Information Centre · Probate & Deceased Estates
Executor's Guide to Estate Administration in Victoria
A comprehensive Victorian guide for executors, prospective executors, beneficiaries, family members and advisers — the end-to-end administration lifecycle, the duties and risks of the office, and the practical steps from death to final distribution. General information only — not legal or tax advice.
Key points
- Comprehensive Victorian pillar guide to the estate-administration lifecycle — from appointment and probate through to final distribution and finalisation.
- Executors combine four roles: legal personal representative, fiduciary, project manager and communicator-in-chief — and carry personal liability for breach of duty.
- The 'executor's year' is the benchmark — most ordinary Victorian estates should be administered within twelve months; delay is the most common subject of beneficiary complaint and removal applications.
- Section 254 ITAA 1936 makes executors personally liable for tax — distribution before tax is finalised, without adequate retentions or refunding bonds, is the single largest personal-liability trap.
- Co-executors must act unanimously; deadlock is itself a ground for removal; judicial advice and section 65 commission applications are the main supervisory tools.
- Specialised assets (listed shares, private company shares, cryptocurrency), tax (estate income, CGT, testamentary trusts) and disputes (probate caveats, family-provision claims, executor removal) each have dedicated guides linked from this pillar.
Being appointed as the executor of a Victorian estate is an honour, a responsibility and — for most people — a first-time experience. The office combines the duties of a trustee with the practical work of a project manager, accountant, real estate agent, mediator and correspondent-in-chief. It is unpaid in most family cases, time-consuming in all cases and personally risky in any case where the executor does not understand the rules. This pillar guide is the central executor reference in the Parke Lawyers Information Centre. It maps the entire administration lifecycle — from accepting the role through to finalisation — and links out to the specialised guides that cover each topic in detail.
The guide is written for Victorian estates, governed by the Administration and Probate Act 1958 (Vic), the Trustee Act 1958 (Vic), the Wills Act 1997 (Vic) and the Supreme Court (Administration and Probate) Rules 2014. Federal tax law — the Income Tax Assessment Acts of 1936 and 1997 — applies across Australia and is dealt with at the relevant points. For an overview of our wider services, see our Probate & Estate Administration, Wills & Estate Planning and Estate Litigation & TFM Claims practice pages.
What an Executor Does
An executor is the person named in a will to carry out the wishes of the deceased. The role combines four distinct functions. First, the executor is the deceased's legal personal representative — the person with legal authority to deal with assets, sign contracts, sue and be sued on behalf of the estate. Second, the executor is a fiduciary — held to the strict standards of honesty, loyalty and care that the law imposes on those who manage property for others. Third, the executor is a project manager — the administration of an estate is a multi-stream exercise with real deadlines and real consequences for delay. Fourth, the executor is a communicator — the relationship with beneficiaries is often the determining factor between a smooth administration and a disputed one.
The work is concrete: securing the residence; arranging the funeral (or coordinating with the family); collecting the assets; paying the debts; lodging the tax returns; selling or transferring property; distributing the residue; and keeping a complete account of everything done. None of these steps is hard in isolation. The difficulty lies in doing all of them, in the right order, within reasonable time, while managing the family — and in carrying personal liability if any step is missed.
Appointment of Executors
Executors are appointed by the will. A well-drafted will names a primary executor, one or more substitute or alternate executors, and may name co-executors who act jointly. Trustee companies and law firms are sometimes named as professional executors, particularly where the estate is large or the family is in conflict. Where no executor is named, the appointment is willing or available, the Court appoints an administrator under letters of administration with the will annexed. Where there is no will at all, an administrator is appointed under letters of administration on intestacy in the order of priority set out in the Administration and Probate Act 1958 (Vic).
The number of executors matters. A single executor moves quickly. Co-executors must act unanimously and so move more slowly; they also bring redundancy and a measure of mutual oversight. Three executors are rare and rarely advisable. Whatever the structure, the choice of executor should match the complexity of the estate and the personality of the family — see our companion guide on co-executors who cannot agree.
Accepting or Declining the Role
An executor named in a will is not obliged to act. Three options exist. The executor may accept the role and apply for probate. The executor may renounce the role formally by filing a renunciation with the Probate Office before doing any act that constitutes intermeddling. Or the executor may apply to reserve their position — useful where one co-executor wishes to act and another may wish to act later.
