Sometimes the Executor of a Deceased Estate gets pressure from family and other beneficiaries to do questionable things in the administration of the Estate.
Here are a few of the higher-risk demands frequently directed at nervous Executors by pushy relatives:
1. Obtain a Grant Of Probate As Quickly As Possible
Sometimes relatives and other potential beneficiaries might push an Executor to go faster than they should. Almost always, those beneficiaries will have their own interests at heart, without necessarily considering your rights, duties and responsibilities as Executor, nor the other interests attaching to a Deceased Estate. A prudent Executor might do well to remember the adage: Good. Fast. Cheap. Pick 2.
In South Australia, generally Probate cannot be applied for until at least 28 days after death. In certain circumstances an urgent application can be made faster than this, however special reasons need to be proven.
2. Take Shortcuts
People who do not understand the intricacies of Probate law might attempt to persuade you of the merits of taking shortcuts in the administration of a Deceased Estate, by minimising the importance of gathering necessary information, documenting things properly, and following correct procedures. Those people (possibly innocently, or perhaps recklessly) are encouraging you to take risks for their benefit .
You need to be confident that the full assets, liabilities, income and expenses of the Estate have been determined prior to distributing the Estate. If you do not include all assets & liabilities or incorrectly value some of them, you are exposing yourself personally to significant legal and financial risk.
3. Don’t Instruct A Specialist Lawyer
Probate is a specialised area of law. Don’t be fooled into believing the lady at the hairdresser or the bloke down the pub who says that it is easy to do this yourself, or that the lawyer who handled your divorce, or your uncle’s drink-driving offence, can easily do this. If you pay peanuts, you’re very likely to get monkeys.
4. Don’t Apply For Probate
While Probate is not always required in every Estate, there are generally procedures that have to be conducted in every Estate. Most people will not know whether or not Probate is required, and risk creating substantial legal complications which will need to be sorted out later on. It is far better to take specialist advice to get a Deceased Estate properly administered and fully finalised at an early date. It will be cheaper in the long run, and you have peace of mind that a huge mess won’t be left for another day (at greatly increased expense).
5. Don’t Need Probate Because There’s A Will
Sometimes people will try to tell you that you only need Probate if there is no Will. This is a classic example of a little knowledge being a dangerous thing. In fact it is the other way around: you cannot apply for Probate if there is no Will. If there is a valid Will, then Probate will probably be required.
6. A Formal “Reading of the Will”
Sometimes a “bush lawyer” will attempt to demand a formal reading of the Last Will and Testament of a Deceased person, and try to exert pressure on you to facilitate this for them. These people have probably been brought up on a diet of American television, as some US states use this custom of having a formal reading of the Will; however no Australian State uses this custom.
7. Immediately Distribute The Estate After Probate
Similar to number 1 above, eager beneficiaries may exert pressure upon you to distribute the assets of the Estate as a matter of urgency. The urgency typically lies in their own financial affairs, where they are desperate to get their hands on their inheritance. Be cautious. Claims can still be made against the Estate for up to 6 months afterwards. Has any person indicated that they may wish to contest the Deceased’s Estate, or claim further or better provision under the Deceased’s Will? Has anyone made enquiries as to the financial position of the Estate? These sorts of enquiries would put the prudent Executor on notice that there may be a potential contest of the Will or the Estate lurking in the shadows.
8. Forgive Debts Owed To Or By The Estate
A debt owed to the Estate is an asset of the Estate. An Executor does not have a unilateral authority to forgive or waive such a debt. As Executor, you need to ascertain whether any person or creditor has claimed that the Deceased owed them money; whether the Estate is liable to pay any debts of the Deceased, and the priority of one type of payment over another.
Similarly you need to know whether any potential beneficiary owes any monies to the Deceased and their Estate;
9. Not Call Or Accounting Of Expenditure Made Under PoA
As Executor you need to satisfy yourself as to whether there are any suspicious circumstances surrounding the management of the Deceased’s affairs prior to their death (for example by a relative who had power of attorney to attend to the Deceased’s financial affairs). Sadly, elder abuse is very common, and frequently takes the form of financial abuse of an enduring Power of attorney by an unscrupulous agent who uses their authority under power of attorney to improperly access the Deceased person’s bank accounts prior to death. If there is evidence of improper behaviour by a trusted fiduciary such as the agent under power of attorney, the Executor of the Deceased Estate may have a duty to conduct formal legal enquiries and investigations in an attempt to recover the stolen money.
10. Not Deal with Deceased’s Debts & liabilities
Part of your duty as Executor is to identify, locate and document ALL of the Deceased’s assets and liabilities, which must find expression in the statement of assets and liabilities filed at court as part of the Probate process. If you omit any asset or liability, then this will cause problems later on, and you may be personally called to account for why you have done this. In certain circumstances you may have to make good any amount still owing to the Estate. So don’t be persuaded by an eager beneficiary to cut corners – it probably won’t be their neck on the chopping block if things go wrong later on!
11. Not Finalise Deceased’s Tax
An Executor has the duty to enquire into the Deceased’s tax affairs, and ensure that these are finalised appropriately. Sometimes there will be a refund due to the Deceased Estate from the ATO, and sometimes there will be a tax debt still to be paid. An Executor who deliberately omits this aspect of the administration of a Deceased Estate risks personal exposure to the debts, fines and penalties.
12. Not Honour The Terms Of The Will
Occasionally, beneficiaries might try to persuade an Executor to effectively “rewrite the will”, because they would prefer to receive assets in a manner different to what is expressed in the will. An Executor should be extremely cautious about attempting this exercise, and should only consider doing so with the advice and assistance of a lawyer experienced in the administration of Deceased Estates.
Distributing an Estate too fast, too slow, and without obtaining proper legal advice, can potentially result in you as the Executor becoming personally liable for some serious financial and legal consequences. Don’t risk it. Don’t give-in to those pressures. Protect yourself and the Estate by contacting specialist Probate lawyers Genders & Partners today.
Rod Genders is a senior Australian lawyer specialising in trusts, Wills and estate planning, accident compensation, and probate and deceased estate administration in Adelaide and all over South Australia. His boutique specialist law firm, which was founded on 1848, is one of the oldest and most respected in Australia. Rod is also a prolific author and speaker. Some of his articles and books on Wills, Probate, Trusts, Estate Planning, Asset Protection and Retirement Planning may be found at www.genders.com.au.
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