Making a will ensures that the estate is ultimately distributed in accordance with the testator’s own wishes. The testator usually appoints someone to carry out the will — namely, the executor — to distribute the estate. Because estate distribution can be complex, disputes between executors and beneficiaries arise frequently. For this reason, it is very important, when administering an estate — and especially when a dispute arises — to understand your rights and duties as either an executor or a beneficiary.
This article explains the respective rights and duties of executors and beneficiaries, and the disputes that may arise between them and how to handle them.
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What is an executor and what is a beneficiary of a will
Executors of a Will are appointed by the testator in the will. The executor’s role is to manage the deceased’s estate, pay all debts and distribute the assets in accordance with the instructions in the will (or, if there is no will, in accordance with the law). The executor has a duty to protect the estate and to protect the interests of those who will ultimately receive it — namely, the beneficiaries.
Beneficiaries of a Will are the individuals or entities (for example, charities) named in the will as entitled to receive all or part of the deceased’s estate.
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Rights and responsibilities of an executor
An executor manages the estate in the place of the deceased. The executor’s role varies depending on the nature of the estate, and generally includes the following matters:
Identifying the deceased’s real and personal property and managing it properly in accordance with the relevant law;
Notifying all parties with an interest in the will, including the beneficiaries;
Providing the Supreme Court with an inventory of all property listed in the will;
Preparing and submitting to the Supreme Court the total expenses involved in administering the estate;
Providing the Supreme Court with the relevant grant of probate and letters of administration;
Completing the income tax returns for the deceased and for the estate; and
Taking the necessary steps to distribute the estate in accordance with the final will.
Responsibilities an executor should take on:
Using New South Wales as an example, an executor in NSW is responsible for:
Arranging the funeral and/or the burial or cremation of the deceased;
Locating the original will and confirming it with the beneficiaries;
Keeping assets safe — for example, protecting property and valuables, bank accounts and making payments to insurance companies;
Lodging tax returns with the Australian Taxation Office on behalf of the deceased and the estate;
Selling property and distributing assets in accordance with the will.
The executor of an estate must comply with the various laws and rules that govern the administration of a deceased person’s estate.
The executor is also responsible, on behalf of beneficiaries under 18 years of age, for preserving estate assets, administering trusts and making investments.
Please note: some estates are complex, so it is recommended that executors consult a legal professional to help with the distribution of the estate.
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Rights of a beneficiary
As a beneficiary under a will, you enjoy the following rights (using New South Wales as an example):
To be informed that the deceased did in fact leave a will;
Beneficiaries have the right to obtain a copy of the will;
While the executor is administering the estate, to be kept informed at any time: beneficiaries should be notified of any possible delays in the distribution of the estate.
Within 12 months of the deceased’s death, beneficiaries will be able to receive their entitlements, unless the will provides otherwise or there are extenuating circumstances that have been explained.
Beneficiaries should be told what their rights are and the expected timeframe within which they will receive their inheritance.
They should be informed of any liabilities, including debts and taxes owed by the deceased’s estate.
They should receive a distribution statement setting out the beneficiaries’ entitlements and how the estate is being distributed.
They should be informed of any legal proceedings against the deceased, or any challenges to the will.
Please note: beneficiaries have no rights or interests in the deceased’s estate until the executor or administrator has distributed and dealt with the deceased’s assets and debts. Beneficiaries are only entitled to sue an executor or administrator where the executor or administrator has failed to administer the estate diligently and properly.
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What kinds of disputes can arise between executors and beneficiaries?
Disputes can arise because the executor has not discharged their duties effectively or appropriately.
For example, beneficiaries may go for months or even years without receiving any of their entitlements from the executor (or any information at all).
Disputes can also arise when a beneficiary disagrees with a decision made by the executor.
For example, the executor may plan to sell the deceased’s home, while the deceased’s loved ones would prefer to keep the property or continue living in it.
The executor unilaterally deciding their own remuneration. While an executor is entitled to be paid, the specific amount of that remuneration is either set out in the terms of the will, or must be agreed to by the beneficiaries.
Disputes may also arise over how the will should be interpreted.
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How are disputes between the two sides resolved?
1. The executor and the beneficiaries can first attempt to mediate the dispute between them
2. If mediation is unsuccessful, the dispute can be resolved through the court
3. The court will review and give directions to the executor, requiring the executor to take steps such as distributing the property in accordance with the will within a specified time.
4. If the executor has caused loss to the estate, the court also has the power to hold the executor liable, and may even remove the executor from their role.
Whether as a beneficiary who objects to the will, or as an executor who is being challenged by a beneficiary, it is advisable to seek the help of a professional lawyer.
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What if the executor fails to carry out their duties?
The distribution of a deceased person’s estate is supervised by statute and common law authority, and the deceased’s intentions should be respected and followed when distributing the estate.
The executor of an estate is usually named in the deceased’s will. If a person dies without a will or without a valid will, or if the executor is unable or unwilling to act in distributing the estate and carrying out their duties, the Supreme Court may appoint an administrator to administer the deceased’s estate.
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The benefits and necessity of a grant of probate
An executor may be required to prove that they are authorised to administer the will before the estate can be distributed. This can be shown through probate — the grant of probate demonstrates that the executor is authorised to administer the will.
To obtain a Grant of Probate, the executor must apply to the relevant probate division of the Supreme Court. If the application is granted, this confirms the authenticity of the will and shows that the executor is the person authorised to administer the deceased’s estate.
If the court appoints an administrator to administer the deceased’s estate, the administrator will need to obtain a Letter of Administration before the deceased’s estate can be distributed.
Final thoughts
The administration of a will and the distribution of an estate is a complex and lengthy process. Executors may face challenges from beneficiaries if they fail to distribute the estate diligently and in a timely manner; and beneficiaries may also be dissatisfied with how the estate is distributed. For that reason, it is very important to have a clear understanding of the rights, duties and responsibilities of an executor or a beneficiary. Where a dispute does arise, it is also strongly recommended to seek the help and guidance of a legal professional so that the estate can be dealt with properly.
