Product Technical and Regulatory Change

Published: 13 September 2023


Legal personal representatives

In estate planning, one of the first questions that comes up is who should be the legal personal representative (LPR) of the deceased estate. A better question is who should be the ‘executor’, as this is the name of the LPR when there is a valid will for the estate.

If someone dies without a will (known as dying intestate), the LPR is the ‘administrator’ of the estate.

  • What is the role of the LPR?

    Broadly, an executor ensures that the property, cash and other estate assets are distributed, and any debt dealt with, according to the deceased’s wishes (the instructions in the will) and the law.

    An administrator ensures that the estate assets are distributed, and any debt dealt with according to the intestacy laws for the relevant state or territory (generally it’s the jurisdiction where the deceased had lived).

  • What are the LPR’s duties?

    The LPR has specific legal obligations, including the following:

    Locate the will

    The last will may be in the care of an appropriate professional, with a trusted family member or friend, or it may need to be located among the deceased’s personal possessions.

    Assume responsibilities of administration

    The LPR needs to arrange the funeral and notify the deceased's beneficiaries and business associates of the death. They also need to liaise with family, friends, business and legal advisers to identify and value estate assets and liabilities. This may involve gathering documents and securing assets, keys and valuables.

    The LPR can be held personally liable for any damage to property which has not been secured or insured.

    Apply for grant of probate or letters of administration

    The LPR must apply for a grant from the relevant Supreme Court, a process that may take anywhere from two to 12 months or more. For small estates, probate may not be needed, and a copy of the death certificate and the will may be enough to release the funds to the executor.

    Transfer/transmission of assets

    After probate or letters of administration are granted, the LPR will need to claim any life insurance and superannuation entitlements and transfer the deceased’s assets into their own legal custody to administer the estate.

    Manage the estate assets

    The LPR has a fiduciary duty to manage the assets to protect the interests of all parties, before the final distribution of estate assets, and to keep records of administration.

    There is a statutory waiting period (varies between jurisdictions) during which claims may be made against the estate. The LPR must ensure that assets are available to meet any claims, respond to them and resolve them as appropriate.

    Complete tax returns

    Tax-related responsibilities of the LPR include:

    • lodging the final tax return for the deceased person (to date of death)
    • lodging tax return/s for the deceased estate until it is wound up
    • providing for any tax liabilities of the estate before assets are distributed to beneficiaries.

    Make distributions

    The LPR arranges final distribution of the estate, transferring remaining assets and establishing trusts as needed. Assets may either be sold by the executor and the proceeds divided, or assets may be transferred directly and proportionally to beneficiaries. In the latter case there may be complex capital gains considerations including asset cost base determinations.

    Final statements are then sent to beneficiaries and correspondence to confirm that the estate administration has been finalised is sent to relevant parties.

    Administer trusts

    The LPR may need to set up a trust/s, potentially requiring ongoing administration over several years, if a beneficiary is under 18, mentally incapable, or if there are specific instructions in the will.

  • Can there be more than one executor, and can they say no?

    There may be multiple executors named in the will and each can apply for probate – but there is no legal obligation to do so. The executor(s) may renounce their duties or reserve their right to apply for probate at a later date. Legal advice should be sought, particularly where the will does not name another executor.

  • Does the LPR get paid?

    An executor is generally entitled to receive payment (known as commission) for administering a deceased estate, but they do not have to. The commission ranges from 1-3% of the estate corpus (assets less liabilities), plus up to 6% of income earned during administration. Entitlement may differ between jurisdictions depending on factors such as the size of the estate and responsibilities required, time spent performing duties, and the skill of the executor.

  • Is the LPR personally liable when administering an estate?

    The LPR is liable for any loss which the estate incurs from unauthorised or negligent acts, including unjustified delays, not securing assets, or if there is still tax owed after all assets are distributed.

  • How do you choose an executor?

    A person may choose a family member, friend, lawyer, or expert from a will-related service to be their executor. It is useful to have a reserve executor/s in case the person appointed passes away first or is unable to take on duties due to personal circumstances, such as being overseas or incapacitated.

    People should consider what’s involved before nominating or agreeing to act as an executor of an estate. An effective executor needs to be able to deal with legal, financial and accounting issues, and the responsibilities are often onerous, stressful and time consuming.

    Ideally, the will maker should choose someone younger than themselves, but over age 18, who is trustworthy, has the capacity to take on the responsibility, and who will provide honest communication and manage the expectations of beneficiaries.