Renunciation is irrevocable once filed. Intermeddling is broader than most executors realise: paying a small bill, instructing a real estate agent, signing a holding statement or arranging the funeral may amount to intermeddling depending on context. Anyone named as executor who is contemplating renunciation should do nothing in relation to the estate (other than securing the residence and arranging the funeral on a personal basis) until advice has been obtained. See our companion guide on executors refusing to act in Victoria.
Probate
Probate is the Supreme Court of Victoria's formal recognition that the will is the last valid will of the deceased and that the executor named in it has authority to administer the estate. It is the gateway through which most estate work passes. Banks, share registries, superannuation funds and Land Use Victoria require production of a sealed grant before they will release or transfer an asset above their internal small-estate threshold. The grant runs in the executor's name; it travels with the executor for the duration of the administration. Our pillar guide on probate in Victoria sets out the application process, the documents required and the costs. The companion guide on how long probate takes in Victoria sets out the timeframes. For estates without a will, the companion guide on letters of administration explains the equivalent process.
Probate is not always required. Small estates with only jointly held assets (which pass by survivorship and not through the estate) or estates with only superannuation and life insurance paid to nominated beneficiaries can sometimes be wound up without a grant. The threshold differs from one institution to another; a conservative executor obtains advice rather than assuming.
Collecting Estate Assets
Collecting the assets is the longest single stream of estate administration. The executor compiles an inventory (which must be sworn to in the probate application), obtains valuations as at date of death, opens an estate bank account, lodges transmission applications with share registries and Land Use Victoria, claims superannuation and life insurance, follows up nominated and non-nominated beneficiary entitlements, and traces any forgotten holdings.
Specialised asset types have specialised guides. For listed shareholdings — including missing certificates, CHESS-sponsored and issuer-sponsored holdings and the three major registries — see our companion guide on lost share certificates in deceased estates. For unlisted shareholdings — including valuation, transmission, dissenting directors and constitutional restrictions — see our companion guide on private company shares in deceased estates. For digital assets — including private keys, self-custody wallets and exchange-held cryptocurrency — see our companion guide on deceased estates and cryptocurrency holdings. For interests in a private company or family business generally, see our companion guide on what happens to a company when a director or shareholder dies.
Protecting Estate Assets
An executor's duty is not only to collect assets but to preserve them. The most common failure point is property: an unoccupied residence with lapsed insurance, a commercial tenancy without a managing agent, a holiday home in regional Victoria left unchecked through summer. The executor must insure all estate property, take possession of the keys, redirect mail, secure the alarm, instruct an agent if the property is to be sold and an inspecting party (often the agent or a family member) if the property is to be held. Failure to insure is the single largest source of personal liability for executors — the executor's own insurance does not respond.
Financial assets must be protected from market risk in the same conceptual way. Where the will gives the executor a discretion to sell or hold, the discretion must be exercised reasonably; failure to sell a falling asset, or to hold a rising one, exposes the executor to beneficiary complaint. The protection is process: written decisions, beneficiary consultation where possible, advice on the record, and — for material decisions — applications for judicial advice.
Estate Liabilities
Before any distribution, the estate's liabilities must be quantified and paid. These include funeral and testamentary expenses (a first charge); secured debts (mortgages and charges over estate assets); unsecured debts (credit cards, utility accounts, personal loans); tax (the deceased's final personal return, the estate's trust returns, any outstanding assessments); legal costs of administration; and any commission payable to the executor. Where liabilities exceed assets, the estate is insolvent and the prescribed order of payment in the Administration and Probate Act 1958 (Vic) applies.
A prudent executor publishes a section 33 Trustee Act 1958 (Vic) statutory notice for creditors to come in before distribution, and a section 30 notice where applicable. The notice gives a fixed period (commonly 30 days) within which creditors must lodge claims. Distribution after the period expires protects the executor from personal liability for any unclaimed debt of which the executor had no actual knowledge.
