What do executors do?
Executors in Queensland have statutory obligations that are set out under section 52 of the Succession Act 1981 (Qld) (“the Succession Act”).
However, there is no exact guideline for executors to follow because their duties may vary depending on the size and complexity of the estate, as well as the relationships, diversity, and number of beneficiaries.
The Succession Act requires executors to:
- collect and manage the real and personal estate of the deceased and administer it according to law;
- if required, provide a full inventory of the estate and render an account of their administration of the estate to the court;
- if required, deliver up the Grant of Probate or Letters of Administration to the court;
- distribute the estate of the deceased, subject to the administration thereof, as soon as practicable; and
- pay interest, generally at a rate of 8% per annum, upon any general legacy from either the first anniversary of the death of the testator until payment of the legacy or pursuant to a provision of the Will, from a future date until payment of the legacy.
Other general obligations of an executor can include, but are not limited to:
- locating the deceased’s Will;
- arranging the funeral;
- applying for a Grant of Probate from the Supreme Court of Queensland;
- contacting all beneficiaries of the estate;
- confirming the estate’s assets and liabilities and obtaining valuations of the testator’s assets;
- protecting, maintaining, and managing the testator’s assets;
- preparing financial statements by lodging tax returns and date of death return;
- defending the Will if someone contests the Will; and
- any other additional obligations that may be specified in the deceased’s Will.
Do executors have fiduciary duties?
In addition to the executor obligations above, an executor has fiduciary duties regarding the estate and the beneficiaries. These duties arise because an executor is in a position of significant trust and confidence. The fiduciary duties an executor can have include:
- acting in the best interests of the estate at all times;
- not having a conflict of interest between their executor duties to the Estate and their own personal interests;
- this includes even a possibility of a conflict of interest; and
- if there is conflict of interest to attain express written consent from all beneficiaries to continue being the Estate’s executor; and
- must not make a profit from their position unless provided for by the courts under s68 of the Succession Act.
It is important to understand these fiduciary duties because if an executor is found to be in breach, severe penalties may apply.
What if there are multiple executors?
If the Will appoints more than one executor, section 49(4) of the Succession Act states that the executor’s powers shall be exercised jointly. This means that executors need to agree jointly regarding the course of action of the Estate’s administration.
Testators are free to appoint as many executors as they see fit, however, the Supreme Court of Queensland will only grant probate to a maximum of four (4) people who will be appointed in the order which they are named in the Will.
What are some well-known issues executors face?
Early finalisation of the Estate
It is important to not distribute an Estate too early as, among other reasons, eligible applicants may contest the distribution. The timeframe for eligible applicants to consent an Estate differs in each state. In Queensland eligible applicants have six (6) months to provide notice of their claim and nine (9) months to bring the claim (but this can be extended in certain circumstances). Therefore, if an Estate is distributed too early and it is then successfully contested, the executor can be held personally liable.
An executor is to pay all tax and creditor accounts prior to distribution of the Estate. However, if a debt is overlooked and the Estate is distributed, the executor may become personally liable to pay that outstanding debt.
Uninsured damaged assets
If an asset becomes damaged prior finalisation of the Estate, the executor could be personally liable for the costs involved for not maintaining appropriate insurance policies.
What protection do executors have?
Executors who have commenced distribution of the Estate are protected against claims under section 44 of the Succession Act where:
- the distribution was made properly in accordance with the Will.
- the executor distributed part of the Estate for the maintenance and support for the deceased’s dependent spouse or child.
- the executor did not receive notice of an application and distribution was made six (6) months after the deceased’s death.
- a notice of an application was received nine (9) months after the deceased’s death.
What if an executor does not perform their statutory duties?
An individual who has been harmed by the executor’s negligence (such as a beneficiary) may apply to the court for orders under section 52(2) of the Succession Act. The court has the authority to make whatever orders it sees fit, including a damages order. The court will also require the executor to pay interest on any funds in their possession, as well as the costs of the aggrieved person’s application.
If an executor converts, misuses, or wastes any part of the Estate’s property, section 52A of the Succession Act states that the executor’s legal liability can continue after the executor’s own death. This means that the personal representatives of the former executor will be liable to rectify the conversion or waste in the same manner the former executor would have needed to.
If you require further information on any of the above, our highly skilled Wills & Estates Lawyers are here to assist. Please contact our friendly legal team on (07) 5563 8970 or email us on firstname.lastname@example.org to arrange your free initial consult today.