There can be a lot of confusion as to the role of the Executor and the role of the Attorney. One of the most common beliefs is that they are the same thing and if you appoint an Executor then they are able to be your Attorney automatically and make decisions for you if you are able to do so. This is not correct. There is also a widely held view that your partner is automatically your attorney or executor. Again, without official documentation, this is not the case.
So, what is involved in each of the roles and how do the roles differ?
What is an Executor?
You are required to appoint an Executor when you create your Will, it can be an individual or a group of people. However, in Queensland, the maximum number of Executors appointed under a Grant of Probate is four people at any one time.
Generally, an Executor ensures your Will is carried out and your assets distributed in accordance with your wishes.
Additional specific responsibilities of the Executor include:
1. Organising funeral arrangements
The executor has the legal authority and responsibility to organise the funeral arrangements. Specific requests for funeral arrangements may be left within the Will, but the executor normally has the final say.
2. Applying for probate
The executor often needs to obtain a Grant of Probate from the Court which confirms the Will is valid and provides the executor with formal legal authority to carry out a person’s wishes and collect the assets from asset holders.
3. Organise assets and pay any remaining liabilities
The executor must locate all assets and liabilities before they can be distributed. This may include bank statements, credit cards, real estate titles, mortgage or loan documents, insurances, or unpaid debt statements.
4. Protecting the assets
Sometimes it can take time for assets and property to be distributed to beneficiaries, therefore the executor must care for and maintain the value of these assets until then. This may mean obtaining insurance for real estate, cleaning and regularly checking on property, or ensuring any money in bank accounts is still accumulating interest.
5. Defend the estate should legal challenges arise
If a person wants to contest a Will in Court, the executor usually must defend the challenge on behalf of the estate (of course a lawyer can help with this though!)
6. Settle any outstanding tax liability with the Australian Taxation Office (ATO)
The executor must notify the ATO of the person’s death and may need to settle all affairs with them by lodging a final tax return or trust tax return.
What is an Enduring Power of Attorney?
An Enduring Power of Attorney is a legal document that allows you to name a person or persons to step into your shoes and make financial and/or personal (including health) decisions on your behalf if you are unable to do so. The person you nominate is known as your Attorney (not to be confused with the American term used to describe a lawyer).
The person nominated as your Attorney is required to act in your best interests to protect your assets and affairs. Enduring means that the power of the Attorney can continue if you were to lose mental capacity.
You can also place limits on just how much control your attorney has in particular circumstances.
What happens if I don’t have an attorney or executor?
The Queensland Civil and Administrative Tribunal (QCAT) may appoint someone to make decisions on your behalf if you do not have an attorney, such as the Office of the Adult Guardian or the Public Trustee. The Supreme Court of Queensland has the final say on who your executor will be if you fail to appoint an executor. Normally, this would be the person would be your spouse or children.
What’s the difference between these roles?
The key differences are when the roles come into effect and the responsibilities they have.
An Enduring Power of Attorney can “activate” in situations where you are still alive but unable to make independent decisions, whereas an executor only assumes responsibilities after your passing.
An executor also has a limited job description, whereas an attorney may be involved for a long period of time and has a wider range of obligations depending on the situation.
Can I appoint the same person for both roles?
You can, but you need to be mindful that both roles come with heavy and often heartbreaking responsibilities. Importantly, the roles do not overlap. Therefore, if the same person is selected, they won’t need to fulfil two roles at once. Whoever you select, it needs to be someone you trust and will hopefully outlive you. People often appoint their spouse or children for the roles.