The Estate Administration Process
A typical Victorian estate administration runs as follows. In the first month the executor secures the residence, locates the will, orders death certificates, engages a solicitor and accountant, notifies the bank and superannuation fund, and opens an estate file. In months one to three the probate application is prepared and lodged; valuations are obtained; insurance is confirmed; assets are inventoried. From month three to six (assuming probate has been granted) the executor collects assets, lodges transmission applications, settles the deceased's final personal tax return and publishes any creditor notices. From month six to twelve the estate is brought to a position where distribution can be made — debts paid, tax cleared, property sold or transferred, accounts ready for presentation to beneficiaries. Distribution and the closing of the estate file follow.
The pattern varies. Estates with a property sale add months. Estates with a family-provision claim add a year or more. Estates with overseas assets, complex tax, disputed wills or testamentary trusts add open-ended time. The 'executor's year' is a benchmark, not a deadline.
Beneficiary Rights
Beneficiaries are entitled to be told that they are beneficiaries; to be given a copy of the will (in Victoria, anyone with a proper interest may inspect the will on application after death); to receive an account of administration on request; to receive their entitlement within a reasonable time; and to bring proceedings to enforce those rights. Beneficiaries are not entitled to direct the executor's decisions or to second-guess commercial judgments made within the executor's discretion. The line between proper oversight and improper interference is set out in our companion guide on beneficiary rights in estate administration in Victoria. Where the executor has made a decision a beneficiary considers wrong, the path to challenge is the application described in our companion guide on when a beneficiary can challenge executor decisions.
Executor Duties and Fiduciary Obligations
The duties of an executor are set out in case law going back centuries, refined in Victoria by the Trustee Act 1958 and the Supreme Court's inherent supervisory jurisdiction. They include: the duty to act honestly and in good faith; the duty to avoid conflicts of interest; the duty not to profit from the office; the duty to act with reasonable care, diligence and skill; the duty to keep estate property separate from personal property; the duty to keep accurate accounts; the duty to act impartially between beneficiaries; the duty to consult where the will so requires; and the over-arching duty to administer the estate in accordance with the will and the law. Our companion guides on the duties of an executor in Victoria and fiduciary duties of an executor in Victoria set out the detail.
Co-Executors
Co-executors must act jointly. Unanimity is required; the signature of one co-executor on a bank form, a transfer or a sale contract is insufficient. The practical consequences are real: a single co-executor can paralyse administration by withholding consent. The will may mitigate this by providing for majority decision-making, but most homemade wills do not. Where co-executors cannot agree, the options are negotiation, mediation, judicial advice or — in serious cases — application to remove one or both. See our companion guide on co-executors who cannot agree in Victoria.
Executor Disputes
Estate disputes between executors, and between executors and beneficiaries, fall into recognisable categories: who should be appointed; how the administration is being conducted; whether a particular decision was within authority; whether commission should be allowed; whether the executor should be removed; and the contentious estate litigation discussed below. Most disputes are resolved by correspondence or mediation; a minority go to the Supreme Court. The litigation pathway is expensive and time-consuming and is rarely the executor's first choice. See our companion guide on executor disputes in Victoria.
Removing an Executor
The Supreme Court of Victoria has jurisdiction to remove an executor and appoint another in their place. The grounds include misconduct, conflict of interest, incapacity, insolvency, persistent failure to administer the estate, and serious or sustained delay. Removal is a serious remedy and the Court will not grant it lightly; mere disagreement with executor decisions is not enough. Where the application succeeds, the Court appoints an administrator (often an independent professional) and may order the outgoing executor to pay costs personally. See our companion guide on when an executor can be removed in Victoria.
Executor Remuneration
An executor may be remunerated for their work either under a charging clause in the will or by allowance of commission under section 65 of the Administration and Probate Act 1958 (Vic). The Court approves commission having regard to the 'pains and trouble' of administering the estate and to the size and complexity of the assets. Commission is typically 1–3% of the corpus and 3–5% of the income, but the Court tailors the allowance to the case. Beneficiary consent is the easier and cheaper route to commission; an application opposed by beneficiaries is contested litigation in its own right. See our companion guide on whether an executor can be paid in Victoria.
