Legal Tip 56: Duties of an Executor of an estate

Discussion in 'Legal Issues' started by Terry_w, 13th Aug, 2015.

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  1. Terry_w

    Terry_w Structuring Lawyer and Finance Broker - all states Business Member

    18th Jun, 2015
    Duties of an Executor of an estate

    The ‘executor’ is the person or persons who administer the estate of a deceased and who are appointed by will. An ‘administrator” is the person appointed by a court when there is no will.

    Being an executor of a will is serious stuff. Executors can be personally liable for mistakes they make. They have duties to administer the estate in a way that maximises it. All debts must be called in and they must seek the deceased’s superannuation to be paid to the estate. If there are outstanding loans they must be called in - forgiving loans when they legally don’t need to be forgiven can result in the estate being diminished and the executor liable for the loss.

    A conflict can arise because of the issues with super. The executor may be a spouse of the deceased for example. They must cause attempt to obtain the superannuation death benefits of the deceased to be be paid into the estate.

    but at the same time they will be a dependent of the deceased and would possibly want the superannuation to be paid to them directly, bypassing the will. This could mean more money in the spouse's hands as the will may direct the super elsewhere.

    If the spouse chooses the second option and does not seek to have the super paid to the estate, would they be breaching their duties as executor of the estate? YES they would. Failure to do so would be a breach of fiduciary duties. A beneficiary of the estate could sue the spouse for the money the estate missed out on.

    This the case where something like this actually happened (involving a mother rather than a spouse) McIntosh v McIntosh [2014] QSC 99

    So when you are an executor of an estate and also a potential beneficiary of the superannuation death benefits you should seek legal advice asap.

    The issue could be avoided completely by the deceased having made a binding death benefit nomination for their super.
    Gingin likes this.