Executors, administrators and trustees
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The responsibilities of a Legal Personal Representative (LPR) generally begin with arranging the funeral. Where there is no valid will, the responsibilities of the administrator depend entirely on obtaining the grant of letters of administration.
An executor should obtain a grant of probate as soon as possible, although as will be seen below, executors have certain powers before probate is obtained. The beneficiaries have no interest in the deceased’s property until the executor is in a position to distribute the estate; before this occurs all they have is a right to sue the executor if they fail to administer the estate diligently and correctly.
An LPR is not required to distribute the net assets of the estate immediately (A&P Act s 49) but must make reasonable efforts in all the circumstances to wind up the estate promptly. While there is no rule or law about this, courts usually allow 12 months from the date of death for the estate administration to be completed. However, an LPR should be aware that beneficiaries are entitled to interest on a gift of money if it is not paid within 12 months of the date of death (A&P Act s 39(b)). Further, it may be advisable for an LPR to distribute the estate immediately after the six-month limitation period expires, if a family provision claim is likely.
The major duty of an LPR is to collect the deceased’s assets, pay the deceased’s proper debts, and distribute the net proceeds of the assets according to the directions in the will or pursuant to the statutory order on intestacy.
The debts of the deceased must be ascertained and paid before any distribution of the estate is made; these include income tax debts. Funeral and testamentary expenses must be paid in priority to all other debts of the deceased, which must also be paid before the estate can be distributed (A&P Act ss 37, 39A, 39B, 40).
An executor should advertise in the form of schedule 2 of the Trustee Act 1958 (Vic) (‘Trustee Act’) for claims against the estate to be made to them within two months of the advertisement (see Trustee Act s 33 sch 2; ‘Time for payment of debts’, below).
An LPR must keep detailed accounts and records of the administration of the estate (A&P Act s 28). The Registrar of Probates has the power to have an LPR file accounts with the court in the form stipulated in the Supreme Court (Administration and Probate) Rules 2014 (Vic) (‘A&P Rules’). A beneficiary has the right to inspect and copy any documents or accounts relevant to that person’s interest in the estate.
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The executor has the choice of paying funeral expenses at an early date if funds permit. Banks will often advance funds to pay funeral costs following the production of an invoice from a funeral parlour, without the need to produce probate. Sometimes, banks can also make payments to creditors to avoid additional interest charges (e.g. payment of rates on a property) while awaiting the grant of probate. To protect the estate, before probate is obtained, the executor is allowed to release and pay debts, receive money owing to the deceased and take possession of land, provided in all cases that they will eventually be able to satisfy the court of their title and power to administer the estate. The executor’s title to the estate assets is only made certain and final by the grant of probate.
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Problems may arise with the administration of an estate. Some of these are discussed below.
No executor appointed
When there is no executor appointed in the will, or the executor has died or is divorced from the willmaker, the court usually grants the administration of the estate to the beneficiary with the greatest interest in the estate. This administrator then carries out the wishes of the deceased as expressed in the will. This procedure is called ‘letters of administration with the will annexed’.
Executor does not wish to act
A person appointed by the willmaker as executor does not have to accept this responsibility. If a person renounces their appointment under the will (i.e. refuses to act), another executor named in the will may assume the role if the wording of the will allows this.
If there is no other executor named in the will, it will be treated in the same fashion as a will with no executor appointed, and letters of administration with the will annexed will be granted.
Executor is dead
Where a sole executor dies before the willmaker or before any steps have been taken to prove the will, letters of administration with the will annexed are granted. Where the last executor to obtain probate dies, the executor of that dead executor also becomes the executor for the deceased (A&P Act s 17). To avoid these unsatisfactory situations it is advisable to appoint more than one executor. Otherwise, wills should be changed on the death of someone nominated as executor.
Executor is a minor
Where the sole executor is under 18 years of age, the court can appoint the minor’s guardian, or such other person as the court thinks fit, as executor until the minor reaches 18 (A&P Act s 26).
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Normally a person is appointed as both executor of the will and trustee of the estate. However, these are two different jobs. The executor’s role comes to an end when the assets have been realised, the debts paid and the balance of the estate is ready to be distributed to the beneficiaries.
Where the terms of the will create a continuing duty, such as the support and maintenance of young children, this role is performed as trustee.
Executors, administrators and trustees
Chapter: 9.4: Estates
Contributor: Justin Rizzi, Barrister
Current as of: 1 September 2024
Law Handbook Page: 814
Next Section: Settled estates
