The deceased’s estate pays funeral expenses, legal and accounting fees, any outstanding debts, and any accounts that become due, such as utilities and phone.

Obliging people accept the role of executor when close friends or family are creating their Will. This position is often accepted with little further thought, with nothing required of them until the death of the Will-maker years or decades later.

Unless the deceased is a spouse or partner, the executor is unlikely to have access to the deceased person’s bank account numbers and utility providers.

While the estate must pay all expenses in the long run, the executor must satisfy all financial demands in the short term.

Possible expenses

The expense of funeral arrangements may be eased if the deceased has put in place a pre-paid service to cover costs. If not, this can be a significant expense.

If the deceased had a large and complex estate or individual ownership of assets, it may be necessary to apply for probate. Applying for probate is a court process that:

1. Gives formal validity to the Will, and
2. Formally gives the executor the authority to administer it.

Costs include substantial Supreme Court of NSW filing fees.

Until probate is granted, which generally takes several months, there may be immediate demands on the executor to settle outstanding accounts.

An estate’s possible expenses include:

1. Outstanding credit card debts;
2. Accountant fees to finalise tax and business accounts;
3. Council rates, and possible costs to maintain the property;
4. payments for regular accounts such as phone, internet, council rates and insurance;
5. Utilities such as electricity and gas.

The payment of the above costs falls to the executor. These accounts may have to be paid from their personal funds if payment cannot be delayed until after a grant of probate has been obtained.

While an executor may have lived close to the deceased when they accepted the role, they may since have moved, potentially requiring the estate to pay the executor’s travel and accommodation expenses.

Right of survivorship

If the deceased has a surviving spouse or partner it may simplify things. A bank account in joint names will automatically pass to the surviving account holder on provision of a death certificate. This gives the executor access to funds immediately.

Take-aways

Executors should:

1. Keep a clear and accurate paper-trail of all costs and outgoings with invoices and receipts; and
2. Get professional advice from an experienced lawyer.

Payment of all debts, fees, and costs is the executor’s responsibility and must be handled properly, ideally without needing to pay out of one’s own pocket. Methodically working with experienced professionals is the best way to administer the estate.

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Contact us for help and support administering a bankrupt estate or managing estate debts.