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.

People often accept requests by close friends or family to be the executor of their Will 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

If the deceased has not put in place a pre-paid service to cover the expense of funeral arrangements, 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 authorises the executor to administer it.

Costs include substantial Supreme Court of NSW filing fees.

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

An estate’s possible expenses can include:

1. Outstanding credit card debts;
2. Accountant fees to finalise tax and business accounts;
3. Council rates, and 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;
6. the executor’s travel and accommodation expenses.

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.

Right of survivorship

If the deceased has a surviving spouse or partner, 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.

Takeaways

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.

Here to Help

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