Appointed Executor of an Estate? Here's What You Need to Know

Being named as executor of someone's estate is an honour — but it's also a significant legal and financial responsibility. If you've recently been appointed executor and you're not sure where to start with the finances, this guide is for you.

Executors are personally liable for mistakes they make administering an estate. Getting professional accounting advice early isn't just helpful — it protects you.

What is an executor?

An executor is the person named in a will to administer the deceased's estate. Your job is to: locate and secure all assets, pay any debts and taxes owing, and distribute what remains to the beneficiaries according to the will. Until this process is complete, you are personally responsible for the estate's assets.

Your first financial steps

1. Get the Grant of Probate

Before you can access most financial assets (bank accounts, share portfolios, managed funds), you'll need a Grant of Probate from the NSW Supreme Court. This is a court order confirming the will is valid and that you have authority to act. Your solicitor handles this process. It typically takes four to eight weeks.

2. Locate and secure all assets

Search through the deceased's papers, emails, and records to identify all assets: bank accounts, superannuation, investments, property, life insurance, business interests, cryptocurrency, and personal property. Don't assume the will lists everything — people often have accounts or assets they forgot to update their will to include.

3. Open an estate bank account

Open a separate bank account in your name as executor of the estate. All estate funds should flow through this account. Never mix estate funds with your own personal finances.

4. Notify relevant institutions

Notify banks, share registries, the ATO, Centrelink, and any employer or business. Cancel credit cards and direct debits. Redirect mail. Ensure you have control of all accounts before anything is paid out.

Tax obligations of an estate

This is where many executors get caught out. Estates have tax obligations that are separate from the deceased's personal tax affairs:

• Final personal tax return — You must lodge a final income tax return for the deceased covering the period from 1 July of the last income year to the date of death
• Date of death tax return — Separate from the final return in some cases; covers income received in the period of administration
• Estate tax return — If the estate earns income during administration (rent, dividends, interest), the estate itself may need to lodge a trust tax return
• Capital gains tax — Transferring assets to beneficiaries can trigger CGT, depending on the asset type and who receives it. The main residence exemption and other concessions can apply, but advice is essential
• Superannuation — Super is not automatically part of the estate and may be paid directly to dependants or to the estate, depending on binding nominations and trustee discretion

What about superannuation?

Superannuation does not automatically form part of a deceased estate. If the deceased had a valid binding death benefit nomination, the super fund trustee must pay according to that nomination — directly to the nominated dependants, bypassing the estate entirely. If there is no valid nomination, the trustee has discretion to decide who receives the super. As executor, you may need to make a formal claim if you believe the super should be paid to the estate.

Paying debts

Before distributing anything to beneficiaries, you must pay all valid debts: mortgages, credit cards, personal loans, tax liabilities, business debts for which the deceased was personally liable, and funeral expenses. Beneficiaries are sometimes surprised to learn how much of an estate can be absorbed by debts. You are not personally liable for the deceased's debts (unless you co-signed them) — but you cannot distribute assets until debts are paid.

Family provision claims

Under the Succession Act 2006 (NSW), certain eligible persons (spouses, children, former spouses in some circumstances) can make a family provision claim against the estate even if they were excluded from the will. These claims must be made within 12 months of death. As executor, if you are aware of a potential claim, you should delay final distribution until the claim period has passed or the matter is resolved.

How long does estate administration take?

A simple estate — one property, a bank account, no business interests — might be finalised in six to twelve months. Complex estates involving business interests, disputes, or significant assets can take several years. The ATO recommends obtaining a clearance certificate before distributing estates worth more than $50,000.

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JJ162 Chartered Accountants assists executors with the full range of estate accounting and tax obligations — from the final personal return to estate tax returns, CGT advice, and distributions. We also provide forensic accounting support where estate disputes arise.