The role of an executor

The executor plays an essential role in the administration of a deceased estate. An executor has various duties owing to the beneficiaries of the Will as well as the Court throughout the Probate process.
In Wagner v Wagner ^[1] Treston J of the Queensland Supreme Court was required to analyse the role of an executor and determine whether the executors of the estate had met their duties owed to the Court and to the beneficiaries.

What is an executor:

An executor is a person appointed in the Will of a testator (i.e. person making the Will). They are responsible for carrying out the deceased’s wishes and administering their estate in accordance with their last Will. An executor may be a person (over 18 years old), professional trustee company (including the public trustee) or a professional adviser (e.g. lawyer or accountant).

Upon the death of the testator, an executor is granted various powers authorising them to control and administer the assets of the deceased.^[2] Additionally, the executor accepts the responsibility of various duties owed to other parties per section 52 of the Succession Act 1981 (QLD).^[3] These include:

• preparing the relevant documentation for a Court application;
• obtaining a Grant of Probate or Letters of Administration;
• collecting the personal estate of the deceased;
• adhering to relevant timeframes for a potential challenge;
• administering and distributing the estate; and
• ensuring an estate tax return has been prepared.

Executor duties

A Will can be complex or challenged requiring further evidence. In Wagner v Wagner, the Court analysed the scope of an executor’s duty where an application was made for further provision by an eligible person. When an application for further provision is made, the executor is required to hold the estate until the application has been heard and settled. In Vasiljev v Public Trustee,^[4] Hutley JA described the executor as the person defending the Will.

The Will

The deceased passed away on 12 June 2024 leaving a wife and 11 children. The deceased appointed four of his children as the executors of his Will. The applicants of the case are four other children of the deceased. The applicants made a claim for further provision. The Court ordered that the executors file an affidavit containing an estimate of the deceased’s assets, liabilities (value at the date of death). An independent third-party valuation for two entities of the deceased was required, of which he was the shareholder, as well as two properties which the deceased owned solely. The executors were required to disclose the valuations and update the inventory of assets and liabilities accordingly. The parties were ordered to attend mediation, however the applicants refused to attend, given they believed the valuations to be inadequate.

The property valuation

The executors engaged with Herron Todd White (HTW) and ordered an ‘Indicative Desktop Assessment’ for each of the two properties. This assessment is based on documentation provided and does not involve a physical inspection. The executors were informed that such a valuation would involve a large degree of risk and variation. The properties were valued at approximately $2.65M and $300k respectively. The applicants raised concerns regarding the quality of the expert reports provided by the executors. The Court determined that the risk of inaccuracy from the report was not appropriate for the matter. The Court found the executors failed to fulfill their duties owed to both the beneficiaries and the Court and ordered a full valuation be done for both properties.

The company valuation

The executors engaged RSM to deliver a report for the shareholdings of the deceased in two companies. The report concluded that the deceased’s shareholdings were valued at $13.4M. The applicants again questioned the suitability of this report and raised concerns about:

• The use of different valuation methods;
• capital gains tax;
• discounts applied; and
• provision of asserted relevant documentation.

RSM provided a ‘Limited Scope Valuation’. This valuation is provided where the required approaches, methods and procedures of a full valuation cannot be performed. Treston J explained that while no evidence was provided to explain why a Limited Scope Valuation was provided, an executor should have taken steps to bring the issue to the Court’s attention.^[5] The Court inevitably found that the valuations of each company were insufficient and that the executors failed to fulfill their duties.

An important reminder

Executors play an essential role in the upholding and administering the Will of the deceased. The role can be strenuous and demanding, especially when issues and complexities arise. It is often recommended to have a discussion with the person who you are considering appointing as an executor; this enables you to ascertain their willingness and understanding of the role.

Where multiple people are appointed as executors (max of 4), these people must act together. A multiple appointment may help the executors with the complexity and workload. However, it is also important to ensure where multiple executors are appointed that they are able to work well together to ensure the smooth administration of your estate.

A professional trustee company or trusted adviser can also be appointed however a testator needs to understand these entities charge fees for acting in these roles (i.e. either a percentage of the total value of your estate or on a time basis)

When choosing the right executor, the testator should take in consideration the complexity of their estate, the Will particulars and family dynamics but most importantly, trust and reliability are key aspects to the appointment of an appropriate executor.

Final thoughts and next steps

Should you wish to discuss the appointment of an executor of your estate or any aspect of your estate planning, please call 1800 867 113, or to organise a confidential discussion at a time that suits you, please click here.