Executors, administrators and trustees to a will have very specific duties and tasks to perform and, though, the same person can fulfill one or more of these roles, the duties are not mandatory but the do come with a not insignificant responsibility.
Duties of executors and administrators
The responsibilities of a personal representative 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. Without that grant they have no standing at all and the estate vests in the State Trustees until letters of administration are granted (s 19 Administration and Probate Act 1958 (Vic) (“A&P Act”)). Once letters of administration are granted, the administrator’s duties are the same as those of an executor (s 27).
The major duties of the executor begin with the grant of probate, although as will be seen below, they have certain powers before probate is obtained. The beneficiaries have no interest in the deceased 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. A personal representative (executor or administrator) is not required to distribute the net assets of the estate immediately (s 49) but must make reasonable efforts in all the circumstances to wind up the estate promptly. While there is no rule of law about this, courts usually allow 12 months for estate administration to be completed.
Delay may cause particular problems where the major or sole beneficiary is someone (particularly a spouse or domestic partner) with no source of income other than that deriving from the willmaker, or where there is intestacy. (A definition of “domestic partner” is included in “Disadvantages of intestacy”.) Married couples may maintain a joint bank account that either party may sign. On the death of either of the account holders, the survivor automatically acquires the right to the entire account and will then have access to money until the estate is finalised.
A Victorian probate duty clearance (or Section 14 Certificate) is not required where the testator died before 1 January 1984 (that duty has been abolished).
A spouse or domestic partner of the deceased should, if left without income, apply for an appropriate social security payment (see Dealing with social security).
The major duty of a personal representative is to collect the assets of the deceased and distribute the proceeds of such collection according to the directions contained in the will or the statutory order on intestacy.
The debts of the deceased must also be ascertained and paid before any distribution is made; these will include debts owing in the form of income tax. Funeral and testamentary expenses must be paid in priority to all other debts of the deceased. An executor should generally advertise for claims against the estate to be made to them within two months of the advertisement (see s 33 sch 2 Trustee Act 1958 (Vic) (“Trustee Act”); and see “Time for payment of debts”). The representative is also required to keep detailed accounts and records of the administration of the estate. A beneficiary has the right to inspect and copy any documents or accounts relevant to that person’s interest in the estate.
The executor has the choice of paying funeral expenses at an early date if funds permit. If possible, they 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 (but not sell it), provided in all cases they will eventually be able to satisfy the court of that power. The title is only made certain and final by the grant of probate.
Problems may arise with the administration of an estate. Some of these are discussed below.
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”.
A person appointed by the willmaker as executor does not have to accept this responsibility. If a person renounces 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 the will with no executor appointed discussed above, and letters of administration with the will annexed will be granted.
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 (s 17 A&P Act). 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.
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 (s 26 A&P Act).
Normally a person is appointed as both executor and trustee. However, these are two different jobs. The executor’s role comes to an end when they have realised the assets of the estate, paid any debts and is then ready to distribute the balance of the estate 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.