The Executor's Guide: Your Duties When Administering an Estate

An executor is the person named in a Will to administer the estate of the deceased. The role is created by the Will itself — you become the named executor the moment the Will is signed, though your active responsibilities only begin at the death of the Will-maker. The executor's job, in essence, is to gather the deceased's assets, pay all outstanding debts and liabilities, and distribute the remaining estate to the beneficiaries in accordance with the terms of the Will and the requirements of the law.

It is important to understand that the role of executor is separate from the role of beneficiary. You can be both an executor and a beneficiary of the same estate — that is entirely permissible — but the two roles carry distinct responsibilities. As a beneficiary, you have an interest in the estate. As an executor, you have a legal duty to administer it properly in the interests of all beneficiaries, not just yourself. This gives rise to what is known as a fiduciary duty — a duty to act in good faith, with undivided loyalty to all beneficiaries, and not to prefer your own interests over theirs. The courts take fiduciary obligations seriously, and an executor who breaches them can be held personally accountable.

There are a few important preliminary points. First, an executor must be over 18 years of age. Second, if you are named as an executor but do not wish to take on the role, you may be able to renounce the executorship — but only before you have taken any steps in administering the estate. This is sometimes described as acting before you have "intermingled" with the estate. Once you have taken actions as executor — such as dealing with the deceased's bank accounts, securing property, or notifying institutions — you have accepted the role and renunciation becomes more difficult. If you are uncertain whether to act, seek legal advice before taking any steps.

Many executors find it useful to engage a solicitor to assist with the administration, particularly where the estate includes real estate, complex assets, or potential disputes. Andrew O'Bryan provides full executor support — from the initial probate application through to final distribution — and can advise you at any stage of the process, including where you have already begun administering and have questions or concerns.

The period immediately following a death is understandably difficult, and executors are not expected to act instantaneously. However, there are a number of practical steps that should be taken as soon as reasonably possible, both to protect the estate's assets and to set the administration on the right footing from the outset.

The first priority is to obtain multiple certified copies of the death certificate. You will need these for virtually every step of the administration — banks, superannuation funds, insurance companies, the Land Registry, the probate office, and government agencies will all require a copy before they will deal with you in your capacity as executor. Order at least eight to ten copies from the Registry of Births, Deaths and Marriages Victoria; it is far easier to have more copies than you need than to repeatedly order additional ones.

Next, locate the original Will. The original — not a copy — is required for the probate application. If you do not know where the original Will is stored, check the deceased's home, their solicitor's office, and any safe deposit box they may have held. If you cannot locate the original, this creates a complication that requires legal advice to resolve. Once you have the Will, identify all named beneficiaries and notify them of the death, though you are not yet required to disclose the full terms of the Will at this stage.

Secure the deceased's assets as a matter of priority. If the deceased owned property that is now vacant, arrange for it to be secured — change the locks if necessary and ensure the property is insured. Vacant residential property is at greater risk of theft, vandalism and loss of insurance cover than occupied property, and as executor you are responsible for its safekeeping. Notify banks and financial institutions of the death, requesting that accounts be frozen pending the grant of probate. Do not distribute any assets or make any payments from the estate at this stage — even to cover immediate expenses — without taking advice.

Not every estate requires a formal grant of probate from the Supreme Court of Victoria. Whether probate is necessary depends principally on the nature and value of the assets involved. Some assets pass outside the estate altogether and do not require probate — for example, jointly owned property (which passes automatically to the surviving owner by right of survivorship), superannuation death benefits (which are paid at the discretion of the trustee), and life insurance proceeds payable directly to a named beneficiary. These assets are not governed by the Will and do not form part of the estate.

For assets that do form part of the estate — such as assets held solely in the deceased's name — financial institutions and the Land Registry typically require a grant of probate before they will act on the executor's instructions. Most banks will release small account balances to an executor without a grant of probate, but the threshold varies from institution to institution, and for significant balances probate will generally be required. If the estate includes real estate held solely in the deceased's name, probate will invariably be needed to transfer or sell that property. The same is true for substantial share portfolios and most significant financial assets.

