Can an Executor be a Beneficiary? | Rose Lawyers

Can an Executor be a Beneficiary?

Wills & Estates - Can an Executor be a Beneficiary?

Rose Lawyers on 4 August 2020

Ever wondered what an executor of a Will does, what their rights and responsibilities are, if they can be a beneficiary of a Will and if they charge anything?

Drawing on more than 35 years of experience and caring service to our clients, we have put together this comprehensive guide that will answer any questions you may have about executors and beneficiaries of a Will. You will learn definitions of common and complicated terms relating to Wills and Estates and our explanations will leave you with a clear understanding of where beneficiaries and executors fit into the picture.

 

Will beneficiary

A beneficiary of a Will is an individual, a charity or an organisation who benefits from assets of a deceased estate such as a house, car, property or any other valuable bequests in a Will.

Who are beneficiaries?

Beneficiaries are usually direct family; your spouse, children, parents and other relatives. If you don’t mention family beneficiaries in your Will, they have the right to contest an unfair Will. The court will decide if their complaint is valid or not and can order that the assets go to them, regardless of what you said in your Will. Your estate may be held liable for any subsequent costs.

What are the rights of beneficiaries?

Whether beneficiaries are left property, money or any other valuables, they don’t have the right to make any general enquiries about the Will. However, they can request feedback from the executor if matters take longer than expected to be finalised. If beneficiaries have any specific wishes regarding funeral arrangements, they can discuss it with the executor who may have information of any other preferences mentioned in the Will.

If a beneficiary is left a property in the estate that generates an income, such as rental or shares, this income is due to them from the date of the Will maker’s death. However, they are also responsible for all the property maintenance costs.

Excluding a beneficiary from your Will

If you want to exclude a specific family member from your Will, it’s best to talk to a lawyer for professional advice to manage your Will and estate affairs. You should also write a letter of explanation to inform your executor of the reasons for your decision.

 

Consider these points when making a Will

If the property in your Will is not paid up when you die, your beneficiaries will have to continue payments unless you have insurance to settle any outstanding amounts.

Take into account the likelihood of you still owning any stipulated assets when you die.

You have options to either combine the value of your assets and divide it as percentages or leave them behind as specifics.

Ensure cash amounts you bequeath is enough to cover any costs related to your Will.

You can establish a testamentary trust under your Will. It is managed by a trust rather than an individual and allows flexibility for how capital and income generated by those assets is distributed.

If you die without a valid Will, intestacy applies, which could cause financial distress to those left behind. Read here about the changes to intestacy laws in Victoria and how it may affect you and to make sure your Will is valid.

Adding a residuary clause to your Will sorts out anything else that may be left over in your estate and it can avoid conflict between family members or friends. Beneficiaries with a share in the residuary estate have the right to:

  •  A copy of the will, statement of assets and liabilities, and annual accounts.
  • An inspection and valuation of the assets.
  • Any costs are the for the beneficiaries’ account.

 

Role of the Executor

An executor of a Will is a person or trustee company identified in your Will as the entity who manages your estate after you have died.

Who can be an executor of my estate?

If your spouse or another person is the sole beneficiary in your Will, it is often appropriate to name that person as your sole executor. You can also appoint a family member or friend who is a beneficiary of your estate as executor. Other options are professional advisers or a trustee company.

 

tipUseful tip

It is important to know what happens to your Will after you die, so it is a good idea to have a back up or a second opinion, should your executor not work out for some reason.

 

Can an executor change a Will?

An executor does not have the power to change anything in your Will. They have to follow the exact instructions as set out in the Will. If a beneficiary suspects wrongdoing, they may lodge a complaint with the court who can intervene.

A Registrar of Probates may also take action if needed. An executor may be ordered by a court to act properly and promptly if the beneficiaries believe the executor is at fault.

 

Consider these points when choosing an executor

Ask them if they are willing to take on the role – do they have time for the responsibility?

Do you trust them to allocate the assets of your estate to your beneficiaries?

Are they equipped to deal with any technical or financial issues that could crop up?

Will they be good at mediating if any disputes arise due to asset allocations of the Will?

In the case of such disputes, the executor may need professional help, which could incur costs. Can your estate absorb these?

Consider the age of the executor. If they are much older than you, or unhealthy, they may not be suitable.

If you want a professional executor, you may need to pay them. Consider the cost implications on the estate.

 

Executor of Will duties

As the entity responsible for ensuring your last wishes are performed, an executor of your Will has various duties, depending on whether it is a simple or complex Will.

These duties include:

Seeing to the funeral arrangements.

Ensuring all relevant financial institutions and organisations are informed.

Identifying the extent of the estate and familiarising themselves with the beneficiaries and their expectations.

Following exact specifications in the Will, unless all adult beneficiaries agree to any changes.

Allocating assets to beneficiaries through property transfers or dividing the proceeds through the sale of assets.

Investing funds and managing the assets on behalf of beneficiaries.

Maintaining property in trust, and having it insured and covered for rates and taxes.

Resolving all liabilities and disputes, including any income tax claims.

Keeping thorough records of the estate management and allocation of assets, and distribute summaries to the beneficiaries.

Getting a Grant of Probate, if necessary.

Although the executors can delegate some of their responsibilities out to, for instance, funeral directors, lawyers and accountants, they remain ultimately responsible for the Will.

The executor must perform their duties according to the relevant state-based legislation and not distribute assets prematurely. It’s best to wait until the relevant time passes in the event of a Will being contested.

If an appointed person cannot act as executor, they can sign a renunciation. In such a case, it is best to do so before starting or completing any duties.

 

What is a probate and do you need it?

A probate is a document issued by the Supreme Court to confirm that your Will is valid and to recognise the executor as the person who will be looking after your estate.

In the absence of a legal Will or if an executor is unable to manage the estate, the court appoints an administrator by issuing a document called letters of administration, which is evidence of the administrator’s authority. The procedure for both is similar and your lawyer can advise you of the requirements.

 

Executor beneficiary

It is not uncommon for an executor of a Will to also be a beneficiary of the estate. It’s usually spouses who appoint one another as their sole executor and beneficiary.

The Will maker may also appoint another family member as executor, such as an adult child. This is common, convenient and usually successful, as children have a vested interest in finalising the estate quickly. But, there are certain instances where it may not be the best idea to have a beneficiary who is also the executor.

 

What are the pitfalls?

If a disagreement between family members is probable, it’s maybe better to appoint an independent party to see to your Will’s execution.

Most executors of estates are family members, not professionals, and they often don’t realise the extent of their responsibilities and may not fulfil their duties properly.

 

tipUseful Tip

If you are considering nominating adult children as beneficiaries, keep in mind your own family dynamics and how likely they are to perform their duties adequately and in an unbiased way.

 

Rose Lawyers have been Wills and Estate experts since 1977, and we are here to help you. Call us now if you need expert advice about the role and responsibilities of executors and beneficiaries. Your first 15-minute phone consultation is FREE.

 

  • Phillip Gallo

    Phillip Gallo

    Principal

    A Solicitor and Barrister with diverse experience in many areas of law including Taxation, Commercial and Family Law. Highly regarded by clients for his attention...

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