A Guide for Executors in Victoria

1. Who is an executor?

An executor is a person appointed in a will to administer the will maker’s estate after death. The executor’s task is to carry out the will, collect and protect estate assets, pay proper liabilities and arrange distribution to the beneficiaries.

2. What is an estate?

An estate is the property and liabilities that remain after a person dies. It may include real estate, bank accounts, shares, vehicles, personal items, business interests, debts and tax obligations.

Not every asset necessarily forms part of the estate. For example, jointly owned property may pass to the surviving joint owner, superannuation or life insurance may be paid directly to a nominated beneficiary, and trust assets may sit outside the deceased’s personal estate. These issues should be checked carefully before administration starts.

3. Who is a beneficiary?

A beneficiary is a person or entity entitled to receive a gift or benefit from an estate. A beneficiary may receive a specific gift, a percentage share, the residue of the estate, or an interest held on trust.

4. What is the role of an executor?

The executor must administer the estate in accordance with the will and the law. The role involves acting honestly, acting in the interests of the estate and beneficiaries, avoiding conflicts of interest, preserving estate property, paying proper liabilities, keeping records and distributing the estate when it is legally safe to do so.

If there is more than one executor, the executors should consult each other and make decisions jointly unless the will or a court order provides otherwise. If disagreement arises, legal advice should be obtained before steps are taken that may prejudice the estate.

5. Must an executor accept the appointment?

No. A person appointed as executor does not always have to accept the role. Refusing the appointment is usually simpler before probate is granted. If an executor has already obtained probate and later wants to step down, court approval may be required.

An executor should be cautious about accepting the role if they have a serious conflict of interest, if they may need to make a claim against the estate, or if the estate may need to make a claim against them.

6. Who arranges the funeral?

The executor is usually responsible for arranging the funeral if the deceased did not make arrangements during their lifetime. The executor should consider the deceased’s wishes, consult close family where appropriate, and ensure funeral costs are reasonable having regard to the estate’s available funds.

7. What happens to the deceased’s bodily remains?

Questions about burial, cremation, ashes and organ donation may need to be dealt with quickly. The executor should consider any written wishes left by the deceased, but should also consult immediate family where appropriate, particularly if the executor is not a close family member.

8. Should there be a formal reading of the will?

A formal reading of the will is not usual. In practice, beneficiaries are usually notified by the executor or by the lawyers assisting the executor. Certain people may be entitled to request a copy of the will, depending on the circumstances and the date of the will.

Once probate is granted, a copy of the will may generally be obtainable through the Supreme Court record system.

9. What should beneficiaries be told?

Open and timely communication can reduce the risk of distrust and disputes. Beneficiaries should generally be told that they are beneficiaries and should receive appropriate information about the progress of the estate administration.

An executor should take care not to make promises about timing or distribution before debts, tax, administration issues and any potential claims have been properly considered.

10. What should be done with estate assets and liabilities?

The executor should make an inventory of estate assets and liabilities as soon as practicable. This may include real estate, bank accounts, shares, vehicles, household items, jewellery, debts, loans, tax liabilities, funeral expenses and digital assets.

Estate property should be secured and insured. Vacant houses, vehicles, valuable items and sentimental property may require immediate attention. Professional valuations may be needed for real estate, valuable personal items, business interests or contested assets.

11. What is probate and why might it be needed?

Probate is a grant issued by the Supreme Court confirming the validity of the will and the authority of the executor named in the will. A grant of probate may be required before the executor can deal with real estate, larger bank accounts, shares, managed funds or other assets requiring formal proof of authority.

In Victoria, probate and administration applications are made online through RedCrest-Probate. The Supreme Court currently requires the notice of intention to apply to be advertised online at least 15 days before applying.

12. What if there is no will?

If there is no valid will, there is no executor. A close family member or other eligible person may need to apply to the Supreme Court for letters of administration. The person appointed by the Court is called an administrator and performs a role similar to an executor, but the estate is distributed according to intestacy law rather than a will.

13. Is tax payable by the estate?

Tax issues should be checked before the estate is distributed. The executor may need to arrange final personal tax returns for the deceased and estate tax returns if the estate earns income, such as rent, dividends or interest.

Victoria does not impose inheritance tax or death duties in the usual sense, but income tax, capital gains tax and other tax issues may still arise. Inherited property can have complex capital gains tax consequences, particularly if it is sold, rented, held for an extended period or was not the deceased’s main residence. Accounting advice may be required.

14. How long does an estate take to finalise?

The timing depends on the estate. A straightforward estate may progress relatively quickly, while estates involving real estate, missing beneficiaries, tax issues, superannuation, business interests, overseas assets or disputes can take longer.

Executors should be careful about distributing too soon. Family provision claims in Victoria are usually subject to a six-month period from the grant of probate or letters of administration, and premature distribution may expose the executor to risk in some circumstances.

15. What if the estate liabilities exceed the estate assets?

If the estate’s liabilities exceed its assets, the estate may be insolvent. The executor should not pay selected creditors or distribute assets without legal advice. Insolvent estate administration can expose an executor to personal risk if handled incorrectly.

16. Does an executor get paid?

An executor is usually entitled to be reimbursed for proper out-of-pocket expenses paid on behalf of the estate. Payment for the executor’s own work is different. Executor commission or remuneration may be available if authorised by the will, agreed by the beneficiaries, or ordered by the Court.

Court-awarded executor commission in Victoria is not automatic and is assessed case by case. The statutory maximum is 5% of the estate, but that maximum is generally reserved for unusually substantial or difficult administration work.

17. Can someone claim more from the estate?

Yes. In Victoria, an eligible person may be able to bring a family provision claim if they say the deceased failed to make adequate provision for their proper maintenance and support. Claims are commonly made by spouses, domestic partners, children, stepchildren and other persons who fall within the statutory eligibility rules.

A family provision application usually must be made within six months from the date of the grant of probate or letters of administration. If an executor receives notice of a claim or potential claim, they should obtain legal advice before distributing estate assets.

18. What are the first practical steps for an executor?

The first steps are to read the will, obtain advice, identify beneficiaries, secure property, arrange or confirm funeral matters, apply for the death certificate, redirect mail, notify relevant asset holders, identify debts, check insurance and work out whether probate is required.

After probate is obtained, the executor can usually collect estate assets, pay debts, prepare estate accounts, deal with tax issues and distribute the estate when it is appropriate and legally safe to do so.