Losing a loved one can be a distressing and emotional event. It can also present particular challenges if you have been appointed as a legal personal representative to administer the financial and business affairs of the person that has passed away.
Being appointed as an executor or trustee under a Will is an honour and suggests that the person that has passed away held you in high regard and entrusted you to carry out their wishes. It is also a position that carries a great deal of responsibility.
Where do I start?
Sometimes it is difficult to know where to start when faced with this responsibility. While you will usually need to seek professional legal assistance to apply for a Court authority (e.g. grant of probate, letters of administration) and to carry out the formal administration of the estate, there are some things that you can do before visiting a lawyer that will assist to make sure the process runs as smoothly as possible.
Here’s a checklist to help you get started (in South Australia):
1. Early Planning
If you know that someone has appointed you as an executor under their Will, it is a good idea to become reasonably familiar with their affairs so that you are better prepared to carry out your responsibilities when the time comes. The level of preparation will depend on the complexity of the person’s affairs and their preparedness to disclose certain information to you. If possible, you should ask for a copy of the Will and ask the person to notify you if they make a subsequent Will or changes to their current Will. You should ask for details of where you might locate their personal records/ documents if the need arises (e.g. safety deposit box, filing cabinet) and encourage the person to keep their records in order and filed together in one place as this will greatly assist you to undertake your responsibilities.
2. Arrange the Funeral
As an executor you will have the responsibility to arrange the person’s funeral. You should check whether the person has a pre-paid funeral plan in place or has set funds aside for payment of the funeral expenses. Alternatively, it may be possible to approach the person’s superannuation fund for payment of the expense. If you or another person pay for the funeral expenses, then this should be reimbursed from the estate as part of the formal administration process.
3. Obtain the Original Death Certificate
The funeral director will often make the appropriate application for a death certificate to be issued by the Births, Deaths and Marriages Office. Once issued, the original certificate should be provided to the executor(s) and you should keep the Certificate in a safe place. You will need the certificate for various administrative purposes and so it is a good idea to make a number of certified photocopies of the Certificate. The Certificate can usually be certified by a Justice of the Peace or a solicitor and some other professionals – you should check with each institution that you will be dealing with (e.g. bank, tax office, superannuation fund) as to what their rules are for accepting certified copies of documents.
4. Gather the Documents
You will need to ensure that you take possession of the person’s records including the original Will (or at least determining where the original Will is being held), banking records, property ownership records, insurance records etc. You must also keep these records safe and secure. If you are in possession of the original Will, it is very important that you do not tamper with the Will in any way (for example, do not place any paperclips on the Will, remove any staples or make any markings – not even in pencil – on the Will).
5. Secure Property
If the person owned any assets such as a house or car, then you need to ensure that this property is secure. For example, if their house is now unoccupied, then you may need to consider changing the locks to the house and putting appropriate security measures in place to ensure that no one gains unauthorised access to the property or the person’s personal effects (as these items will need to be dealt with in the formal administration process of the estate). Part of securing the property may involve maintaining any insurance policies that are in place. While you should notify the insurer of the person’s death, you should not cancel a policy without replacing it with similar coverage.
6. Notify Third Parties
It is important to start notifying relevant third parties of the person’s death as soon as possible and to ensure that any future correspondence is sent to you (or one of the other executors). Lodging a mail re-direction application with Australia Post may be helpful. The relevant parties to notify will largely be determined by the particular affairs of the person but may include their:
- Bank
- Trustee of the person’s Superannuation Fund
- Accountant
- Australian Taxation Office (using a “Notification of Deceased Person” form available at www.ato.gov.au)
- Health or life insurance provider
Most of these parties will need to sight a certified copy of the person’s death certificate, the Will (Note: make sure that the original Will is not tampered with when making copies – see point 4 above) and your identification before taking any steps to note the person’s death and record you as the relevant contact person.
If possible, you should also commence the process of cancelling non-essential services (e.g. phone service, cable TV, subscriptions, memberships etc.) so that the estate does not continue to incur unnecessary liabilities.
Depending on the value of the person’s estate, there will be a limit on what you can do before you have obtained formal authority from the Court (e.g. grant of probate, letters of administration). It is important that you do not ‘intermeddle’ in the estate (e.g. distribute assets) before you have received this authority. Any actions that you take must be for the ultimate benefit of the estate. For example, you may pay off an expensive loan debt using available funds to ensure that the estate does not continue to incur unnecessary interest and bank fees.
7. Open a Separate Bank Account
It is often a good idea to open a separate bank account for the estate which is kept solely for the purpose of collecting the estate’s funds and paying estate expenses. You should not mix the estate’s funds with your own. If you pay any of the estate’s expenses from your own funds, make sure you keep records so that you can be reimbursed from the estate once you have received authority from the Court.
8. Conduct some Searches
Some of the person’s assets may not be immediately identifiable from their personal records so it’s a good idea to conduct some preliminary searches. A good place to start is the MoneySmart website where you can do an ‘Unclaimed Money’ search. You can also conduct an ‘Unclaimed Superannuation’ search online through the Australian Taxation Officewebsite. It’s also possible that some unclaimed money may be held by State government agencies (in South Australia, the relevant agency is the Department of Treasury and Finance) or unclaimed wages may be held by the Fair Work Ombudsman. While these searches may assist you in identifying where funds may be held, some institutions will not release any details unless you are able to provide a relevant Court authority.
9. Keep Detailed Records
You must keep detailed records of everything that you do at this early stage. You are legally obliged to ensure that you can properly account to the Court and the estate’s beneficiaries for the steps that you have taken. It will also make the process of instructing a lawyer and the formal administration of the estate much more efficient if you keep the estate records together in one place and in order.
10. Instruct a Lawyer
Once you have put these interim steps in place, you should obtain professional legal advice as to what steps need to be taken in the formal administration of the estate. This will usually involve making an application to the Probate Registry of the Supreme Court to obtain a grant of probate. When visiting the lawyer, make sure you bring the original Will, the original death certificate and the estate’s records (or at least a detailed list of all of the assets and liabilities that you have identified to date). The lawyer will then be able to guide you through the next steps of the process and answer any questions that you have.
For further information, please contact the author.
This article is posted in Adelaide, South Australia by Tri-meridian Corporate & Commercial Law and is intended to be used as a guide only. It is not, and is not intended to be, advice on any specific matter. We do not accept responsibility for any acts or omissions resulting from reliance upon the content of this article. Before acting on the basis of any material in this article, we recommend that you consult your professional adviser.
