Accepting the Role: Rights and Responsibilities
An executor is the person named in a will to administer the estate of the deceased. The role begins at the date of death – not at the grant of Probate – and the duties involved can extend for months or even years depending on the complexity of the estate. Before accepting the role, it is important to understand that an executor has a legal duty to act in the interests of the beneficiaries as a whole, to preserve and protect estate assets, to pay all debts and liabilities of the estate, and to distribute the remaining estate in accordance with the terms of the will. An executor who fails to fulfil these duties may be personally liable to the beneficiaries – and in some cases, to creditors of the estate.
An executor is entitled to renounce the appointment, provided they have not already intermeddled in the estate (that is, taken steps to administer it). Renunciation must be done formally and at an early stage. It is not possible to renounce after you have begun the administration process. If you are named as executor and have concerns about your ability or willingness to act, you should seek legal advice promptly about whether renunciation or the appointment of a professional administrator might be more appropriate.
Obtaining a Grant of Probate
Probate is the formal legal recognition by the Supreme Court that a will is valid and that the executor has authority to administer the estate. In South Australia, a grant of Probate is not required in every case – for example, where the estate consists only of jointly held assets that pass automatically to the survivor, or where the estate is small enough that institutions will release assets without formal proof of authority. However, most estates that include real property in the deceased's sole name, significant financial accounts, or listed shares will require a grant of Probate before those assets can be dealt with.
The Probate application involves filing the original will, a death certificate, an executor's affidavit, and an inventory of the assets and liabilities of the estate. The application is advertised online, and a grant is typically made within four to eight weeks of filing, absent complications. Once Probate is granted, the executor can begin formally collecting and dealing with estate assets. The executor retains personal copies of the Grant of Probate for use with financial institutions, land registries, and other relevant bodies.
Paying Debts, Tax Obligations, and Making Distributions
Before distributing the estate to beneficiaries, the executor must identify and pay all outstanding debts and liabilities of the deceased, including funeral expenses, outstanding mortgages, personal loans, credit card balances, and any tax liabilities. The ATO may require a final individual income tax return to be lodged for the deceased for the period up to the date of death, and a separate tax return may need to be lodged for the estate if it earns income during the administration period. Until the ATO has confirmed that all tax affairs are in order, it is generally not advisable to make final distributions – an executor who distributes assets before ensuring tax obligations are met may be personally liable for the outstanding amounts.
Executors should also be alert to the possibility of family provision claims under the Inheritance (Family Provision) Act 1972 (SA). An eligible person has six months from the date of the grant of Probate to lodge a claim. Distributing the estate before this period has expired – without the consent of all potential claimants – exposes the executor to personal liability if a successful claim is later made and there are insufficient assets remaining in the estate to satisfy it. Many executors find it prudent to retain a portion of the estate for at least six months following the grant of Probate before making final distributions, or to obtain appropriate indemnities from beneficiaries.