Executor to deal with my partner’s business.
QUESTION:
My partner runs his own business which deals with the building trade. He only employs subcontractors on a needs basis and does not directly employ anyone. I am the executor of his will. If my partner were to decease before me, can you advise whether I would be able to continue to manage his business affairs while I waited for Probate or would everything have to come to a halt until Probate was obtained?
If I had to wait for Probate, how would I deal with situations like paying the subcontractors for work completed and outstanding bills that might exist at the time of my partner’s decease? He has money coming in and going out on a daily basis. Would his bank be obliged to freeze his account until Probate was obtained or would they permit the payment of wages and payment of bills?
My partner believes that I would be able to carry on regardless of Probate not having been granted.
Please note, I do not have any involvement with my partner’s business in any way nor do I have authorisation to do anything on behalf of his business as things currently are.
ANSWER:
Being named as an executor of a will is a much larger responsibility than many people realise. Depending on the actual terms of the will, and the size of your partner’s business, sorting out his business affairs as an executor could be either reasonably straightforward or very challenging.
As executor you would need to identify and deal with all of the deceased’s assets, including his business interests. However, without any information about the nature and extent of the executor’s powers contained in the will, this response can be framed only in very general terms.
You do not indicate whether the business is operated as a sole trader, a partnership or a company. If operated as a sole trader, your partner’s death could negatively impact on the business to such an extent that it must close. It is also possible that the business bank accounts will be frozen on your partner’s death and unable to be operated until probate is granted.
Unless there is authority in the will for the executor to carry on the business, you will not have the power to do so and any action taken without legal authority may expose you to personal liability.
It is strongly recommended that you and your partner seek professional legal advice to explore the issues likely to arise in the administration of your partner’s estate. This will give your partner the opportunity to ensure his will appropriately empowers his executor to administer the estate in the way that he has envisaged. The Law Society of SA (telephone 8229 0200) can refer people to lawyers who work in this area.
The information above was provided by the Legal Services Commission. For preliminary legal advice about wills, call the Commission’s helpline on 1300 366 424.
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