What are the responsibilities of the Trustees and Executors of an estate? Usually Wills include the appointment of Trustees and Executors to ensure the simple and efficient management of an estate.
The Responsibilities of the Executor:
(a) carries out the terms of the Will;
(b) Collects in the assets of the estate, turning those into money as appropriate;
(c) Pays funeral expenses and debts from estate funds;
(d) Distributes the balance of the estate to the people entitled under the Will.
(e) Deals with any claims made against the estate.
The responsibilities of the Trustee:
(a) holds the assets of the estate including money, on trust until distribution to the persons named in the Will.
(b) may continue to hold those funds on trust for investment if the beneficiaries are under the age of twenty or until any conditions in the Will are complied with.
In the rest of this paper where “Trustee” is mentioned, it refers to the dual responsibility of Trustee and Executor. When a person dies, their Trustee or a member of the family should contact Gaze Burt. Gaze Burt will send the trustee a form for completion regarding assets and liabilities, IRD number, contact details and other relevant information. What does Gaze Burt do?
We write to the various financial institutions, to determine what documents are required. We prepare an affidavit (a sworn statement) to be
signed by the Trustees. The Trustees confirm that the Will is the last Will of the deceased, confirm the death of the deceased and undertake to carry out the administration of the estate. We then make application to the High Court for probate to be granted and sealed. Probate is a document that authorises Trustees to ‘bring in’ and then distribute the assets of the estate.
Gaze Burt will usually carry out the day-to-day administration of closing bank accounts, paying accounts and preparing statements and tax returns as required. The statements must be approved by the trustees before any distribution is made to the beneficiaries under the Will. Trustee’s liability The position of being a Trustee is a responsible one. A Trustee must ensure that all the debts of the estate are paid, including obligations to any Government Departments, eg repayment of Work and Income New Zealand overpayments. If a Trustee does not wish to act as a Trustee, then he or she can renounce his or her appointment. What happens if there is no Will?
If there is no Will then Gaze Burt can assist the relatives of the deceased to apply to the Court for the appointment of an administrator. This is usually a close family member. Once a grant of administration has been made by the Court, Gaze Burt can assist the administrator in dealing with the assets, paying accounts and distributing the estate in accordance with the law. Life interests Some Wills provide for a “life interest” to be given to a spouse or other family members. A life interest is a provision in a Will where ownership of an asset does not pass to the spouse but the ownership is retained in the name of the Trustees and the income on that asset is paid to the surviving spouse, or family member. In addition, Wills sometimes allow surviving spouses to live in the house which was previously owned by the deceased for their lifetime or in some cases until remarriage. Some Wills allow the Trustees to use all or part of the capital of the deceased’s estate to supplement the income for the surviving spouse if the income is insufficient. Property (Relationship) Act This Act provides that the spouse or partner of a deceased person will have an election to make; either accept whatever provision is made in the Will or apply to the Court to have relationship property divided as if the relationship had ended during the deceased’s lifetime. Are You a Surviving Spouse or Partner?
If your spouse/partner dies you have two choices:
1. Ask the Court to divide relationship property under the Property (Relationships) Act. If you have been married or have lived in a de facto relationship for three years or more the general rule is equal sharing of relationship property.
2. Take what has been given to you under the Will or intestacy.
Is there a Time Period for Choosing?
You have to make a decision within six months of the date of death for small estates or six months after grant of administration for larger estates. If you do not make an election, you will loose the right to choose and will simply take under the Will or intestacy. An independent solicitor must advise you on the advantages/disadvantages of each option. If we are acting in the administration of the estate, we cannot give you that advice.