Death is never a welcomed topic and making a Will and estate preparations for a loved one or for yourself is never easy. However, paying care and attention to the details gives all parties more certainty during what is a difficult time.
One vital element of estate planning is deciding upon the right executor. An executor is a person who manages the deceased’s estate. Whether you have been asked to be an executor yourself, or you are nominating one for your own Will, there are many aspects to consider.
This blog covers the common questions Shine Lawyers New Zealand is asked regarding the role of executor of a Will.
To reduce the chances of any disputes and even legal challenges to a Will, choosing a suitable executor is key. If you would like to speak to one of our Wills and Estates experts, contact us at Shine Lawyers NZ Limited.
Who can be the executor of a Will?
An executor must be over the age of 18 years old and must also have the mental capacity to carry out their role. It is common to select a partner, a relative, or a close friend of the family. Sometimes a professional is preferred, such as a lawyer or accountant.
To minimise the risk of disputes and/or claims against the estate, it is always best to nominate the most neutral, professional person possible.
Can an executor also be a beneficiary?
A beneficiary is someone who is entitled to some part of the deceased’s estate. Beneficiaries can also perform the role of executor. However, it’s important to note that nominating an executor who is also a beneficiary can create tension since the executor of a Will is also receiving a benefit from the Will.
While it is legally allowed, other beneficiaries will often be extra diligent in ensuring the executor conducts their role properly in these cases.
What information does an executor need?
There is a raft of information that executors must obtain in order to carry out their duties; these may include:
- assets and liabilities of the estate,
- tax position,
- financial position,
- and the full contact details of all beneficiaries.
The executor may also need to know:
- the deceased’s wishes regarding funeral arrangements
- who they wish to leave sentimental items to.
When should you obtain this information?
The best way to obtain this information is ideally before the death of the person who made the Will. Therefore, it is prudent for an executor to discuss these issues with the Will-maker in advance and ensure there is clarity around their instructions.
What are the responsibilities and duties of an executor?
There are many duties that fall under the executor’s responsibilities, these may include:
- Dealing with finances: The executor must ascertain the deceased’s assets and take charge of them, paying any remaining debts. The deceased’s funds may be used to cover administrative expenses but primarily they must be distributed to the beneficiaries. If the executor does not perform these duties properly, they may be held legally responsible or even removed.
- Take care of funeral arrangements
- Validating the Will
- Representing the deceased’s estate: if there are any legal proceedings.
- Looking after the property and other assets: this is during the handover period – for example, ensuring a house is insured.
These duties can involve a significant amount of time and can also be emotionally draining, especially when dealing with the complex and in some cases competing wishes of family and other beneficiaries.
Do I have to accept appointment as an executor?
You are not obligated to be an executor if you do not wish to accept this role.
What happens if I don’t want to be executor?
If you do not accept, the role will be passed to the next nominated person in the Will. This is also the case if you initially accept, then change your mind.
If the Will does not nominate an alternate executor, there is a list of people who have priority to become administrators of the Will.
Can the executor of a Will access bank accounts?
Yes, the executor of a Will can access bank accounts, but they can usually only do this once probate has been granted by the High Court. The reason access is granted is that one of the main responsibilities of the executor is dealing with the financial assets of the estate.
Who pays the administrative costs?
Sometimes it may be difficult to access the deceased’s finances to pay administrative costs. Therefore an executor may find it simpler and more expedient to bear these costs themselves. However, there is no obligation for an executor to pay expenses out of pocket.
If the situation does occur, an executor should always keep thorough records and receipts, so they can claim these expenses against the deceased’s estate.
Does an executor have to show accounting to beneficiaries?
Beneficiaries may be curious about how the deceased’s state is being financially managed, and they have a right to this information as it affects their entitlement under the Will.
Sometimes beneficiaries are bequeathed a ‘residue’, which is the balance of an estate once debts and costs are paid. In this case, they should be fully informed of the accounting of the estate.
However, some beneficiaries simply receive a specific gift or amount of money. In this case, they’re not entitled to know the full accounting of the estate because the accounting does not affect their fixed entitlement.
When does the executor distribute the estate assets in accordance with the Will?
Generally, no distribution of assets should be made by the executor until six months has passed from the grant of administration of the estate. However, the executor can make distributions for the maintenance, support, or education of a person who was totally or partially dependent on the deceased at the time of their death in this six-month period.
If an executor distributes the estate assets before this time period, and there is a claim made against the estate, then the executor can be held personally responsible for reimbursing the estate.
If there are no claims made against the estate, or the executor has not been notified of a claim, then the executor will not be held liable for the distribution of estate assets, post six months from the date of probate.
Does the executor get paid for the work they do?
Normally the executor is not a paid role unless the Will makes special provision for this. Sometimes the executor may be a professional, such as a lawyer or an accountant, so the Will might have a specific clause that allows for payment for their services.
The costs of services required to administer the estate, such as valuers, accountants, or real estate agents are paid for by the estate.
Does the executor of a Will have the final say?
No, the executor does not have the final say in a Will. Eligible parties can legally challenge, or ‘contest’, a Will. Then the executor is entitled to defend any of these legal challenges.
If you are having issues with a Will or deceased estate, contact our expert Wills & Estate lawyers as soon as possible. Will disputes are legally subject to strict time limits.
Shine Lawyers’ Wills and Estate Services
The death of a family member or loved one is never easy, especially when there is inheritance involved. Disputes over money, property, and everyone’s entitlements are often complex. In this situation, consulting an experienced Will and Estate disputes lawyer can be invaluable.
Shine Lawyers are experts in Will and Estate disputes and strive to help our clients get their fair share and ensure smooth resolutions.