Complete income tax returns – Before an estate can be distributed, it is necessary to obtain a clearance from the Australian Taxation Office. This means the executor will have to give details of all income earned during the current financial year and past years, if the deceased failed to lodge a return. In many cases, the calculation of capital gains tax is involved.
Pay all debts – Creditors, funeral expenses, income tax, fees for administering the estate and out-of-pocket expenses must all be paid. This often requires the executor to sell some assets. Beneficiaries may choose to provide funds to cover these expenses so as to keep the assets of the estate intact.
Divide the estate – When all debts have been paid, the executor is able to distribute the remaining assets according to the directions laid out in the Will. If there is no Will, then assets will be distributed as per State Government legislation.
Establish trusts – Executors are responsible for setting up trusts for beneficiaries. Trusts are required if the beneficiary is under 18 years of age or mentally incapable, or if there are specific instructions in the Will. Such trusts need ongoing administration, often over many years.