Being appointed as an executor is both a responsibility and a legal office. In Victoria, an executor stands in a fiduciary position: they must administer the deceased’s estate honestly, prudently and impartially, in accordance with the will, the Administration and Probate Act 1958 (Vic), the Trustee Act 1958 (Vic) and the general law. Where an executor departs from those duties and loss results, they may be personally liable. That does not mean every mistake automatically gives rise to liability — the position is more nuanced than that — but it does mean the role should be approached carefully and, where the estate is not straightforward, with professional advice.
This guide sets out the main duties of an executor in Victoria, from death through to final administration, and explains when personal liability can arise. For related reading, see What is probate and when is it required in Victoria?, How long does probate take in Victoria? and Probate costs in Victoria.
The executor’s role in outline
An executor’s authority derives from the will, and (where required) is confirmed by a grant of probate from the Supreme Court of Victoria. Broadly, the executor must:
- locate and preserve the original will and any codicils;
- arrange or authorise the funeral, and secure the deceased’s residence and personal effects;
- identify, value and safeguard the estate’s assets;
- apply for a grant of probate where one is required to deal with the assets;
- identify and pay the deceased’s debts, funeral and testamentary expenses;
- attend to the deceased’s final personal tax return and any estate tax returns;
- keep proper accounts of receipts, payments and dealings with estate property;
- act impartially between beneficiaries, and avoid conflicts between the executor’s duty and personal interest;
- distribute the residue in accordance with the will and the general law.
These are legal duties, not administrative preferences. They apply from the date of death, even before a grant issues.
Locating the will and taking initial steps
The starting point is the original will. The executor should locate it, read it carefully, and consider whether they are able and willing to act. An executor is not compelled to accept the office; renunciation is possible, but generally only before the executor has intermeddled in the estate (that is, taken steps that amount to acting as executor). Once intermeddled, an executor may find they cannot cleanly step back.
Early practical tasks include notifying close family, arranging the funeral, obtaining certified copies of the death certificate, securing the deceased’s home and valuables, redirecting mail, cancelling recurring services where appropriate, and beginning to make enquiries of banks, superannuation funds, share registries and Land Use Victoria to establish the assets and liabilities as at the date of death.
Protecting and identifying assets
The executor must take reasonable steps to identify and protect the estate. That includes ensuring real property is properly insured and secured, safeguarding chattels of value, obtaining date-of-death balances and valuations, and keeping a clear record of the estate inventory. Where investments are involved, the executor should consider whether they need to be preserved, converted or held pending distribution, exercising the powers of investment in the will and under the Trustee Act 1958 (Vic).
Digital assets, intellectual property and contractual rights
Part of identifying the estate is looking beyond bank accounts and real property. An estate may include copyright and other intellectual property, royalty or licensing income, debts owed to the deceased, refunds and rebates, unclaimed money, and the benefit of contracts capable of passing on death. Online accounts need particular care: domain names, business and trading accounts, cryptocurrency holdings, media libraries and subscriptions differ in whether they represent property at all, and access is governed by each provider’s terms. The prudent course is to identify the accounts early, secure credentials lawfully, avoid logging in as the deceased where the terms prohibit it, and follow each provider’s deceased-account process rather than self-help.
Distinguishing estate assets from entitlements that may pass outside the estate
An executor administers the estate, not everything connected with the deceased. A superannuation death benefit is dealt with in the first instance under the fund’s trust deed and trustee rules; it is not automatically an estate asset, and it may be paid directly to a dependant or, alternatively, to the legal personal representative. Insurance depends on who owned the policy, any nomination and the policy terms. Treating such a payment as estate money when it is not — or distributing it under the will when it was never subject to the will — is a real source of executor exposure. Each fund and insurer should be contacted separately and its position confirmed in writing. Our guide to what forms part of a deceased estate in Victoria works through these categories.
