Estate Administration

Your first steps

Knowing where to start is half the battle. Outlined below are our recommended first steps to get an estate administration started.

Step 1

Contact us to see if we hold the will or if we can assist you in finding the will.

Review the will to identify who the executor/s are and to see if there are any directions on burial or necessary steps to be taken before the funeral

Celebrate the life of the deceased.

Step 2

Contact us for a mutually convenient time for the executors to meet with us and to discuss the contents of the will.

We can accommodate interstate executors by using video or telephone meetings.

We will assist you in preparing for an initial meeting so we can give you a practical and realistic assessment of the estate.

Step 3 - initial consultation

At the initial consultation, we can assist you in:

• understanding the terms of the will;
• determining whether it will be necessary to apply for a grant of probate or letters of administration in either Queensland or New South Wales to deal with the assets of the estate;
• determining whether there may be any issues of dispute which may arise during the administration of the estate;
• how much of the estate administration you will attend to yourself;
• what tasks you need our assistance with;
• helping you understand your role and obligations as an executor; and
• taking a practical, sensitive and common sense approach to the administration of the estate, to work with you and to make the process as seamless as possible in what can, often be, a difficult period of time.

Understanding your role and obligations as the executor or administrator of an estate

What it means to be an executor

If you have been appointed an executor under a will, it means the deceased has put his or her trust in you to administer his or her estate. You may be a sole executor or you may be appointed with other individuals (up to four individuals can be appointed to act together as executors).

If you do not wish to be an executor, or for some reason you are unable to act as executor (i.e. due to incapacity or distance), you may renounce your right to act as executor. This means the other named executor/s will act as the personal representative of the estate (personal representative).

Renouncing your right to act as executor does not affect your entitlement as a beneficiary to the estate assets.

What if there is no valid will?

If the deceased did not leave a valid will (they have never made a will or their will has been revoked during their lifetime) this means the deceased died intestate and the assets of the deceased will be administered according to the rules of intestacy of the State where the deceased resided OR the State where the deceased’s real estate is located at the date of death.

The next-of-kin of the deceased is entitled to apply for letters of administration of the estate. Who is the deceased’s next of kin and is entitled to apply to the Court is determined by law. This means that person will be appointed by the Court to act as administrator of the estate and will have the same powers as though they had been appointed an executor under a will.

Until an administrator has been formally appointed by the Court, nobody has the power to sign documents, deal with the deceased’s assets, pay the deceased’s liabilities or to administer the estate of the deceased.

Your responsibilities as an executor or administrator

An executor (appointed by the deceased’s will) or an administrator (appointed by the Court) are both known as a personal representative.

In summary, the duties of a personal representative include:

• ascertaining the assets and liabilities of the estate and their values;
• ensuring the funeral and testamentary costs are paid;
• ensuring all debts of the deceased are paid;
• if necessary, obtaining a grant of probate of the will or a grant of letters of administration of the estate;
• arranging for the redeeming or selling of the assets;
• ensuring any necessary final tax returns are lodged and any tax liability is paid; and
• distributing or transferring the assets to the beneficiaries pursuant to the will of the deceased or the rules of intestacy in the applicable State.

If this sounds hard or unfamiliar, don’t worry, Fox and Thomas’ role is to help you undertake these tasks and ensure you complete your duties as a personal representative successfully.

What steps are involved in an estate administration?

Locate the will

If the deceased left a will, it should be located and read as soon as possible after death as it may express wishes for funeral arrangements and, more importantly, to confirm who has been appointed as the executors.

When Fox and Thomas make a will for a client, we hold the will (along with any other estate planning documents) in our safe custody on behalf of the client.

If another party, organisation or law firm holds the original will, we will be able to assist you to obtain the original will from them in order to administer the estate.

If you do not believe the deceased made a will prior to death, and you intend to apply to the Court to be appointed an administrator, you must undertake sufficient enquiries to confirm the deceased did not leave a will or other testamentary document. We can help you with those enquiries.

Funeral arrangements and funeral account

While it is usually the family of the deceased who arranges the funeral, ultimate responsibility for the burial or cremation of the deceased’s lies with the personal representative. Unless the will provides specific directions, the personal representative is entitled to determine the funeral arrangements and, in so doing, must ensure the cost of doing so is reasonable given the value of the deceased’s estate.

The funeral account may be paid direct from the deceased’s bank account by taking any invoice received from the funeral director to the deceased’s bank.

If the personal representative or a family member pays the funeral account they are entitled to be reimbursed from the estate.

The death certificate

Most funeral directors now order a death certificate as a part of their service.

The death certificate should issue within 30 days of the funeral and is normally posted from the state registry of Births, Deaths and Marriages to the address nominated by the person who deals with the funeral director.

An original copy of the death certificate provided by Births, Deaths and Marriages must be provided to us as it forms an integral part of the legal process in proving the deceased’s death to any asset holders.

