The death of a loved one not only causes grief and mourning, but may also burden you with the responsibility to settle affairs.

Don’t let this paperwork overwhelm you as you cope with your loss. A solicitor can help you administer the estate. You can contact me to ensure everything goes smoothly with regard to your loved one’s tax affairs.

In the meantime, here’s a glimpse of what you can expect.

Getting Started

You are only responsible for settling the deceased’s affairs if you have been named the Executor of the Will. If no valid will exists, you must apply for a Grant of Probate in order to be able to execute the estate.

Additionally, there are different laws governing assets and income within each Australian state. You’ll need to follow the laws of the state in which the deceased lived when they died (regardless of where they actually died). You can contact the state’s Public Trustee Office for more information about inheritance laws.

Taxes
As Executor, you are responsible for paying the deceased’s debts and finalising any business on their behalf. This includes taxes.
A final income tax return, sometimes called a date of death tax return, must be completed on the behalf of the deceased. You’ll then need to receive confirmation from the Australian Tax Office that the taxes have been finalised.

Other Duties of the Executor
Besides arranging for the final income tax return, the Executor is also responsible for carrying out the following duties (listed roughly in the order that they are performed):

• locating the will
• arranging the funeral
• applying for probate
• obtaining a death certificate
• informing investment bodies of the death
• checking insurance policies – home, contents, car, life, health
• checking superannuation policy
• informing Centrelink
• locating and assessing the value of assets
• paying debts, income tax and funeral expenses
• transferring assets and paying stamp duty
• distributing the surplus to beneficiaries

Other Tax Considerations

If the deceased had more debts than assets, the Executor will not administer the estate. Instead, the estate is dealt with as if the deceased had been bankrupt.

Also, beneficiaries may be surprised to find themselves paying tax on income received from insurance policies or superannuation. This happens when beneficiaries are explicitly named in the policy and the income is delivered directly to the beneficiaries rather than passing through the estate.

When income passes through the estate in order to be distributed by the trustee, the trustee is responsible for paying the income tax.

Declining Your Role as Executor

In this time of grief, you may not feel up to performing your role as Executor. You may defer that responsibility to someone else. In some cases, more than one Executor may be named in a Will.

If you are the sole Executor named in the Will, you will need to apply to the Court in order to have someone appointed as administrator of the estate.

Keep in mind that you cannot change your mind once you have declined your role as Executor.