Companies, businesses, partnerships and trusts
Where the deceased was involved in a company, business or trust, the executor must distinguish the entity’s property from the interest the deceased actually held. Company assets belong to the company; what usually forms part of the estate are the shares, loans owed to the deceased and accrued entitlements — and dealing with shares can be constrained by the constitution or a shareholders’ agreement. Trust assets belong to the trust, but a loan account, units, an unpaid distribution, the office of trustee or a power of control may still need to be addressed under the deed. Partnership interests are governed by the partnership agreement, which may deal with dissolution, continuation and payment out. Business continuity, employees, leases and licences often require attention before a grant issues.
Testamentary and continuing trusts
Not every administration ends with a distribution. A will may create a testamentary trust, or direct that a beneficiary’s share be held until a stated age or for a beneficiary under a disability. Where that is so, the executor’s role may continue as trustee, with ongoing duties of investment, record-keeping, tax lodgement and even-handedness between beneficiaries — a materially different and longer commitment than a simple estate. The terms of the will govern, and advice should be obtained about the trustee’s powers before funds are invested or applied.
Obtaining the grant where required
A grant of probate is not required for every estate. Whether one is needed depends on the nature and value of the assets and the requirements of each asset holder. See What is probate and when is it required in Victoria? for the framework, and current Supreme Court of Victoria Probate Office guidance for procedural requirements. Where a grant is required, the application is made under the Supreme Court (Administration and Probate) Rules 2023 (Vic), preceded by a notice of intended application published through RedCrest-Probate at least 14 days before filing.
Identifying liabilities, debts and tax
Before distributing the estate, the executor must identify and pay the deceased’s properly payable debts and expenses. In practice this includes funeral and testamentary expenses, outstanding utility and credit accounts, mortgages and secured debts, Commonwealth debts (for example, Centrelink or ATO amounts), and any judgment debts. Where the estate may be insolvent, the executor should obtain advice before making payments, because insolvent estates are administered in a particular statutory order and paying the wrong creditor first can attract personal liability.
Taxation is an area where executors are frequently exposed. The executor is generally responsible for lodging the deceased’s final personal tax return to the date of death and, where the estate continues to derive income, an estate (trust) return for each income year of administration. Capital gains tax issues can arise on the transfer or sale of assets. Accounting or tax advice is often prudent, particularly where there is business income, foreign assets, self-managed superannuation or significant capital gains.
Creditor protection and section 33 notices
The Trustee Act 1958 (Vic) provides a mechanism by which an executor may publish a notice inviting creditors and claimants to send in particulars of their claims within a time fixed in the notice, which must be not less than two months, and then distribute the estate having regard only to the claims of which the executor has notice. Section 33 is a protective procedure, not a universal cure. It does not extinguish any claim; it protects an executor who has distributed after complying with the notice procedure. It is not required in every estate, and it does not answer risks such as Part IV family provision claims or contested-will proceedings. Whether such a notice is appropriate depends on the estate and should be considered on advice.
The distinction matters to beneficiaries as well as executors. A creditor who does not respond to a notice does not thereby lose the debt: the creditor may still be able to pursue the assets in the hands of those who received them. What the procedure can do, if properly followed, is protect the executor personally for a distribution made in accordance with it. Executors should not treat a notice as a licence to distribute early, and should not describe it to beneficiaries as extinguishing claims.
Keeping proper accounts
An executor must keep clear and accurate accounts of estate receipts, payments and dealings. Beneficiaries with a proper interest are entitled to information about the administration, and the Supreme Court may in appropriate cases require an executor to file accounts. Poor record-keeping is one of the most common sources of dispute between executors and beneficiaries, and it makes defending the administration significantly harder if a challenge is made later.
Acting impartially and avoiding conflicts
An executor owes duties to all beneficiaries, not only to those they are close to. They must not prefer one beneficiary over another except as directed by the will, and must not use the office to obtain a personal benefit beyond what the will or the law allows. Where the executor is also a beneficiary — which is common — the two hats must be kept distinct, and any transaction between the executor personally and the estate (for example, purchasing an estate asset) requires particular care and, ordinarily, informed consent or Court approval.