Assets and liabilities of the estate

As the personal representative of the estate, you will need to:

• identify and make a list of the assets of the estate and their values;
• ensure the assets are maintained and protected (ensure insurances are paid and registrations are kept current); and
• identify what liabilities or invoices are owing at the deceased’s death (eg: mortgage payments, rates, insurances, registrations, medical or pharmaceutical accounts, electricity or telephone accounts, taxation or BAS payments owing to ATO).

Seek legal advice about the estate administration

Please contact us to arrange a mutually convenient time to meet with us.

If you do not live in Goondiwindi and do not wish travel to our office, we are able to meet with you by telephone or by video conference.

In the meeting we will:

• read through the will to answer any of your questions and ensure you understand the terms of the will;
• confirm your responsibilities and any critical dates you need to be aware of as a personal representative;
• obtain your instructions with respect to:
  • the assets and liabilities of the estate;
  • whether it is necessary to obtain a grant of probate of the will or a grant of letters of administration of the estate;
  • what tasks you will attend to as a personal representative; and
  • what tasks you would like us to assist you with in the administration of the estate.

So that we can advise you fully in our meeting, you will need to bring certain information and documents relating to the parties to the estate and the assets and liabilities of the deceased with you to the meeting.

Taxation

It is important to ensure:

• that if necessary, a final tax return is lodged on behalf of the deceased person and for the estate of the deceased person; and
• that any tax liability owed by the deceased person or by the estate is paid, prior to a distribution of the estate assets.

We recommend you speak to an accountant to find out if it is necessary to lodge a final return for the deceased person or for the estate.

Grant of letters of administration

What is grant of letters of administration

When a person dies without leaving a valid will and therefore not having appointed an executor to administer their estate, there is no person with the legal authority to make decisions, sign documents or deal with the deceased’s assets and liabilities.

Only a person who is entitled to the whole, or a part share of the estate (the next-of-kin of the deceased) is entitled to apply to the Court for letters of administration of the estate. The law determines who is entitled to apply for letters of administration. Once the person has been appointed by the Court to act as administrator of the estate, that person will have the same powers as though they had been appointed an executor under a will.

Before you apply for letters of administration, you must carry out a thorough search for the will of the deceased or any document written by the deceased that sets out their testamentary intentions. This search usually includes:

• the deceased’s paperwork in their home and office;
• any security packets held by the deceased with banks or other financial institutions;
• any law firms who have undertaken legal work for the deceased during their lifetime;
• the deceased’s accountant and financial advisor; and
• the Public Trustee of any state in which the deceased has lived.

A grant of letters of administration (Grant) is an order made by the Supreme Court of the applicable State which allows the person appointed as administrator to deal with and distribute the assets of the deceased’s estate.

The decision to apply for a Grant is normally made once the next-of-kin has identified the assets of the estate and whether it is necessary to obtain a Grant to collect and deal with those assets.

If the estate of the deceased is small, a Grant may not be necessary, and it may be appropriate to avoid the cost and time in applying for a Grant.

In some circumstances, even when it is possible to deal with the assets of an estate without a Grant, it may be prudent for the next- of- kin to obtain a Grant. We will provide the next-of-kin with advice after considering whether they should administer the deceased’s estate without applying for a Grant on the risks of doing so. These risks will be determined in relation to the particular circumstances of the deceased’s family situation, asset holdings and liabilities.

As an administrator with a Grant, you are afforded protection from personal liability if a subsequent claim is made on the estate by any person for provision from the estate of the deceased and:

• 6 months has elapsed from the date of death; and
• you have distributed the assets of the estate correctly pursuant to the rules of intestacy of the relevant State.

You are not afforded the same protection from personal liability as next-of-kin informally administering the deceased’s estate without obtaining a Grant.

Financial institutions have varying requirements which may allow the next-of-kin to deal with the funds of the deceased held by that institution without a Grant. Whether a Grant is required or not will depend on how small or large the asset held by the deceased is in value.  If the asset held by the financial institution is large it will be necessary to obtain a grant of letters of administration.

Once you have been granted letters of administration, you will have the authority to collect the deceased’s assets, obtain sufficient information to determine and pay the deceased’s liabilities (including any tax owing) and on finalisation of the estate, distribute the assets to the beneficiaries pursuant to the intestacy rules.

Understanding intestacies

What is an intestacy?

A common misconception is that if you die without a valid will, the “government” will take your assets, and your family will miss out altogether. This is simply not the case. But the lack of a valid will can have emotional, relationship and financial impacts on the family left to sort out the estate.

When a person dies without leaving a valid will, this means they die “intestate” and the rules of intestacy apply when distributing the assets of the deceased’s estate to the beneficiaries.

All about intestacies in Queensland

Who can make decision about the estate of an intestate?

