DIY Executor of Estate – Benefits, Risks and Considerations

When a loved one passes away, the period that follows is always a difficult time. And even as you are still grieving, there may be a lot of important matters you need to attend to if you’re put in charge of administering the Deceased Estate.

Whether you’re the Executor or Administrator, you will soon be faced with the decision to be a DIY Executor of Estate or seek help of Estate Administration lawyers or solicitors specialising in Estate Administration-related matters or seek other support providers be that Executor and Administrator Support, accounting, tax expertise, selling or managing a property to name a few.

If you are considering if you should complete the administration of the Deceased Estate as a DIY Executor of Estate, this article will highlight the benefits, risks and key considerations before your proceed.

Remember, depending on the size of the Estate, the Administration of a Deceased Estate can be a lengthy, costly and complicated affair.

1. Common Reasons for Considering DIY Deceased Estate Administration

1.1 Legal Fees

The legal fees for administering an Estate may prove substantial, depending on many factors — including the estate size, complexity of assets and liabilities, relationship with and between Beneficiaries and other identified risks. All this will indicate how long you need to work with probate lawyers or solicitors whilst performing your duties as Executor or Administrator. Costs are usually the main reasons why some Executors and Administrators decide to complete the Deceased Estate Administration as DIY Executor of Estate.

1.2 Knee-deep in an Unfamiliar Process

A less obvious reason for being a DIY Executor of Estate is the fact that most Executors and Administrators face the challenge of managing a Deceased Estate for the first time in their life. Understandably so, most people aren’t prepared for their role as Executor or Administrator and are then faced with an unfamiliar task during an emotionally difficult time.

Because it is difficult to understand the complete process, Executors and Administrators simply start with the most obvious task and slowly progress in what can be a complex process comprising of administration, negotiation, communication and people skills but also has legal, tax and financial implications.

Once a large amount of effort and time has been invested, and the sheer size of the task is understood, Executors and Administrators oftentimes battle on and think seeking assistance is too late, which isn’t the case.

1.3 Other Personal Reasons

Other reasons could be of a personal nature, such as wanting to complete the task yourself in the honour of the deceased person, or that you feel responsible to finalise and distribute the estate yourself as the nominee in the Will or as a responsible next of kin. You may also feel that you are the best placed to manage the Estate based on your professional background or like to be in control of the situation due to mistrust among Beneficiaries.

All reasons above are natural, common and understandable. However, you should remember that you have a choice and that any reasonable costs associated with the administration of an Estate are paid by the Estate. Seeking some assistance or advice along the way is very reasonable and recommended given the complexity and risks covered below.

2. Deceased Estate Administration Options

As with most things in life, there are a number of options to achieve an objective, in this case to finalise and distribute the Deceased Estate according to the wishes and the relevant legislation.

2.1 Handing over Executorship

You can be hands-off by engaging an Estate Lawyer to manage the Deceased Estate as the legal representative. Some law-firms shy away from this arrangement as they would take on the fiduciary duty.

2.2 Complete Legal Support

You can engage an Estate Lawyer to manage the entire administration process for you and you will simply be providing information, documents and sign documents as the Executor or Administrator.

+ Legal risks and requirements are understood and can be dealt with

+ This is likely the least strenuous for you

– You will still need to provide documents, background information and sign documents

– High cost to the Estate

2.3 Complete Administrative Support

You can engage an Estate Administration service to guide you and manage administrative aspects of the process for you. You will still be responsible and provide information, liaise with Beneficiaries, make decisions and lodge documents where required in person. Where specialist advice is required, a Lawyer, Accountant, Tax Accountant or other will be engaged.

+ Most administrative tasks are done for you to save valuable time

+ Specialists can be engaged with specific questions to save time and money

– You will still need to provide documents, background information and sign documents

– Reduced cost to the Estate

2.4 DIY Executor of Estate

You can complete the process yourself and accept all the risk if you don’t complete the necessary tasks and legal requirements that are specific to your situation.

