By Hayley Boud
What is an executor? If you have been named as the executor of a will you are responsible for ensuring the deceased’s wishes stated in their will are carried out. Your responsibilities include applying for probate where needed (obtaining an order from the Court approving you as executor of the estate), finding and informing all the beneficiaries, paying the debts, selling the assets and keeping a good record of financial statements.
What is a trustee?
As trustee you are responsible for holding the deceased’s assets until they can be distributed to the beneficiaries. Usually this is for six months to ensure no claims are made against the estate before the assets are distributed. However, holding the assets could be for much longer. For example, where the beneficiaries of a will are children and the will has stated the children will not receive the assets until they reach the age of 21 years.
What are the tasks that I need to do as an executor?
Here is a list of things that you will need to do:
Obtain the deceased’s latest will (you will need the original will to apply for probate which is usually held with the deceased’s lawyer);
Funeral arrangements (the will usually provides for the deceased’s wishes and for funeral expenses to be paid from the estate);
Apply for probate (where appropriate, more information on this below);
Make a list of all the beneficiaries;
Make a list of the deceased’s assets (if the deceased’s financial affairs were managed by their accountant, then you should consult with the accountant on this);
Make a list of the deceased’s debts (to find out the deceased’s debts, you could place a notice to creditors in newspapers, contact the deceased’s banks, go through the deceased’s mail etc);
Contact the deceased’s banks, insurers, share registries, KiwiSaver provider, utilities providers and arrange for accounts to be closed, services cancelled etc.
Arrange for any tax owed by the deceased and their estate to be paid (contact Inland Revenue to check whether there is tax to pay or a refund).
Can I get paid to be an executor?
Executors can only get paid if this is provided for under the will or by legislation as with the Public Trust and other trustee corporations.
Can I get out of being an executor?
Yes, if you decide you do not want to accept the position of executor, you can renounce the position by deed or by conduct. It is not necessary to renounce by writing. You may renounce in person but you have to swear that you have not (and will not) intermeddle with the estate’s property. If you refuse to take office and also the oath renouncing office, it will be deemed as a refusal. A refusal to take office as executor within three months of death allows applications by any other executor or person with an interest in the estate.
It should be noted that you cannot decline to be an executor once you have accepted to take appointment. Examples of where an executor has deemed to have accepted the appointment include applying for probate, administering the estate, taking possession of the deceased’s property (not just for safe keeping), discharging a debt owed to the deceased, sending a letter to the insurance company authorizing it to pay debt, giving funeral directions, advertising for creditors to send their accounts.
What is Probate?
Probate is an order from the High Court of New Zealand confirming the will as valid and granting the executor the legal authority to deal with the deceased’s estate.
How do I apply for probate? In order to apply for probate, you will need to draft an application to the Wellington High Court in accordance with the High Court rules. Click here for the specific rules.
We recommend you obtain legal assistance from a lawyer who specialises in this area of law as we can guarantee it will save you time and money in the long run.
If no one is contesting the will, you would apply for probate “without notice” which means you are not required to notify anyone else that you are applying. This is known as an application for “probate in common form”. There is a fee of $200 to file the application in the High Court. You will also need to provide the following:
The original will; and
An affidavit (your statement sworn or affirmed before a lawyer, registrar or JP) containing evidence that the will-maker has passed away, where the deceased was living at the time of death and that the will is the deceased’s last will.
Once filed, the process will take a few weeks before probate is granted (usually four weeks but it could be longer if the High Court is busy or the deceased’s situation is more complicated).
If someone is contesting the will, you will need to apply for probate “in solemn form” and there will be a trial in the High Court.
You can check the progress of your probate application by calling the Courts of New Zealand on 0800 268 787.
Is Probate always required?
Probate is not required where the only asset is land and that land is jointly owned with another person (e.g. the deceased’s spouse). In such cases, the property passes automatically to the surviving joint owner. However, the title to the land will need to be amended on Land Information New Zealand (LINZ) as this will not automatically happen. Feel free to contact us for more information on how to amend the title.
Furthermore, you may not have to apply for probate if the deceased’s estate is small and there is no interest in land.
Where there is less than $15,000, the following may be transferred directly without the requirement of probate:
The deceased’s bank accounts;
Shares;
Life insurance policies;
Government stock; and
Local authority stock.
