What Does the Executor of a Will Do in NSW? A Guide to Your Legal Duties
Serving as an executor involves strict legal duties, potential personal liability, and a process that often takes months or years. Understanding what the executor of a will does in NSW matters whether you’re the one writing the will or the one being asked to act as executor. If you’re choosing an executor, you need to know what you’re asking of that person, and if you’re named an executor, you need to know what is expected of you and how to manage things properly.
What Is an Executor and Who Appoints Them?
An executor is the person named in a will by a testator (the person writing the will) to administer their estate when they die. In practical terms, this usually means taking the will to a lawyer to commence probate proceedings, collecting the deceased’s assets, paying debts, and distributing what is left to the beneficiaries according to the will. The testator chooses their own executor/s who do not need to hold any specific qualifications. Many people choose a trusted family member or close friend. Your executor can also be a named beneficiary in your will, and you can appoint more than one executor to act for you.
Accepting the role of an executor means taking on legal responsibilities and potential personal liability. If you are named as an executor and don’t feel you can take on the role, you may have options, but it’s important to seek legal advice first. You may renounce your appointment, but you need to do this before taking any action as executor. Once you start acting in the role, stepping away becomes much more complicated.
What Are the Key Legal Duties of an Executor in NSW?
Executors in NSW have a range of legal duties, many of which are set out under a combination of statutes – principally the Probate and Administration Act 1898 (NSW), the Trustee Act 1925 (NSW) and the Succession Act 2006 (NSW) – and supported by longstanding principles of Equity. These duties are not optional, and failing to meet them can have serious consequences. They include:
- Acting honestly and in good faith. You must always act in the best interests of the estate and its beneficiaries, not in your own interests. This is a fiduciary duty, meaning the law holds you to a high standard of loyalty and care. This includes a duty to act with the care, diligence and skill that a prudent person would exercise in managing another person’s affairs.
- Obtaining a Grant of Probate. Before you can legally deal with the deceased’s assets, you may need to apply to the NSW Supreme Court for a Grant of Probate – a formal recognition that the will is valid and that you have authority to act. Some smaller assets or jointly held property may be dealt with without probate, depending on the institution and how the asset is held. The process generally takes several months, though the exact timeframe depends on the Court’s current processing times and the complexity of the estate.
- Locating and securing all assets. You will need to identify everything the deceased owned, including bank accounts, property, investments, personal belongings, and any debts owed to them. Securing these assets early is important to prevent loss or deterioration.
- Paying all debts, taxes, and funeral expenses. Before any beneficiary receives a distribution, you must settle the estate’s liabilities. This includes outstanding bills, loans, lodging any outstanding and final tax returns, and dealing with any capital gains tax that may arise when estate assets are sold or transferred. Getting the order of payments and distributions wrong can expose you to personal liability.
- Keeping accurate records. Executors must maintain clear records of everything done as executor and keep beneficiaries reasonably informed about the progress of the estate.
- Distributing the estate. Once debts are paid, you can distribute the remaining assets to beneficiaries as directed by the will.
What Is the Difference Between an Executor and a Trustee?
An executor’s role is temporary. It begins at the point of the testator’s death and ends once the estate has been fully administered and distributed. The focus is on winding up the estate.
A trustee’s role is ongoing. A trustee manages assets on behalf of beneficiaries over a longer period, according to the terms of a trust. For example, a will might create a trust to hold assets for a child until they reach adulthood. In that case, a trustee would be needed to manage those assets over time.
The same person can be both executor and trustee. This is common in family estates where a will creates a trust for younger beneficiaries.
How Long Does an Executor Have to Settle an Estate in NSW?
The general expectation is that an estate might be settled within 12 months of the date of death. In practice, many estates take longer, particularly where there are multiple properties, business interests, disputes between beneficiaries, or complex tax matters to resolve. The probate application process alone may take several months, depending on the complexity of the estate and court processing times.
There is no fixed statutory deadline to complete administration, but if an executor takes an unreasonably long time, beneficiaries can apply to the Supreme Court to require progress or, in serious cases, to have the executor removed. Seeking legal advice early can help you manage timelines and avoid unnecessary complications
Executors may file a Notice of Intended Distribution under the Succession Act 2006 (NSW), which can provide some protection against later claims. In such cases, the executor must wait at least 6 months from the date of death and at least 30 days after publishing the notice without receiving notice of a claim, before distributing the estate. Your solicitor can provide more detail and guidance on this.
Can an Executor Be Held Personally Liable for Mistakes?
Yes. Executors can be sued by beneficiaries for breaches of their legal duties. Personal liability may arise in a range of situations, including:
- Mismanaging or allowing estate assets to lose value through neglect
- Failing to pay debts or taxes before distributing the estate
- Distributing assets to the wrong beneficiaries
- Acting in your own interests rather than the interests of the estate
- Theft or dishonest dealings with estate assets
In some circumstances, a court may relieve an executor of liability if they acted honestly and reasonably, and ought fairly to be excused, even if a mistake was made. However, you should not rely on this as a safety net.
The best way to protect yourself is to seek professional legal and accounting advice early in the process, keep thorough records of every decision you make, and act transparently with all beneficiaries throughout.
What Happens If an Executor Cannot or Refuses to Act?
Life circumstances change, and sometimes a named executor simply cannot take on the role. Perhaps they live overseas, are in poor health, or feel genuinely unable to manage the responsibilities involved.
If this applies, you may be able to renounce your appointment as executor, but you should do this before you take any steps to act in the role. Renouncing early is far simpler than trying to withdraw after you have already started.
If the will names an alternative executor, that person may be able to step in, subject to the wording of the will. If there is no alternative executor available, or if all named executors renounce, the court can appoint an administrator to manage the estate instead.
If you have already started acting as executor and later find you cannot continue, you may need to apply to the Supreme Court to be discharged and for a replacement to be appointed. This is more complex and costly than renouncing before you act.
Key Takeaways
- An executor is legally responsible for administering the deceased’s estate, collecting assets, paying debts, and distributing property to beneficiaries according to the will.
- Before dealing with estate assets, executors may need a Grant of Probate from the NSW Supreme Court.
- Executors have strict legal duties to act honestly, in good faith, and in the best interests of the estate and beneficiaries. Breaching these duties can result in personal liability.
At LEDA Lawyers, we understand that administering an estate is rarely straightforward, especially when you’re also grieving. If you’ve been named as executor and need guidance on your duties, or if you’re a beneficiary concerned about how an estate is being managed, we’re here to help. Reach out to our team for a confidential conversation.
This information is general in nature and does not constitute legal advice. It is intended as a starting point only. You should seek independent legal advice tailored to your specific circumstances before making any decisions about estate administration.