+ Cheapest option for the Estate (unless when you need to defend yourself or the Estate at a later stage if something was missed or not done correctly)

+ May seem faster but at the risk of taking shortcuts

– Very time consuming and demanding on you

– You may not comply with all legal requirements that apply to your situation and you may become personally liable

2.5 DIY Executor of Estate with Support When Needed

You can still complete the Deceased Estate administration with support or advice as and when required. For example, you could compile all the important documents to get a good understanding of the Estate and complete an initial consultation with a lawyer to identify any potential risks and legal requirements you need to adhere to. Depending on the risks identified initially or along the way and simplicity of the Estate, you can choose to complete the administration yourself and only seek advice from an Estate Lawyer, Accountant or Tax Accountant when needed.

+ You still keep control of the process and are actively involved

+ You are well informed about any risks and how to mitigate those

– You may still miss something along the way

– Slightly more expensive than the DIY option

simplyEstate can help you with all administrative tasks, planning your next steps and assist with engaging an Estate Lawyer when needed to save you time and money.

3. What a DIY Executor of Estate Is

As the name suggests, being a do-it-yourself Executor of Estate is when an Executor or Administrator choose to manage the affairs of the Deceased Estate without the assistance of an Estate Administration lawyer. This means you’ll be performing all your Estate Administration duties and responsibilities on your own, without legal advice and support.

If you wish to take this route, there are various guides and information available online.  You should be aware that each Estate is different and generic information may not be enough in your situation. simplyEstate wants to empower Executors and Administrators to complete as much of the administrative tasks themselves. However, it is important to seek appropriate professional advice in specific situations or to establish if risks need to be managed.

4. Benefits and Risks of Being a DIY Executor of Estate

People who choose to be a DIY Executor of Estate and tackle Deceased Estate Administration themselves do so for the following perceived benefits:

• You may be able to save the Estate a few thousand dollars in legal fees, which will benefit Beneficiaries who will receive a slightly larger inheritance but puts you at greater risk.
• It may seem to save time when not having to engage a Probate Lawyer and get on with the tasks at hand straight away.
• Personal reasons such a sense of personal responsibility or honour towards the deceased person and their wishes.

However, the DIY Estate Administration process can also be fraught with risks and complications without the expert guidance of a Probate or Estate Administration lawyer. For example, if there is no Will, you will need legal advice. You must also understand and apply the Intestate rules upheld in the relevant state or territory.

Also, there is always the risk of personal liability. If the Executor or Administrator does not comply with legislated processes or time-frames, and funds need to be covered from any resulting issues (e.g. a creditor is owed money or the ATO is owed or tax), the Executor or Administrator may be liable to pay these (and related legal costs) from their own pocket to defend themselves.

Or you could commit any one or some of the common mistakes Executors and Administrators make. These include prematurely administering the Estate or delaying the process without justification, failing to keep records or ensure proper documentation, mishandling Estate funds, distributing assets before paying off debts and others. You could also experience dissent or disagreements with Beneficiaries or the Estate could be sued making the task of administering the Estate a very stressful experience.

To avoid such complicated (and possibly costly) situations, it’s usually better to have someone reliable and well-versed with inheritance laws that you can turn to for the appropriate legal advice.

5. The Importance of Using a Guide and Specialised Tools

No matter if you choose to take the DIY route or another approach to Estate Administration as described above, it always pays to be well informed and prepared. simplyEstate provides Australia’s most comprehensive Deceased Estate Administration Guide with step-by-step guidance and Executor Checklists & Tools. Using these will allow you to stay on top of everything, be specific in your questions and have a plan.

6. Important Reminders

While you are free to decide between engaging legal Estate Administration services and taking the DIY approach, we would always recommend a blended approach that includes seeking legal and other advice when needed. This could be at the outset to identify any pitfalls, so you can be sure to be best prepared and know what you need to comply with, or as you encounter possible challenges.

simplyEstate can assist you with establishing what you can prepare ahead of a meeting with a lawyer if you like to be well prepared or save time and money. Book a phone appointment and we’d be happy to discuss your approach.