It is likely you will need to provide evidence of the death (e.g. certified copy of the death certificate).
Even if probate isn’t required, I would recommend you talking with a lawyer to determine whether you should consider applying anyway. This might be appropriate in cases where the will is likely to be contested.
Do I need a lawyer to apply for probate? You are under no obligation to use a lawyer but we recommend you get one and not just any lawyer, a lawyer who specialises in that area of law. This is because all the documents have to be drafted in a very specific way in accordance with the High Court rules. Any small mistake will mean the High Court will reject the application and you will need to start the process again. Obtaining a good lawyer to apply for probate on your behalf will reduce your stress, save time and potentially money.
What happens if someone makes a claim on the estate?
Under the Property (Relationships) Act 1976, a spouse/partner has six months following the grant of Probate to challenge the deceased’s provision for that spouse/partner under the deceased’s will. If you distribute the Estate within the six months of grant of Probate you may be personally liable to meet the surviving spouse/partners relationship property claim.
Under the Family Protection Act 1955, an immediate family member may allege that the deceased has not made proper and adequate provision for the proper maintenance and support of his/her family. The Courts have ruled that parents have a moral obligation to their children to make provision for their children in their will (including adult children). A claimant must make an application to the Court within twelve months from the date of Grant of Probate.
Under the Law Reform (Testamentary Promises) Act 1949, a person may allege that the deceased had promised to reward past or future services or work undertaken for the deceased by that person by including such a reward in the deceased's will and that the deceased has failed to make such a provision. A claimant must make an application to the Court within twelve months from the date of grant of Probate.
Other claims include that the will is invalid (e.g. incorrectly witnessed or the deceased lacked capacity). The estate assets cannot be distributed until the claim has been settled.
It is important to note that if a claim is brought within six months of probate being granted and you as executor have already distributed the assets of the estate, you can be held personally liable. If the claim is brought after six months of probate being granted, you as executor will not be personally liable and the funds from the estate will be used to settle the claim.
How long should I wait before distributing the estate’s assets?
It is best to wait for six months after probate has been granted before distributing the estate’s assets to avoid being personally liable as the executor. However, there may be circumstances where it will be appropriate to distribute earlier. We recommend you seek legal advice if you are considering distributing earlier.
Do I have to distribute the property in accordance with the will?
It is your job as executor to ensure the deceased’s wishes stated in the will are fulfilled. However, where all the beneficiaries are adult and all consent to changing the way in which the property is dealt with, you may do so. In such cases we strongly recommend you obtain legal advice so as to protect you from any possible claims.
What do I do if there is not enough money in the estate to cover what is given under the will?
Where the deceased has gifted property that they no longer owned when they passed away, that gift will have no effect and the person receiving it under the will can no longer receive it.
If the total amount of money gifted in a will is more than the amount of the estate then the estate debts must first be paid and then each beneficiary will receive their share of the money on a proportional basis.
What if I make a mistake, can I be held personally liable?
Section 47 of the Administration Act 1969 protects an executor from liability for making distributions from an estate if the distributions were properly made. However, you cannot rely on the protection of section 47 if you improperly distributed some or all of the estate. A distribution is considered improper if it is:
not made in accordance with a trust, power or authority existing at the time the distribution is made;
before the expiry of six months from the date of grant of probate; and
after being served notice of a claim against the estate (or being made aware of the intention of a claim being brought against the estate).
A recent case held the executors were personally liable even though they had distributed the estate after the six months period and had not received any claim against the estate within that time. The judge determined that the executors should have known that the only daughter of the deceased who was not aware her mother had passed away and had received only 1% of the estate under the will would contend it once she was made aware. The judge awarded the claimant $335,000 to be paid by the two executors personally.
Seek legal help immediately
Being an executor is not an easy task, it can be time-consuming, demanding and stressful. Furthermore, if you make a mistake, you can be held personally liable. As such, we recommend seeking legal advice immediately.
It is also important to note, that the information on this blog is provided as a general guide about an executors’ role. Everybody’s situation is unique and varies depending on the will, the estate, property and persons involved. As such, we recommend you seek legal advice on YOUR specific situation.
For further information please feel free to contact us on 07 838 0808 or hayley@ghlaw.co.nz