Deceased Estates

Topics

Overview

It’s easy to feel overwhelmed when a loved one passes away. Working out what to do next can seem daunting but we are here to help.

One of the most important things to remember is that you need time to grieve and take care of yourself and any children and dependants.

Have realistic expectations on how long it will take to administer the estate. As a rule of thumb, it often takes 6 to 12 months to fully administer most estates however this very much depends on the individual circumstances and complexity of the estate. If disputes arise or persons entitled to a share of the estate cannot be easily located, the process could take a lot longer (see timeframes).

Prioritise what needs to be done now (see first steps) and what can wait a few weeks (see next steps) so that you and your family can focus on the grieving process.

First Steps

• If you’ve not already done so, talk to a funeral director to make funeral arrangements. In addition to planning the funeral, the funeral director will usually help you complete the required forms, register and apply for a death certificate and notify Centrelink.
• Check if the person who died (the deceased) had a Will. A Will may include instructions about their final wishes such as if they want to be buried or cremated. It will also have details about the Executors of the Will and whether a Guardian has been appointed for any children under the age of 18.
• Solicitors change over time. There is no obligation to use the solicitor that prepared or holds the original Will (if there is one). You can use any solicitor that is the most convenient for you.
• Notify any banks, Superannuation Funds and Life Insurers (if any) of the death as soon as possible. If you hold any joint bank accounts, you will still be able to access your funds however the bank will immediately place a hold on any accounts solely in the deceased’s name. If you withdraw money from any accounts solely in the name of the deceased, you may be personally liable to account for those funds. Usually, banks will agree to release funds from the deceased’s account to pay funeral expenses directly to the funeral director.
• Do not drive any motor vehicles registered solely in the name of the deceased until the registration has been transferred to the executor or a relevant beneficiary. In the event of an accident, the driver may be personally liable for any damages and in some circumstances the estate may also be liable. If you rely on the vehicle for your personal transport, contact Service NSW to arrange transfer of the registration before using the vehicle and take out insurance in your own name.
• If the deceased owned a home, make sure you ring the insurer to notify them of the death and ask them to confirm their requirements. If the deceased lived on their own, insurers often require the gardens to be maintained and the mailbox to be cleared on a regular basis (so the house still looks lived in). Some insurers may refuse to pay out a claim if the house is not maintained and the property is subsequently damaged or broken into. Each insurer will have their own minimum requirements and as a home is usually the estate's most valuable asset, it is important to make sure the insurer's requirements are met.

Next Steps

What happens next really depends on whether the deceased had a Will, Superannuation, Life Insurance and the value of the estate.

The ‘estate’ simply means all the assets and liabilities a person had at the time of their death. Assets include obvious things like a house, car and bank account but assets also include all of the person’s worldly possessions including personal effects, shares, intellectual property (such as Trademarks, Copyrights, Patents, Design Rights, Trade Secrets).

Superannuation and Life Insurance

Superannuation and Life Insurance (if any) is generally paid directly to the nominated beneficiaries. As everyone’s personal circumstances are different, whether these applications can wait may depend on your current financial position. If you are clearly nominated as a beneficiary in the policies and require access to funds urgently, you may be able to apply to the trustee of the fund to access these benefits pretty quickly. If however the trustee is unable to satisfactorily determine who the funds should be paid to, the trustee may in some circumstances require a grant of Probate or Letters of Administration before they release funds.

Probate
(if there is a valid Will)

If there is a valid Will, a grant of Probate may be required depending on the type and value of individual assets. If one particular asset requires Probate, all assets are included in the Probate application.

An application for a grant of Probate is made to the Supreme Court to prove the last Will and Testament of a deceased person. A grant of Probate authorises the executor(s) to administer the estate of the deceased in accordance with the law. This includes collecting assets, paying debts and distributing the remaining assets to the beneficiaries in accordance with the Will.

To prepare the application we need to locate the original Will, advertise your intention to apply for a grant of Probate, identify all relevant assets, write to the asset holders to obtain their requirements and determine the value of the assets as at the date of death, obtain estimated values for other assets such as real estate and motor vehicles, firearms, artwork and the like (where applicable). With this information we prepare the necessary Court documents and Affidavit(s), review and arrange for you to sign the relevant documents and file the application with the Court.

Upon receiving the grant of Probate from the Court, we will advertise your intention to distribute the estate (please see the section below in relation to timeframes), collect the assets, arrange payment of estate debts (where applicable), transfer assets and pay legacies to beneficiaries and distribute the final residue in accordance with the Will.

If there is a valid Will although no executor available (or willing) to apply for Probate, a beneficiary under the Will can apply for grant of Letters of Administration with the Will attached. If there is more than one beneficiary, one or more should apply with consent from the others. The process is otherwise very similar to an application for a grant of Probate.

Letters of Administration
(if there is no valid Will)

If the person died without a Will, they are said to have died intestate and their assets will be dealt with under the rules of intestacy. Under these rules, eligible relatives are entitled to inherit from the estate.

One (or more) eligible persons may apply to the court for Letters of Administration. In addition to the Probate application steps outlined above, applying for Letters of Administration can be a far more complex process, particularly if there are children from a previous relationship or if any eligible persons have predeceased (died before) the deceased. We will need to source additional information and documents so that the eligible person(s) can prove to the Court that the deceased died without a Will including evidence of any marriages, divorces, birth and death certificates for children and eligible relatives both alive and deceased.

Any eligible relatives who do not join the application must consent to the application. Depending on the circumstances, this can be particularly time consuming. The process of identifying, contacting and obtaining consents from all eligible persons can be especially difficult when eligible persons are estranged, living interstate or overseas or otherwise not in regular contact with other eligible relatives.

Notice of your intention to apply for Letters of Administration must be served on all eligible relatives who do not voluntarily consent to the application.

All costs associated with applying for Letters of Administration are paid from the estate which may (in some circumstances) substantially reduce what is left to be paid out to the eligible parties.

Timeframes

Applications for Probate or Letters of Administration should be filed with the Supreme Court within 6 months from the date of death. If more time is required, an Affidavit giving an explanation to the Court accounting for the delay needs to accompany the application.

Once Probate or Letters of Administration has been granted by the Court, distribution of the estate should not take place until the later of six months after the date of death or 30 days from publication of a Notice of Intended Distribution of the estate. This gives potential creditors 30 days to make a claim on the estate. If you (as the executor or administrator) receive notice of an intention by someone to make a family provision claim against the estate, distribution should not take place until at least 12 months after the date of death. Distributing the estate prior to these times could result in you being personally liable for claims made against the estate.

General Estate Administration

There are times when Probate or Letters of Administration may not be required. If for example there is a valid Will, the estate is very small, there is no real property (real estate) solely in the deceased’s name and there are no significant refunds due (such as a refundable bond from an aged care provider), Probate may not be required. This very much depends on the policies of the individual asset holders (such as the banks). In this situation, General Estate Administration (including the transfer of jointly owned real estate) may be sufficient.