Being named as an Executor can be a huge honour.
It means that someone, usually someone close to you, trusted you enough to carry out their final wishes.
This important role also comes with a huge responsibility and in some cases, personal financial risk.
Handled well, being an Executor is a meaningful act of service. Handled carelessly, it can leave you personally out of pocket. So before you start signing things, it’s worth understanding where an executor’s personal liability begins and ends.
Here’s what every Executor in Western Australia should know.
Key points to note:
- An Executor is a fiduciary — in this role, you hold real legal duties, and personal liability if you breach them.
- A major risk is distributing an estate too early, before debts, tax or claims are settled.
- Executors can be personally liable for unpaid tax, missed debts, or losses from mismanagement.
- Waiting the right period, advertising for creditors and keeping good records all reduce the risk.
- Getting proper advice early is the simplest way to protect yourself.
What the role of an Executor entails
An Executor’s job is to collect the deceased’s assets, pay their debts and taxes, and distribute the estate according to the Will.
This seems straightforward in theory, but the law treats an Executor as a fiduciary, meaning you must act honestly, carefully and in the estate’s best interests and there can be serious implications if you don’t.
If an estate suffers an unreasonable loss, you can be held personally responsible. That’s the part that surprises people: the liability can attach to you, not just the estate.
The mistakes that create personal liability
Most Executor liability comes down to a handful of avoidable errors.
1. Distributing too early
This is an extremely important one. If you hand out the estate before all debts and taxes are paid, you can be personally liable for the shortfall.
The same risk applies to inheritance claims. In WA, an eligible person generally has 6 months from the grant of probate to make a family provision claim. Distribute before that window closes, and if a claim succeeds, you may have to make up the difference yourself.
2. Unpaid tax
This is one of the most common and costly traps. The Australian Taxation Office is a creditor like any other. If you distribute the estate before the deceased’s and the estate’s tax affairs are settled, you can be left personally liable for the outstanding tax.
3. Failing to protect estate assets
An Executor must safeguard the estate. This means keeping property insured, securing assets, and preventing loss. Let a property fall into disrepair or lapse on insurance, and you may be answerable for the damage.
4. Poor records or mismanagement
Executors must keep clear accounts and act transparently with beneficiaries. Inadequate record-keeping, unexplained decisions or, at the extreme, using estate funds for yourself, can all lead to personal liability and removal from the role.
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How executors protect themselves
The good news is that nearly all of this risk is manageable with a careful and considered approach. This includes:
- Don’t rush distribution: Wait until debts, tax and any claims are dealt with. The 6-month claim window in WA is a key marker.
- Advertise for creditors: Publishing a notice of intended distribution helps protect you against unknown debts surfacing later.
- Settle tax first: Get accounting advice and hold back a buffer before making any interim distribution.
- Keep meticulous records: Document every decision, payment and communication.
- Get legal advice early: Especially where the estate is large, holds property, or the family situation is complex.
None of this needs to be daunting. It simply means moving deliberately rather than quickly.
When to call in help
Some estates are simple but others involve complex business interests, blended families, pending disputes or significant tax questions. Those are exactly the situations where Executors get caught out.
If any of that sounds like the estate you’re managing, you don’t have to shoulder it alone. We can provide you with estate administration support which takes the personal risk off your shoulders and keeps everything on a proper legal footing.
The takeaway
Being an Executor is a position of trust, and the law expects you to honour it. Personal liability isn’t there to punish good-faith mistakes out of nowhere, it exists because beneficiaries and creditors rely on Executors to do the job properly. Move carefully, settle debts and tax before you distribute, keep good records, and get advice when the estate is complex.
Do that, and you can carry out your loved one’s wishes with confidence, not anxiety.
Speak with us if you’d like a steady hand through estate administration.
Frequently asked questions
Can an Executor be personally liable for estate debts?
Yes. If you distribute an estate before paying debts or tax, you can be personally liable for the shortfall.
How long should an Executor wait before distributing?
In WA, be mindful of the 6-month family provision claim window from the grant of probate. Many Executors wait until debts, tax and any claims are resolved before distributing.
What happens if the Executor gets it wrong?
Depending on the error, an Executor can be ordered to compensate the estate, be removed from the role, and in serious cases face further consequences.
Can I be paid for acting as Executor?
Executors aren’t automatically paid, though the Will may provide for it, and commission can sometimes be sought. Reasonable out-of-pocket expenses are generally recoverable from the estate.
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