The executor’s year and Part IV time limits
Two distinct periods often affect the timing of distribution and are commonly conflated:
The executor’s year. Section 49 of the Administration and Probate Act 1958 (Vic) provides that, subject to the earlier provisions of that Act, a personal representative is not bound to distribute the estate of the deceased before the expiration of one year from the death — the “executor’s year”. This is a period traditionally allowed for administration; it is not a compulsory waiting period, and it is not an automatic statutory deadline by which distribution must occur. The executor may distribute earlier where prudent, or take longer where the estate requires it.
The Part IV limitation period. Under section 99 of the Administration and Probate Act 1958 (Vic), an application for family provision under Part IV of that Act must generally be made within six months after the grant of probate or letters of administration — not from the date of death. Executors commonly defer final distribution until that six-month period has expired, because distributing earlier exposes the executor to personal risk if a claim is subsequently made. A beneficiary’s indemnity does not automatically answer that exposure.
Neither the executor’s year nor the Part IV period, on its own, determines the proper distribution date. The right time to distribute depends on both, together with the state of administration, the debts, the tax position and any known or foreshadowed claims. See How long does probate take in Victoria? and What is a Part IV claim in Victoria?.
Distributing prudently
Distribution must be in accordance with the will (or the statutory intestacy rules in an intestate estate). Before making distributions the executor should be satisfied that debts and expenses have been paid or provided for, that tax obligations have been addressed, that the Part IV period has been considered, and that any specific gifts and legacies are properly identified. Interim distributions are sometimes appropriate where the estate is clearly solvent and a portion can safely be released, but any such distribution should be made only with a proper understanding of the associated risks.
When personal liability arises
Executors are not guarantors of every outcome, and honest mistakes do not automatically produce personal liability. Personal liability typically arises where an executor breaches their duties and loss follows. Common risk areas include:
- Premature or improper distribution — distributing before debts, tax or Part IV exposure has been properly addressed, so that a legitimate claimant is left unpaid;
- Failing to identify or pay debts and tax — missing a creditor, paying the wrong creditor first in an insolvent estate, or failing to lodge or fund the estate’s tax obligations;
- Loss caused by unreasonable delay or mishandling — for example, allowing an asset to deteriorate, letting insurance lapse, or failing to realise or invest assets appropriately during administration;
- Conflicts and self-dealing — dealing with estate assets in a way that prefers the executor’s personal interest without proper authority or consent;
- Breach of trust and misapplication of estate property — using estate funds otherwise than for proper estate purposes;
- Litigation costs — while an executor is generally entitled to be indemnified out of the estate for properly incurred costs, the Court may in some circumstances order that costs be paid personally, particularly where the executor has acted unreasonably.
The Trustee Act 1958 (Vic) contains provisions by which the Court may relieve a trustee (including an executor) from personal liability where they have acted honestly and reasonably, and ought fairly to be excused. That is a discretion, not a right, and is not a substitute for careful administration.
When to obtain professional advice
Not every estate needs detailed legal advice at every stage. As a general guide, an executor should consider obtaining legal, accounting or tax advice where:
- the will is informal, unsigned, altered or unclear, or only a copy can be found;
- the estate includes a business, a farm, self-managed superannuation, or foreign assets;
- the estate may be insolvent, or debts are large relative to assets;
- a Part IV claim has been foreshadowed or is realistically possible;
- beneficiaries include minors, people under a disability, or blended-family interests;
- there is a dispute about the will or the administration;
- the executor is contemplating early distribution, or the sale of an asset in which they have a personal interest; or
- the executor is unsure of their duties or wants to be properly protected before acting.
Getting help
Holt & Macdonald’s Ringwood office regularly acts for executors and beneficiaries in the administration of Victorian estates. If you have been named as an executor, or you are already administering an estate and want a considered view of your position, please contact us on (03) 9871 9300 or holtmac@holtmac.com.au. Our Executor Checklist for Victoria sets out the practical steps stage by stage, and our Probate & Deceased Estates page describes how we can help.