Estate Taxation
Estate taxation in Australia operates at two levels. The deceased's personal tax obligations to the date of death are dealt with in a final personal income tax return. The estate's tax obligations from the date of death are dealt with in a deceased-estate trust tax return lodged for each year until the estate is fully administered. The executor obtains a tax file number for the estate, registers with the ATO, and lodges both returns through the estate's tax agent. The interaction between the executor, the ATO and the estate is the subject of our companion guide on the ATO, probate and deceased estates.
Estate Income
Estate income — rent, interest, dividends, distributions from family trusts and other income earned by estate assets after the date of death — is taxable. The executor reports it in the estate trust tax return. Whether the tax is paid by the executor (in the trust's hands) or by a beneficiary (where the beneficiary is 'presently entitled' to the income) is governed by Division 6 of the Income Tax Assessment Act 1936. The allocation matters: an estate is taxed at full marginal rates after the first three income years, while income distributed to an adult beneficiary on a lower marginal rate is taxed accordingly. See our companion guide on who pays tax on estate income in Australia and the threshold question of when a return must be lodged at all is dealt with in when an estate income tax return is required.
Capital Gains Tax
Death is not itself a CGT event. The Division 128 rollover defers CGT until a later disposal. Where the executor sells an estate asset, CGT is payable by the estate; where the executor transfers in specie to a beneficiary, CGT is deferred until the beneficiary disposes. The cost base of post-CGT assets is inherited from the deceased; for pre-CGT assets, the cost base is the market value at death. The two-year main residence exemption window for the deceased's home is the most commonly misapplied rule. Dividend reinvestment plans generate parcels with separate acquisition dates that executors routinely overlook. The detail is set out in our companion guides on capital gains tax in deceased estates: common executor mistakes and dividend reinvestment plans and deceased estates: the hidden CGT trap.
Estate Distributions
Distribution is the final substantive act of administration. The executor must be satisfied that all debts are paid, all tax is dealt with, all assets have been collected, all creditor notices have expired and any family-provision limitation period has run or any pending claim has been resolved. Distribution before these conditions are met is permissible but risky: the executor takes personal exposure on any later-arising liability. The practical safeguards — clearance from the ATO, ATO notice of assessment, refunding bonds, retentions — are dealt with in our companion guide on whether an executor can distribute the estate before tax is finalised. Where the will creates a testamentary trust, the distribution is to the trustee of that trust rather than to the ultimate beneficiary; see our companion guide on taxation of testamentary trusts explained.
Delays in Administration
Delay is the most common subject of beneficiary complaint and the most common ground of executor removal. The 'executor's year' — a competent administration within twelve months of death — is the benchmark. Some delays are inevitable and defensible: contested probate, family provision claims, complex tax, overseas assets, slow property sales. Some delays are not: failure to apply for probate, failure to insure, failure to communicate, failure to lodge tax returns, failure to act at all. The boundary between the two is the subject of our companion guide on estate administration delays and executor liability.
Personal Liability Risks
An executor is personally liable for loss caused by breach of duty. The exposure is real: an uninsured property burnt down; a statute-barred debt paid out of the executor's pocket; an ATO penalty imposed under section 254 of the Income Tax Assessment Act 1936; a distribution made before a family-provision claim is resolved; an asset sold below value without proper valuation. The protection is process: documented decisions, professional advice on the file, beneficiary consultation where appropriate, applications for judicial advice in serious cases, and adequate retentions before distribution. Estate-administration insurance is available but most family executors rely on care and process.
Estate Litigation Issues
Estate litigation falls into three main streams. Probate disputes challenge the validity of the will itself — capacity, undue influence, fraud, formal validity — and are typically commenced by lodging a probate caveat before a grant issues. Family-provision claims are applications by eligible persons for further provision under Part IV of the Administration and Probate Act 1958 (Vic); see our companion guide on family provision claims in Victoria. Executor disputes are applications by beneficiaries or co-executors about how the administration is being conducted; see our companion guide on executor disputes. In every case the executor's primary obligation is to defend the estate (not the will-maker and not the beneficiaries) and to act neutrally between competing interests. Independent representation is sometimes necessary.
