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Duties of an Executor: What are their tax responsibilities?

An Executor is person appointed in a Will to take on certain responsibilities when the will-maker (known as the “Testator”) dies. Those responsibilities include dealing with the will-maker’s assets and liabilities, which often raises the issue of tax.  So what role does the Executor have with a will-maker’s tax issues?

The Executor is effectively put in the same position as the will-maker after the will-maker has died, taking on the deceased person’s tax profile following a Grant of Probate or Letters of Administration, and so must ensure any tax obligations are met. The Executor must do a range of things, including but not limited to –


  1. Contacting the Australia Tax Office (ATO) to advise of the deceased’s death;
  2. Ensuring any outstanding tax returns of the will-maker and/or estate tax returns are lodged with the ATO; and
  3. Paying any taxes that are required (such as Capital Gains Tax or Land Tax) and keeping a record of everything done.


An Executor needs to ensure that all tax obligations are fulfilled, otherwise there can be significant, personal consequences. A case example is as follows –


A person is appointed as an Executor by a will-maker of a small estate. The Will of the will-maker is simple and gifts the estate equally between a small number of adult child beneficiaries (that is, the gift recipients under the Will), who themselves are not well-off and have only minimal assets. The Executor locates and deals with the assets, distributing them in accordance with the terms of the Will.


However, the Executor does not make enquiries of the ATO regarding any outstanding tax of the will-maker, which turns out to be in the order of $10,000.00. The Executor cannot call on the money distributed to beneficiaries because that money has already been spent, so the Executor ultimately has to pay the debt himself.


It is important for an Executor to obtain financial and legal advice to ensure all obligations, including tax responsibilities, are met. In certain circumstances, Executors can find themselves personally liable when all they set out to do was assist their deceased family member or friend in handling their affairs.


If you are an Executor and would like to discuss issues arising out of an Estate, or assistance dealing with an Estate, please do not hesitate to contact our Estate Law Solicitors at Brazel Moore Lawyers on (02) 4324 7699.


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