The probate application is made to the Supreme Court of Victoria's Probate Office. It involves filing the original Will, the death certificate, an affidavit by the executor, and payment of court fees calculated on the gross value of the estate. Andrew O'Bryan handles probate applications regularly and can advise you quickly and efficiently on whether probate is needed for your particular estate, assist you in preparing and filing the application, and manage any complications that arise in the process.

Once probate has been granted (or it has been confirmed that probate is not required), the executor's task is to compile a complete picture of the estate's assets and liabilities. This inventory is the foundation on which the entire administration rests. Assets to identify and value include: all bank and savings accounts; term deposits and investment accounts; share portfolios and managed funds; the deceased's interest in any business; motor vehicles; real estate and other property; valuable personal property such as jewellery, artwork, and collectibles; and any money owed to the deceased, such as unpaid loans or judgments in their favour.

For real estate and significant personal property, professional valuations should be obtained. These valuations serve two important purposes: they establish the value of the asset for the purpose of calculating the estate's net value (relevant to the distribution to beneficiaries), and they establish the cost base for capital gains tax (CGT) purposes. The CGT implications of estate assets — particularly shares and investment properties — can be significant, and obtaining valuations at the time of death is essential for the beneficiaries' future tax positions. Do not neglect this step, even if it seems unnecessary at the time.

In parallel, compile a full list of the deceased's debts and liabilities. These include: the mortgage on any property; car loans or personal loans; credit card balances; tax debts (including any outstanding income tax, PAYG or GST liabilities if the deceased was in business); utilities and service accounts; any informal loans from family or friends; and the costs of the funeral. You will also need to lodge the deceased's final income tax return (for the period from 1 July to the date of death) with the Australian Taxation Office, and arrange for their tax file number to be noted as deceased.

One of the most important — and most commonly misunderstood — rules of estate administration is this: debts must be paid before distribution. The beneficiaries' entitlements under the Will only arise in relation to the net estate — that is, after all debts, liabilities and costs of administration have been met. If an executor distributes assets to beneficiaries and it later emerges that the estate had outstanding debts that were not paid, the executor can be held personally liable to those creditors for the amount that should have been retained to meet their claims. This is not a theoretical risk; it is a real and serious consequence that catches unwary executors.

The order of priority in paying claims against the estate is well established. Funeral expenses come first — these are given priority because society has an interest in the proper burial of the deceased. Next come the costs of administering the estate, including legal fees and the costs of obtaining probate. Then secured creditors (those whose debts are secured by a charge over an asset, such as a mortgagee). Then unsecured creditors in order of their legal priority. Beneficiaries receive what remains only after all of these claims have been satisfied. Where the estate is solvent, this order rarely causes difficulty in practice. But where the estate is marginal or the debts are substantial, the priority rules matter a great deal.

To protect yourself as executor, you should advertise for creditors before distributing the estate. This is done by placing a notice in the Victorian Government Gazette and, typically, a newspaper of general circulation, calling on any person with a claim against the estate to notify the executor within a specified period (usually 30 days). If a creditor fails to come forward after being given proper notice, the executor has greater protection against personal liability if they then distribute the estate without satisfying that claim. If the estate may be insolvent — that is, if the debts may exceed the assets — do not take any further steps without specialist legal advice. Administering an insolvent estate requires specific procedures, and the consequences of getting it wrong are severe.

Once all debts have been paid, all liabilities have been resolved, and the family provision claim period has passed (or any claims have been settled or determined), the executor can proceed to distribute the estate in accordance with the terms of the Will. Depending on what the Will provides, this may involve transferring real estate to named beneficiaries, paying cash legacies to specific beneficiaries, closing bank accounts and dividing the proceeds, transferring shares, and dealing with personal chattels such as jewellery, motor vehicles, and household contents.

The transfer of real estate requires lodging the appropriate transfer forms at Land Use Victoria (the State's land registry). Where the executor is also a trustee of a testamentary trust created by the Will, additional steps are required to vest assets in the trust. For each distribution made, the executor should obtain a written receipt from the beneficiary acknowledging that they have received their entitlement. These receipts form an important part of the executor's records and provide protection in the event that a beneficiary later claims they did not receive what they were entitled to. Keep complete records of every payment made, every asset transferred, and every decision taken throughout the administration.