Finalisation of Administration
When all assets have been collected, all liabilities paid, all tax cleared and all distributions made, the administration is finalised. The executor prepares final accounts, presents them to beneficiaries, obtains beneficiary receipts and discharges, lodges any final tax return, closes the estate bank account and the estate's ATO file, and retains the file for at least seven years. Where a testamentary trust continues, the executor's role transitions to that of trustee under the trust — a distinct legal capacity with its own duties. The point at which a deceased estate ends for tax purposes is the subject of our companion guide on when a deceased estate ends for tax purposes.
A Practical Executor Checklist
The following checklist is a working summary for a Victorian estate of ordinary complexity.
First 30 days. Order at least five certified death certificates. Locate the will and any codicils. Engage a solicitor. Engage an accountant. Secure the deceased's residence and insure it. Redirect mail. Notify the bank, superannuation fund and life insurer. Lodge a probate caveat search. Open communication with beneficiaries.
Days 30–90. Prepare and lodge the probate application. Obtain valuations of all assets at date of death. Inventory the estate. Open an estate bank account. Identify and quantify all debts. Order beneficiary nominations from superannuation funds. Engage a real estate agent if property is to be sold.
Days 90–180. Lodge transmission applications with share registries and Land Use Victoria. Lodge the deceased's final personal tax return. Publish the section 33 Trustee Act creditors' notice. Pay funeral, testamentary and undisputed debts. Update beneficiaries.
Days 180–365. Sell or transfer estate assets. Lodge the estate's trust tax return. Resolve any family-provision claim. Prepare draft accounts. Obtain an ATO clearance or notice of assessment. Distribute interim and then final entitlements. Obtain beneficiary receipts and discharges.
Beyond. Maintain the estate's tax file until the estate ends for tax purposes. Continue as trustee of any testamentary trust. Retain the file for at least seven years.
Where to Go for Help
Parke Lawyers acts for executors, administrators, beneficiaries and families on every aspect of Victorian estate administration — from the simplest single-asset estate to the largest contested multi-jurisdictional estate. We work with the estate's accountant, financial adviser and family on a coordinated administration plan, and we provide ongoing day-to-day support to the executor for as long as the administration runs.
Our principal, Jim Parke, is both a lawyer and a Chartered Accountant. That combination is unusual and is particularly useful in executor work, where the tax and legal questions cannot be sensibly separated.
Frequently Asked Questions
Who can be appointed as an executor in Victoria?
Any adult with legal capacity may be appointed as an executor under a will in Victoria. There is no requirement that the executor be a lawyer, accountant, family member or beneficiary. Common appointments include a spouse, an adult child, a sibling, a trusted friend, a professional adviser, a trustee company or a combination of these in succession. A person who is bankrupt, a minor, or who lacks capacity will not be granted probate and an alternative or substitute appointment will be required. Choosing an executor is one of the most important decisions in a will — the executor will be responsible for tax, property, family expectations and (often) several years of administration.
Do I have to accept the role of executor?
No. An executor named in a will is not obliged to act. Before doing any act that 'intermeddles' in the estate (such as paying a bill, collecting an asset or instructing a real estate agent), an executor may renounce the role by filing a formal renunciation with the Supreme Court of Victoria. Once an executor has accepted the role — usually by applying for probate — they cannot simply walk away; they must apply to be removed or replaced. Anyone contemplating renunciation should obtain advice before acting at all in relation to the estate.
What is probate and is it always required?
Probate is the formal recognition by the Supreme Court of Victoria that the will is the last valid will of the deceased and that the named executor has authority to administer the estate. Probate is required when assets are held with institutions (banks, share registries, superannuation funds, Land Use Victoria) that demand a grant before they will release or transfer the asset. For small estates with only jointly held assets (which pass by survivorship), or estates with only nominated superannuation and life insurance, probate may not be required. Our companion guide on probate in Victoria sets out the thresholds.
How long does estate administration take in Victoria?
The 'executor's year' is a common-law benchmark: a competent executor should expect to administer an ordinary estate within about twelve months of the date of death. Some estates legitimately take longer — estates with a property sale, an overseas asset, a family-provision claim, a tax dispute or a contested grant routinely run eighteen months to three years. Estates that drag beyond two years without obvious justification expose the executor to allegations of unreasonable delay; see our companion guide on estate administration delays and executor liability.
