Transmission of Estate assets
It is paramount that the Executor effect a transmission of estate assets from the deceased to the executor upon obtaining probate as part of the Executor’s duty to preserve, safeguard and maintain estate assets for the benefit of the Estate and the persons who take such assets as beneficiaries under the will.
Preserving and maintaining estate assets
The Executor’s duty is to preserve and maintain estate assets including, where appropriate, insuring estate assets from risk of loss, damage or destruction. An executor who fails to do so may be personally liable for loss to the Estate and/or the beneficiary to whom the asset is to be gifted.
Payment of testamentary expenses and estate debts
The executor is responsible for payment of testamentary expenses and the debts of the deceased including any taxes that the deceased or the Estate may be liable to pay. Normally, the testamentary expenses and estate debts are paid out of the residue of the Estate unless the will charges specific estate assets with such expenses.
Publication of the notice of intended distribution
To protect the executor against future claims about which he or she had no knowledge prior to distributing the estate a notice of intended distribution is published online at https://onlineregistry.lawlink.nsw.gov.au.
An executor who fails to give such notice and makes a distribution to beneficiaries of the Estate may be personally liable for an Estate debt or claim.
Payment of legacies and transfer of specific assets
Payment of legacies and the transfer of estate assets is made after all testamentary expenses have been paid or allowed for by the Executor. An interim distribution may be made by the Executor to beneficiaries of the Estate if adequate provision has been made for estate debts and funeral expenses and any taxes.
Legacies paid to minors are usually paid to the guardian of the minor and an indemnity or release given by the guardian on behalf of the minor.
Transfer of the residue of the Estate
The transfer of the residue of the Estate takes place after all estate debts, funeral expenses and taxes have been paid. It is at this point that any testamentary trust created under the will takes effect and the Executor if appointed as trustee of a testamentary trust changes roles from executor to trustee.
Finalisation of the Estate – preparation of Estate Accounts
It is prudent for Estate accounts to be prepared by the Executor as a financial record of the Executor’s administration of the Estate and the distribution of Estate assets made by the Executor.
The accounts normally comprise a statement of receipts and payments made by the Executor in the course of his or her administration of the Estate and a record of distributions made to each beneficiary including transfers of assets specifically gifted to a beneficiary.