In brief: An executor is the person appointed by a testator (Will maker) to carry out the terms of a Will. The role of an executor requires a number of obligations and duties to be fulfilled.
Some tasks that an executor is responsible for include:
- locating the Will
- attending to funeral arrangements
- applying for probate (the document which proves the validity of a Will and gives an executor legal authority to deal with the estate) if required
- paying debts of the estate
- collecting assets of the estate
- distributing the estate to beneficiaries in a timely manner
- preparing estate accounts
- lodging estate tax returns if required
- defending claims against the estate if required
An executor may take on the role of trustee if there is a trust established by the Will
When an executor has completed all of their duties, their role ends. However, where a Will establishes a trust or trusts within it, the person nominated as executor will often have to take on the role as trustee of those trusts.
The role of a trustee may include:
- preserving and managing estate assets for minor beneficiaries until they reach 18 years of age
- preserving and managing estate assets until a beneficiary attains a specific age as nominated by the testator, for example, 30
- preserving and managing estate assets that have been placed into a testamentary trust established on the death of the testator
- passing accounts and lodging tax returns for trusts created under a Will
When a trust is created by a Will, the role of a trustee may continue for an extended period as nominated by the testator. In NSW, VIC and QLD 80 years from commencement is the longest period that a trust is permitted to run by law. The trustee will have to manage the trust until it vests (that is, until it comes to an end).
The terms executor and trustee are often used interchangeably within Wills because of the similar nature of each role - both carry the expectation that decisions are made in the best interests of beneficiaries.
How to choose who to nominate as an executor or trustee
While many clients nominate the same person to act as their executor and trustee, it is possible to draft a Will so that the people nominated for each position differ. For example, nominating your parents to be the executors of your Will but then your accountant and lawyer to be the trustees of testamentary trusts established for your children.
It is important that you nominate people whom you trust implicitly to act in these positions. This can include family, close friends, accountants, financial advisers or lawyers. Consider the age of those you are appointing and make them aware of your expectations in advance so that they can give effect to your wishes as far as practicable. The role will require legal or taxation assistance so nominating persons with relevant skills or, the ability to obtain assistance with the administration of your estate or management of trusts created under your Will is prudent.
This article has been published by Colin Biggers & Paisley for information and education purposes only and is a general summary of the topic(s) presented. This article is not specific legal or financial advice. Please seek your own legal or financial advice for any questions you may have. All information contained in this article is subject to change. Colin Biggers & Paisley cannot be held responsible for any liability whatsoever, or for any loss howsoever arising from any reliance upon the contents of this article.