An important protection for executors is the concept of the "executor's year." Under Victorian law, beneficiaries are generally not entitled to demand that the executor distribute the estate within the first twelve months following the death of the Will-maker. This period gives the executor time to properly gather and value assets, pay debts, deal with tax obligations, and navigate any disputes or complications that arise. The executor's year is a general rule rather than an absolute one — it can be extended where the complexity of the estate justifies it — but unreasonable delay beyond that period can expose the executor to claims from beneficiaries for interest on their unpaid entitlements or for breach of their duties.

After 33 years of Wills & Estates practice, Andrew O'Bryan has seen the same mistakes made by well-intentioned executors again and again. Knowing what those mistakes are is the first step to avoiding them.

Distributing too early. This is the most common and most dangerous mistake. Distributing estate assets before all debts have been paid, before the family provision claim period has expired, and before all tax obligations have been met, exposes the executor to personal liability. It can be very difficult to recover funds from beneficiaries who have already spent their inheritance. There is rarely a good reason to rush distribution, and strong reasons to wait until you are certain the estate is clear.

Failing to advertise for creditors. Placing a notice calling for creditors is a simple step that provides significant legal protection. Executors who skip this step and then distribute the estate may find themselves personally liable if an undisclosed creditor emerges after distribution. The cost and effort of placing the notice are trivial compared to the protection it affords.

Failing to keep proper accounts. An executor has a duty to be able to account to the beneficiaries for everything they have done with the estate. Sloppy record-keeping — failing to document payments, not keeping receipts, mixing estate funds with personal funds — is a breach of the executor's duties and can lead to costly disputes. Maintain a dedicated estate bank account for all estate receipts and payments, and keep a running record of every transaction.

Taking executor commission without court approval or beneficiary consent. An executor is entitled to claim reasonable commission for their time and effort in administering the estate. However, commission cannot simply be deducted from the estate. It must either be approved by the court or agreed to in writing by all adult, competent beneficiaries. An executor who helps themselves to commission without following the proper process is at risk of having to repay it.

Neglecting CGT valuations. Failing to obtain market valuations of estate assets — particularly real estate and shares — at the date of death can have significant capital gains tax consequences for beneficiaries when they later sell those assets. This is easily avoided by obtaining proper valuations as part of the estate administration.

Making informal gifts or preferential payments. An executor who pays one beneficiary ahead of others, or makes informal gifts to family members from estate funds, is in breach of their fiduciary duty. All beneficiaries must be treated impartially and in accordance with the terms of the Will. This applies even where the executor is also a beneficiary themselves.

Not every estate requires solicitor involvement at every stage, and Andrew O'Bryan will always advise you honestly about what level of assistance is appropriate for your particular situation. That said, there are circumstances in which legal advice is not merely helpful — it is essential for the protection of the estate and of you personally as executor.

You should seek legal advice if the estate includes real estate — whether residential, commercial, or rural. Transferring property at Land Use Victoria involves specific legal requirements, and getting it wrong can cause significant delays and costs. You should seek advice if the estate is anything other than straightforward — for example, if it involves a business interest, a self-managed superannuation fund, a testamentary trust, foreign assets, or complex shareholdings. These assets require specialist handling, and mistakes made in their administration can have lasting consequences for beneficiaries.

Legal advice is essential if there is any dispute within the family about the terms of the Will, the validity of the Will, or any claim by a beneficiary that the estate has been mismanaged. Disputes between beneficiaries can escalate quickly, and an executor who is not legally represented is at a significant disadvantage in managing them. Similarly, if you receive any notification of a threatened family provision claim — even an informal one — you should seek advice immediately, as there are steps you must take to protect the estate and your position as executor.

If you believe the estate may be insolvent, stop immediately and seek advice before taking any further steps. Administering an insolvent estate without proper guidance is one of the fastest ways to expose yourself to personal liability. Andrew O'Bryan provides comprehensive executor support — from the probate application through to final distribution and accounting — with transparent fixed fees where the scope of work allows. You do not need to face these responsibilities alone, and the cost of good legal advice is almost always far less than the cost of getting it wrong. Contact Andrew today to discuss your situation.