What is involved in administering a deceased’s estate?

By Darryl Browne in Blog on September 28, 2021

 

When a person dies owning assets in NSW, the person named as executor in the deceased’s will or, if there is no valid will or no executor willing and able to act, a beneficiary of the estate applies to the Supreme Court of NSW for a grant to represent the estate.

This is called Probate (if an executor is appointed) or Letters of Administration (in any other circumstance).

Once appointed, and sometimes beforehand, in anticipation of appointment, the executor or administrator has a responsibility to administer the estate. This is not an easy task. There are lots of things the appointed person must do.

Depending on the deceased’s circumstances, assets and beneficiaries, the executor or administrator should:

1. decide how the deceased’s remains are dealt with (being burial or cremation)
2. organise the funeral arrangements
3. dispose of the deceased’s remains in a dignified and respectful manner
4. ascertain if the deceased had a will (or other testamentary document)
5. ascertain (which sometimes means investigate) the nature and extent of the deceased’s assets
6. locate and obtain details of beneficiaries
7. inform beneficiaries of their entitlement
8. consider if there is any doubt about the effectiveness of the will. (For instance, a will is generally made invalid if the deceased married after making the will)
9. obtain Probate or Letters of Administration, if required
10. collect, sell and otherwise deal with the deceased’s assets so that expenses of administration may be paid and the estate prepared for distribution
11. defend and resolve legal proceedings involving the deceased or the deceased’s estate. (Examples are family provision claims or claims by creditors)
12. preserve (which may include insure) and invest the assets pending a distribution
13. ascertain the deceased’s debts and any debts or expenses of the estate. This may require the executor to lodge tax returns
14. attend to pay the proper debts and expenses of the deceased and the estate
15. pay him or herself remuneration (if the will allows this or affected beneficiaries give fully informed consent) or seek commission from the court
16. produce accounts to either the court or beneficiaries for the executor or administrator’s financial transactions involving the estate.

 

Once the executor (or administrator) has performed these important, often onerous and commonly time-consuming responsibilities, the person must distribute the estate according to law.

 

Who should be appointed executor?

The list of responsibilities raises a fundamental issue for a person making a will: does the person to be appointed as executor have the time, willingness and where-with-all to do the things that are necessary?

A surprisingly large number of executors don’t carry out their responsibilities, or don’t do them well, or do not do them in a timely manner. This exposes the executor to the risk of personal liability.

An example of the problems that can arise when the wrong person is appointed involved the estate of Jocelyn Richardson. At her death, one of her children, Wayne, was living in the home that formed the major part of the deceased estate. He continued to do so after her death, without paying rent.

Three years’ later, the deceased’s two other children, Gregory and Mark, brought proceedings to remove Wayne as an executor and sought the appointment of an independent administrator. That order was made. Gregory and Mark brought a claim against Wayne for damages arising from his occupation of the home after the deceased’s death.

The court decided that the loss of rent for the home over the period from the date of the deceased’s death to the date on which Wayne was removed as executor represented the loss sustained by the estate as a result of the breach by Wayne of his duties as an executor. Wayne was also liable for utilities, such as water rates and electricity charges, for the period from the date of the deceased’s death to the date of appointment of the administrator. The administrator’s costs were a cost that the estate would not have been liable had it not been for Wayne’s breach of his duties as executor. Accordingly, all these amounts, plus interest, were ordered to be borne out of Wayne’s share of the estate.

With the benefit of hindsight, and after the expenditure of legal cost running to hundreds of thousands of dollars, it is clear that Wayne was not a person who should have been appointed executor. However, Mrs Richardson, not all the blame for that should be put on Wayne.

 

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