Are executors entitled to be paid in Victoria?
An executor is entitled to be reimbursed for properly incurred expenses, but is not automatically entitled to commission for their work. Commission may be claimed under section 65 of the Administration and Probate Act 1958 (Vic) or under a charging clause in the will. The Court approves commission having regard to 'pains and trouble' and to the size and complexity of the estate. Professional executors (lawyers, accountants and trustee companies) generally rely on a charging clause; family executors usually act without commission. Beneficiary consent is the easiest route — without it, an application for commission may be opposed.
What are an executor's fiduciary duties?
An executor is a fiduciary. The core duties are: to act honestly and in good faith; to avoid any conflict between personal interest and duty (or to disclose and obtain consent if conflict is unavoidable); not to profit from the office (other than commission properly authorised); to act with reasonable care and diligence; to keep estate property separate from personal property; to keep accurate accounts; to act impartially between beneficiaries; and to administer the estate in accordance with the will and the law. Breach of duty exposes the executor to personal liability for any loss caused.
What happens if there are two executors and they cannot agree?
Co-executors must act unanimously. There is no majority rule. Where co-executors deadlock, the options are: negotiation; formal mediation; an application to the Supreme Court for judicial advice under section 63 of the Trustee Act 1958 (Vic); or, in serious cases, an application to remove one or both executors and appoint an administrator. Persistent deadlock is itself a ground for removal because it amounts to a failure to administer the estate. See our companion guide on co-executors who cannot agree.
Can a beneficiary remove an executor in Victoria?
Yes, but only on application to the Supreme Court of Victoria and only on proper grounds. Mere disagreement with executor decisions is not enough. Recognised grounds include: misconduct; conflict of interest; persistent failure to administer the estate; incapacity; insolvency; and protracted delay without justification. The Court's overriding concern is the welfare of the estate and the protection of beneficiaries — removal is granted where continued administration by the existing executor is incompatible with those interests.
What is the difference between estate income and estate capital?
Estate income is income earned by estate assets after the date of death — rent on estate properties, dividends on estate shares, interest on estate deposits. Estate capital is the value of the assets themselves. The distinction matters for tax (estate income is reported in the deceased estate trust tax return, capital generally is not unless it triggers a CGT event); for distribution (income generally accrues to income beneficiaries, capital to capital beneficiaries); and for the executor's accounts (income and capital are tracked separately). The Trustee Act 1958 (Vic) and the will together govern apportionment.
When is a deceased estate income tax return required?
An estate income tax return is required where the estate earns assessable income above the ATO threshold for the relevant year (currently in the order of a few hundred dollars), where the estate has made capital gains, where PAYG instalments apply, or where the ATO has issued a notice requiring a return. The executor must obtain a tax file number for the estate, lodge the deceased's final personal return, and lodge a trust tax return for the estate for each year until the estate is fully administered. Our companion guides on estate income tax and when an estate tax return is required cover the detail.
Can an executor distribute the estate before tax is finalised?
Technically yes, but it is dangerous. Section 254 of the Income Tax Assessment Act 1936 makes the executor personally liable for the deceased's and the estate's tax. Early distribution exposes the executor to that personal liability if a tax assessment is later issued and the estate has insufficient retained funds to meet it. Prudent practice is to retain enough to meet any reasonably foreseeable tax assessment, obtain an ATO clearance letter or notice of assessment, and only then make final distribution. Worked examples appear in our companion guide on distributing before tax is finalised.
What is capital gains tax in a deceased estate?
Death is not itself a CGT event — the Division 128 rollover defers CGT until the asset is disposed of. Where the executor sells an estate asset, the estate pays CGT on the gain (cost base inherited from the deceased for post-CGT assets, market value at death for pre-CGT assets). Where the asset is transferred in specie to a beneficiary, the beneficiary inherits the cost base and CGT is deferred until the beneficiary's eventual disposal. The two-year main residence exemption window for the deceased's home is the most commonly misapplied rule. Our companion guide on capital gains tax in deceased estates sets out the common executor mistakes.
What is a notice for creditors to come in?
