When a person dies, the administration and management of his or her estate is carried out by the executor, who is appointed by the deceased person (the "testator") under his or her will. Generally the executor must work out what the deceased owned and the amount of debts the deceased owed.
If the estate has assets of more than $11,000 or includes land, the executor must apply to the court for "probate", which is where the court recognises the will as authentic. Obtaining probate enables the executor to deal with the assets and liabilities of the deceased's estate and to distribute the estate according to the will (see How to apply for probate of a will).
While the use of a professional executor is common, a family member or friend may be appointed. In both situations the executor may be paid and may be a beneficiary under the will. The executor's position is one of trust and he or she must work in the best interests of the beneficiaries of the will.
One of the more difficult parts of an executor's role is to sort out any claims that creditors have on the estate. There is an order of priority that determines which debts are to be paid first.
This order of priority, which is contained in the INSOLVENCY ACT 1967, requires that any administration costs for the estate, funeral expenses, medical expenses and unpaid taxes must be paid out first. After those costs are paid, creditors are paid according to the priorities established under the Act, for which see How to recover debt from a bankrupt.
You may not distribute the estate until all claims have been satisfied or disputes resolved. If you distribute the estate before this you as the executor are personally liable for the debts. To prevent this occurring you should either:
While it is your job to fulfil the deceased's wishes as stated in the will, you may deal with the property in a way that is contrary to the will if all the beneficiaries are adults and they consent to the change.
If the deceased gifted property in the will but no longer owned it when he or she died, the gift has no effect and the beneficiary gets nothing.
If the total amount gifted in legacies (money left in a will) is more than the amount of the estate, the beneficiaries receive their different legacies on a proportional basis.
Yes â€“ you have the choice of accepting or renouncing the position of executor. To renounce the position, you must sign a formal renunciation document, which does not take effect until it is filed in court.
However, you may not renounce the position if you have already shown an intention of accepting it. The most obvious way of showing an intention to accept is by obtaining probate from the court, but the intention may also be shown in other ways.