Have you been asked to by a friend or family member to be the executor of their estate? Before you say yes it is important to be aware of the responsibilities you would be undertaking and the potential liabilities that may be involved. Executing a will can be a complicated task and it may therefore be prudent to seek advice from a lawyer in relation to exercising all your duties. The deceased’s estate will cover the reasonable fees associated with such advice.
An executor is the person named in a will to carry out the wishes of a person after they die. They organise to collect the assets of the deceased, pay any debts and distribute the property as set out in the will. An executor has various other duties including:
- Obtain authority to administer the estate (which may involve applying for probate or letters of administration)
- To notify all beneficiaries named in the will;
- To manage the property or goods left in the will until such time as the property and goods are distributed;
- Valuing the estate and keeping a list of the valuations. The estate includes properties, personal effects and debts (both due and owing). Once the estate is valued, the executor must pay all debts owing and divide the estate reflecting the will of the deceased; and
- Completing income tax returns and establishing trusts.
The executor will also be responsible for facilitating any funeral arrangements or organ donation wishes set out in the will.
An executor may be liable for failing to act in accordance with the will and may be held personally liable for any contracts entered into after the date of death.
As can be seen from the above, taking on the responsibility of being an executor is no light task. Even if you are asked to be an executor, or named executor in a will, you have no obligation to accept the responsibility. You should consider the request to be an executor in light of the aforementioned obligations and only accept the offer if you believe you will be capable of fulfilling your duties. However, it is important to note that once you refuse to be an executor, you cannot later change your mind.
Given that there is such a great level of responsibility and risk involved with being an executor, you may be wondering if you are able to charge for your services. There are strict limitations on executor’s remuneration.
The deceased may set out in the will how much the executor should be paid. If this is not included in the will, the executor may not be able to get paid for their efforts. Pursuant to the Administration and Probate Act, the Court can also allow the executor to charge a commission out of the deceased’s estate not exceeding 5% for his pains and trouble, if such fees are just and reasonable.
Separately to any remuneration, the executor may use money from the estate to cover necessary expenses involved with exercising their duties in relation to the estate, such as fees payable to accountants, lawyers, etc.
If you have been asked to be an executor of a will, or have any other questions relating to wills and estates, get in touch with our Wills and Estates team today!