Beneficiary vs Executors
Managing a deceased estate can sometimes be a difficult exercise. Misunderstandings and tension between executors and beneficiaries can arise in what is understandably an emotional and stressful process. This article will explore some of the common flashpoints that can occur between executors and beneficiaries and comment on some points that are at the heart of the working relationship between executors or administrators and the beneficiaries of the estate.
Does the beneficiary have a right to see the Will?
- At law, only a residuary beneficiary has a right to view the Will of a deceased person. A beneficiary of a specific gift or amount is not technically entitled to view the Will.
- A right to view the Will only arises once a person has passed away(!)
- However, once probate of the Will has been granted to the executor, the Will becomes a public document and anyone can obtain a copy of the Will if they make an application to the Court registry and pay a fee.
- In most cases we advise executors to provide the Will to all the beneficiaries, as we generally advise that executors should try to reduce the chances of conflict in the course of managing the estate.
- The only time we may advise an executor to not provide a full copy of the Will to all parties is where the Will contains sensitive or personal information, as some homemade Wills do.
Who is entitled to see estate accounts?
The information, a beneficiary has a right to access, depends on their entitlements under the Will. A beneficiary is entitled to be given access to information about the property they have been left in the Will, so they can ensure the executor is kept accountable. However, this doesn’t mean that every beneficiary under a Will is entitled to information about the entire estate. For example, if a beneficiary is gifted the deceased’s jewellery, they are entitled to information about that jewellery, but they are not entitled to information about the deceased’s bank accounts.
The only way a beneficiary will be entitled to see estate accounts is if an account has been left to them under the Will or if they are a residuary beneficiary. Residuary beneficiaries have a right to information about the deceased’s bank accounts because they are entitled to whatever is left over after the rest of the estate has been administered, so they have an interest in keeping the executor accountable.
The executor is entitled to (and has to) see the estate accounts because they have to file an inventory of the deceased’s estate with the Court when they apply for a grant of probate (Non-contentious Probate Rules 1967 (WA)). This requires the executor to particularise the assets and liabilities of the estate.
What if the executor is not managing the estate properly?
An executor has a duty to act in the best interests of the beneficiaries of the estate. Executors need to attend to things such as:
- Notify beneficiaries of their entitlement;
- Make enquiries to determine the estate’s assets and obtain valuations where necessary;
- Apply for a Grant of Probate;
- Collect the assets and take steps to preserve them;
- Pay debts, funeral expenses and expenses of the estate;
- Lodge final income tax returns covering the period up until death and of administration;
- Distribute the assets to the beneficiaries either by selling assets and paying cash or by the transfer of assets;
- In the case of minors, invest their inheritance in authorised trustee investments and make payments for their benefit; and
- Where property is held in trust (i.e. for the life of a beneficiary) keep the property in good repair, and pay rates, insurance and maintenance costs.
If you would like more information about the role of an executor, you can have a look at our factsheet entitled Managing a Deceased Estate.
If an executor isn’t performing their role properly, beneficiaries can pursue legal action to remove the executor.
Is the executor allowed to buy assets from the estate?
Executors have a fiduciary duty to the beneficiaries of the estate. This means, among other things, that the executor cannot obtain a personal benefit from the estate at the expense of the beneficiaries.
Sometimes in administering an estate, an executor will be required to sell an asset. In selling an asset of the estate, the executor may be allowed to purchase the asset themselves, under certain circumstances. The executor will need to first obtain a valuation of the asset to ensure they purchase it for not less than market value – if they purchase it for less than market value, they will be not be acting in the best interests of the beneficiaries. The executor will also need to obtain informed consent from all adult beneficiaries before they can purchase an asset from the estate.
Can the executor favour one beneficiary over another?
Executors have a duty of impartiality, which means they cannot favour one beneficiary over another.
Can the executor charge fees for their work?
As a general rule of thumb, executors are not entitled to be paid for their work as executor. However, there are some circumstances in which an executor will receive remuneration, namely:
- If the Will says the executor should be paid;
- If all adult beneficiaries agree the executor should be paid; or
- They can apply to Court and obtain an order for remuneration.
Executors also have the right to be reimbursed for reasonable expenses they have paid on behalf of the estate, such as funeral expenses.
About the authors:
This article has been co-authored by Chelsea McNeill, Matthew Gunn and Steven Brown. Chelsea is a Law Graduate from Murdoch University. After completing a double degree Bachelor of Arts (Politics and International Relations) and a Bachelor of Law, Matthew was admitted into the Supreme Court of Western Australia in 2016. Steven is a Perth lawyer and director, and has over 20 years’ experience in legal practice and practices in commercial law, dispute resolution and estate planning.