Executing a Will Can Be Personally Taxing
If you have been named as an Executor in a Will, following a person’s death there are legal procedures that must be followed. This is a serious task with considerable responsibility, and you can be held personally liable for incorrect administration of the estate. In almost all cases, consulting with a lawyer would be prudent. Here we highlight some key responsibilities:
- Timeliness: Executors of wills must administer the estate within a reasonable time. Should you fail to do this and the beneficiaries experience a financial loss as a result, then you could be personally liable for this loss.
- Interpreting Entitlements: Exercise caution when determining who is entitled to receive money or assets under the terms of the Will. Incorrect interpretation of the Will, or failure to identify all the beneficiaries are the most common traps.
- Insurance: As an executor you can be held personally liable for any damage to property which has not been secured or insured.
- Fair Price Selling: Should you need to sell assets before you can distribute the estate you will need to ensure that you obtain a fair price for these assets. If you don’t, the beneficiaries have a legal right to sue you personally to recover the shortfall.
- Tax Debts: If you have distributed all the assets of the estate to the beneficiaries and the estate still owes money to the tax office, as executor you are personally liable to make the payments.
- Accountability to Beneficiaries: Beneficiaries who are dissatisfied with your performance are entitled to full disclosure of administration activities and may approach the court to have you removed as executor.
For advice about administering an estate contact me on 9908 9888 or legal@edneyryan.com.au. Or call to request a copy of Edney Ryan Legal’s “A Guide for Executors”.