Estate Group update: The executor’s role and power to delegate — here’s what you need to know

Executors often query the extent to which they can delegate tasks and responsibilities in the administration of an estate. Particularly in the context of professional executors such as financial advisors, accountants and financial planners, it can be difficult to distinguish between tasks that must be performed personally, and those that might be delegated to others.

Our latest Estate Group update provides clarity on the role of the executor and their duties, and more specifically, if they have the power to delegate actions and tasks for an estate to others.

The executor’s role

Executors are appointed in a will to manage and administer a deceased person’s estate. This includes carrying out any wishes set out in the will of the deceased.

The role of executor is one of significant responsibility, and should be approached with honesty and great care. The executor must administer the estate with the best interests of the estate and its beneficiaries in mind when making decisions. This includes managing and protecting assets and ensuring all liabilities of the estate are paid when appropriate.

Carrying out executorial duties can be cumbersome and complex. It is important for executors to understand what assistance they can employ to ease and simplify the process.

Refusal to act as executor

It is important to note that an executor can refuse to accept the position of executor, and ideally should do so before taking any steps in relation to the administration of the estate.

If the decision to not act as executor occurs after probate is granted, the executor must obtain the consent of the Supreme Court to cease acting.

Trustee duties

Executors will also take on the role of trustee of an estate, and broadly have the following duties:

• to act in good faith;
• to act personally;
• to act unanimously where multiple trustees are involved;
• to not be dictated to by others such as beneficiaries;
• to consider how distributions should be made and to who and when; and
• to avoid fettering of any discretion they have.

Duty to act personally

The executor or executors hold a duty to act personally in the administration of an estate. If there is more than one executor, then the executors should consult with each other.

Executors can delegate some of the actions and tasks for an estate to others. For example, funeral directors, lawyers, accountants and real estate agents may be employed. Section 28(1) of the Trustee Act 1958 (Vic) (the Act) directs that trustees or executors may employ appropriate ‘agents’ to carry out part of the administration of the estate, who can be paid from the estate.

However, the Act provides that executors must only employee agents in good faith, and where the executor believes that the agent will perform the tasks and transactions diligently and professionally. The choice of agent is therefore crucial, as the ultimate responsibility falls upon the executor. In certain circumstances the executor will be held personally liable where an agent is engaged and causes a loss to the estate.

It is common for executors to employ solicitors to obtain a Grant of Probate and carry out the administration of the estate.

Nevertheless, it is important for executors to be mindful that delegation of tasks does not absolve an executor of their responsibilities. It is a well-established principle that the appointment of an executor or trustee is one of trust and personal confidence by the will-maker.

Inability to delegate to an attorney

It is a common misconception that the responsibilities and duties of an executor can be delegated to an attorney under a Power of Attorney. This is not the case.

The Powers of Attorney Act 2014 (Vic) confirms that executorial duties cannot be delegated under either a General or Enduring Power of Attorney.

Duty to not fetter discretion

If there is more than one executor of an estate, decisions must be reached as specified in the will. This may be jointly, by majority or unanimously.

Executors may not fetter their discretion by leaving control of the estate of a co-executor or trustee (Hanbury v Kirkland (1829) 57 ER 998), and must each turn their mind to the decisions they need to make. This is supported by requirements that executors co-sign and jointly consent or deny administrative decisions of an estate.

Key take-away points

While it is appropriate, and indeed recommended, for executors to employ qualified professionals to assist in the administration of an estate, the responsibility and ultimate decision-making obligations rest with the executors. Executors should consider this before accepting the role and seek legal advice about any concerns.

More information

If you need advice on the role and duties of being an executor, please contact a member of our Estate Group:

Author

This Estate Group update was authored by Gabrielle Grech, Lawyer.

Note: This update is a guide only and is not intended to constitute legal advice.