One of the principle roles of an executor in administering an estate is to ensure that liabilities are paid and assets distributed to beneficiaries in accordance with the Will of the deceased.

But what happens if after the assets have been distributed and a previously unknown creditor or beneficiary comes forward to make a claim?

Is the Executor of an estate personally liable?

The short answer is yes.

An executor is personally liable if they distribute to beneficiaries without first paying all debts of the estate or, distribute to beneficiaries to the detriment of another contrary to the terms of the will

Fortunately, there are methods by which an executor can minimise and exclude liability.

In cases were Probate is granted, potential beneficiaries must notify an executor of their intention to challenge the estate within 6 months from the date Probate is granted.

The time to challenge an estate may be extended; however, any distribution made before the extension of time cannot be recovered from beneficiaries and the executor is not liable.

In cases where Grant of Probate is not required, an executor may ward off liability by giving notice to creditors and or beneficiaries in such a form as would have been given by the Court.

Judicial advice can be obtained to ensure that the notice is in such a form as to clear the executor of liability.

If proper notice is given, the executor cannot be held liable for any claims after the time provided for creditors and beneficiaries to make a claim has lapsed.

It should be noted that, although the executor is not liable, creditors are able to pursue beneficiaries for payment of debts.

If you have been appointed as an executor of an estate it is important that you obtain legal advice.

Call Williams Barristers & Solicitors today to talk to our expert team of Estate lawyers.

Williams Estate Lawyers Adelaide

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Call 08 8451 9040