year, then they can correspond with the executor to ask for a reason for this unacceptable delay. There is then an onus on the executor to explain the reason for the delay and in the absence of a valid reason the beneficiary may request that the executor be liable for compensation to the beneficiaries as a result of the delay.
Some Of The Important Obligations Towards Beneficiaries That Executors Have
The executor has a very important obligation to all beneficiaries. In some situations the executor is also a beneficiary themselves, and in other situations the executor is not a beneficiary and could be a professional person who would be entitled to charge funds for administration of the estate. There are a number of obligations and this list is not exhaustive:
- They must act personally as an executor and obtain professional assistance as is required.
- They must not put their own needs above those of the obligations as executor and towards the beneficiaries and this is what is known as a fiduciary relationship which is a relationship of trust.
- They must preserve the estate for the benefit of the beneficiaries and try to ensure where possible there is no wastage.
- They must not act in their own interest at any time to prejudice or disadvantage any of the beneficiaries even if there is a personal conflict.
- They have to be mindful that there is approximately one year to administer the estate and be prepared to provide a valid reason if there is an excessive delay.
- If they are realising assets of the estate, they must ensure that they at all times obtain the best possible price and where required obtain valuations of any assets in dispute.
- They must avoid delay in the realisation or investment of the estate assets so that this would mean a prompt listing of assets for sale and where necessary avoiding consequential taxes or duties.
- They must act efficiently and with sufficient speed so as not to incur unnecessary costs to the estate.
- They must keep a proper account and retain all original receipts including for payments for things such as funeral expenses, professional and legal advice.
- They must be aware of the statutory powers of investment and duties which are set out in the Trustee Act.
- They must at all times keep in mind that there can be an interim distribution to beneficiaries if there is a complex issue or delay in the administration of the estate.
Can I Remove An Executor For Behaving Badly?
Generally speaking, circumstances can sometimes arise that make it appropriate to apply for an application to remove or pass over an executor. As a general rule any person over the age of 18 could be appointed by a person as an executor in their will and they subsequently would then be entitled to apply for and obtain the grant of probate after the will maker dies.
There are some circumstances which immediately make it appropriate to remove a person as an executor. This would be:
- Where they have committed some serious crime or are currently in prison after the making of the will.
- Where they have neglected or failed to take steps to apply for Probate and neglected their duties as an executor.
- Where they have misappropriated assets or used funds for their own benefit or otherwise interfered with the estate.
- If they cannot be located or have been overseas and unable to deal with the estate in the proper jurisdiction.
- Where they have already died or are of very ill health or not of sound mind.
As a general rule an executor would not be removed simply because a beneficiary does not like an executor. The starting point in most court applications to remove an executor is that the court would consider that the person who drafted a will and appointed an executor held a view at that time that the person was competent.
If an executor needs to be relieved of their duties before applying for Probate, this is known as “passing over”. This is done via the Probate & Administration Act. It effectively means that the executor is removed before they have any chance to act legally in the matter.
If they are removed and probate has already been granted it is necessary to firstly revoke the grant of probate to bring their executor duties to an end and then make a fresh application appointing a new executor. Any interested party can apply to the court such as a beneficiary or a fellow executor to have an executor passed over or removed.
Have You Been Treated Unfairly Or Do You Think You Have Been Left Out Of A Will? (Solicitors And Contested Estates)
At Rafton Family Lawyers we frequently provide advice and assistance to persons who feel that they have been treated unfairly or in many situations have been completely removed from a will by a will maker that they feel should have made provision for them. Every person as a general principle has a right to draft a will and make a will that leaves their property to whom ever they choose. However, in NSW which is the main jurisdiction in which we represent clients in this area, there is provision in the Succession Act 2006 (NSW) that can allow people to make a claim against the estate if they feel they have been left out or treated unfairly in the amount of funds or their benefits pursuant to a will.
We frequently represent clients in cases where they have been:
- Excluded all together
- In some circumstances do not feel that they have received their full entitlement
Under the Succession Act there are several issues that first need to be taken into account before further action can be taken against the estate and some of the pre requisites for eligible person is:
- A spouse of the deceased at the time of death
- A person who is living in a de facto relationship
- A child of the deceased
- A former spouse of the deceased
- A person who has at any time been wholly or partly dependent on the deceased person and is a grandchild of the
- deceased person or was at any time a member of the household of the deceased person
- A person with whom the deceased was living in a close personal relationship
In the above categories points (a) being the spouse, (b) the defacto or (c) a child automatically has a position of right and can make an application after carefully considering the likely outcome of success. However, in the prevailing categories which are a former spouse, a dependent person or a close personal relationship there are a number of factors that would need to be in existence before an application is filed and this may include the character and conduct and financial situation of each of the parties.
It is also very important to note that there is a time limit in which to bring an application of 12 months from the date of death of the deceased person. An application can still be made if the executor has distributed the estate however its important to note that it is preferable that the application is made prior to that time.
The court is able to make orders relating to any notional property of the deceased which often involves things such as superannuation or life insurance that has been transferred up to three years prior to the date of death of the person that actually made the will. We note at Rafton Family Lawyers we frequently provide assistance and advice in this area to our clients to assist them in respect to navigating their way through contesting an estate where they feel they have been treated unfairly.
Our team at Penrith, Richmond and Parramatta are able to provide that advice and assistance.