Under section 33 of the Trustee Act 1958 (Vic), an executor may publish a statutory notice giving creditors a fixed period (commonly 30 days) within which to lodge claims against the estate. Once the period expires, the executor may distribute the estate without personal liability for any unclaimed debt the executor did not actually know about. Publication of a notice is standard prudent practice in any estate where the deceased had business or commercial dealings.
When does a deceased estate end for tax purposes?
A deceased estate ends for tax purposes when it is 'fully administered' — when the assets have been collected, the debts and tax paid, and the residue is ready for distribution to beneficiaries (or has been distributed). The estate may continue to exist as a trust for income tax purposes if assets remain held for beneficiaries (for example a testamentary trust under the will), but the deceased estate phase ends. The distinction matters because the concessional tax treatment of a deceased estate (no Medicare levy, the three-year graduated-rate window under section 99) ends with the deceased estate. Our companion guide explains in detail.
What is a testamentary trust?
A testamentary trust is a trust created by the will that takes effect on death. The trust holds assets for nominated beneficiaries (often spouse, children or grandchildren) under terms set out in the will. The main attractions are asset protection (assets held in trust are usually beyond the reach of a beneficiary's creditors or family-law claims) and tax efficiency (income distributed to minors is taxed at adult marginal rates under section 102AG of the ITAA 1936). Testamentary trusts add complexity and ongoing trustee duties; they are not appropriate for every estate.
What is a family provision (TFM) claim?
A family provision claim — also called a TFM claim under Part IV of the Administration and Probate Act 1958 (Vic) — is an application by an 'eligible person' (spouse, child, dependant) for further provision from a deceased estate on the ground that the will (or intestacy) does not make adequate provision for their proper maintenance and support. Claims must be filed within six months of the grant of probate. A pending claim freezes distribution. Executors must defend the estate or seek directions; settlement at mediation is now the norm.
What is a refunding bond or indemnity from a beneficiary?
Where an executor distributes before all liabilities are known (for example before final tax assessment or before a family-provision limitation period has expired), a prudent executor may require the beneficiary to sign a refunding bond or indemnity — a contractual promise to return some or all of the distribution if a later claim or liability is established. The protection is only as good as the beneficiary's solvency and willingness to pay; for serious risks, retention by the executor is safer than reliance on indemnity.
What is a probate caveat?
A probate caveat is a formal notice lodged with the Probate Office of the Supreme Court that prevents a grant of probate being issued without notice to the caveator. It is the formal mechanism for challenging the validity of a will (capacity, undue influence, fraud, revocation) before probate is granted. A caveat is not a family-provision claim — it does not say the will is unfair, it says the will is invalid. Caveats must be supported by a reasonable basis; frivolous caveats expose the caveator to a costs order.
What records must an executor keep?
An executor must keep complete accounts of all estate receipts and payments, supporting invoices and receipts, asset valuations, copies of all correspondence with beneficiaries and creditors, all tax returns and assessments, all transfers and conveyances, and the file copy of the will and probate. Records must be kept for at least seven years (the ATO record-keeping period) and ideally for the life of any continuing testamentary trust. Beneficiaries are entitled to see a proper account of administration on request.
When should an executor seek legal advice?
Early. The most common executor mistake is to attempt administration without advice and then to seek help only after a problem has crystallised. Advice should be obtained at the outset on probate, on tax (a single conference with an accountant is usually enough), on family-provision risk, on co-executor dynamics, on the proper handling of any contested asset, and on the timing and form of distribution. The cost of preventive advice is invariably less than the cost of remedial advice once a beneficiary complaint, a tax penalty or a personal-liability exposure has arisen.
What is the practical executor checklist for the first thirty days?
In the first thirty days a competent executor should: obtain certified death certificates (order at least five); locate the original will and any codicils; meet with the family on funeral arrangements; secure the deceased's residence (locks, alarm, mail); notify the deceased's bank, employer, superannuation fund and life insurer; lodge a probate caveat search; instruct a solicitor on probate; obtain a tax file number for the estate; insure all estate property (vacant property is a common loss); engage an accountant for the final personal return; and open communication with beneficiaries. The opening month sets the tone — diligent early steps prevent every category of later problem.
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This article is general information only and does not constitute legal or taxation advice. Please obtain advice tailored to your circumstances.