When a person dies without leaving a valid will and therefore not having validly appointed an executor to administer their estate, there is no person authorised to make decisions, sign documents or deal with the assets and liabilities of the deceased person.

The next-of-kin of the deceased is entitled to apply for letters of administration of the estate. The law determines who the deceased’s next-of-kin are and if they are entitled to apply to the Court to be appointed administrator.

A grant of letters of administration (Grant) is an order by the Supreme Court of Queensland appointing an individual or a number of individuals as the administrator with the legal power to administer the deceased’s estate.

Once you have been granted letters of administration by the Court, you will have the authority to collect the deceased’s assets, pay the deceased’s liabilities and on finalisation of the estate, distribute the assets to the beneficiaries pursuant to the Queensland intestacy rules.

Who is entitled to apply for letters of administration of an intestate’s estate?

The priority of persons to whom the Court may grant letters of administration on intestacy is (in descending order):

• a surviving spouse of the deceased;
• the children of the deceased (or if they are under 18, someone acting on their behalf);
• the grandchildren or great-grandchildren of the deceased;
• a parent or parents of the deceased;
• the brothers and sisters of the deceased;
• the children of the deceased’s brothers and sisters;
• a grandparent or grandparents of the deceased;
• uncles and aunts of the deceased’
• a first cousin of the deceased; and
• anyone else the court may appoint.

Any applicant must establish their priority to apply to the Court over others by providing evidence that each person higher in the order of priority is not entitled to or not able to apply for the grant because of death, incapacity or renunciation (where a person confirms in writing that they do not wish to apply to be appointed the administrator).

It is not necessary to establish priority for a person equal to or lower in the order of priority (for example if you are a parent of the deceased you do not need to provide evidence as to why the other parent, or anybody lower in the order of priority, is not applying for the grant).

How are the assets of the intestate’s estate distributed:

The rules of intestacy of Queensland dictate how the assets of an intestate’s estate are distributed. The only exception to this rule is where the deceased owned real estate in another state or territory of Australia, or overseas. If this is the case, that real estate will be dealt with in accordance with the intestacy rules in the jurisdiction in which the property is located.

If the deceased died without a spouse or any children, then the deceased’s family will take the deceased’s estate. Depending on who survives the deceased, we will provide the administrator with advice on who is entitled to a share of the deceased’s estate and assist them with the distribution of the deceased’s assets to the beneficiaries.

All about intestacies in New South Wales

What is an intestacy?

A common misconception is that if you die without a valid will, the “government” will take your assets, and your family will miss out altogether. This is simply not the case. But the lack of a valid will can have emotional, relationship and financial impacts on the family left to sort out the estate.

When a person dies without leaving a valid will, this means they die “intestate” and the rules of intestacy apply when distributing the assets of the deceased’s estate to the beneficiaries.

Who can make decisions about the estate of an intestate?

When a person dies without leaving a valid will and therefore not having validly appointed an executor to administer their estate, there is no person authorised to make decisions, sign documents or deal with the assets and liabilities of the deceased person.

The next-of-kin of the deceased is entitled to apply for letters of administration of the estate. The law determines who the deceased’s next-of-kin are and if they are entitled to apply to the Court to be appointed administrator.

A grant of letters of administration is an order by the Supreme Court of New South Wales appointing an individual or a number of individuals as the administrator with the legal power to administer the deceased’s estate.

Once you have been granted letters of administration by the Court, you will have the authority to collect the deceased’s assets, pay the deceased’s liabilities and on finalisation of the estate, distribute the assets to the beneficiaries pursuant to the New South Wales intestacy rules.

Who is entitled to apply for letters of administration of an intestate’s estate?

The priority of persons to whom the Court may grant letters of administration on intestacy is:

• a surviving spouse of the deceased; or
•  any one or more of the deceased’s next-of-kin
• if the deceased is not survived by a spouse or other next of kin, or those individuals are not suitable (as determined by the Court) to be appointed as administrator, then the Court may appoint anyone else they consider appropriate to act as administrator (including a creditor of the deceased’s estate).

Any applicant must establish their priority to apply to the Court over others by providing evidence that each person higher in the order of priority is not entitled to or not able to apply for the grant because of death, incapacity or renunciation (where a person confirms in writing that they do not wish to apply to be appointed the administrator).

If you are a de facto partner, you are required to provide affidavit evidence of your de facto relationship with the deceased and obtain the consent of the deceased’s adult children (if any) and/or parents of the deceased to your application to the Court.

Unless you are a de facto partner, it is not necessary to establish priority for a person equal to or lower in the order of priority (for example, if you are a parent of the deceased you do not need to provide evidence as to why the other parent, or anybody lower in the order of priority, is not applying for the grant).

How are the assets of the intestate’s estate distributed:

The rules of intestacy of New South Wales dictate how the assets of an intestate’s estate are distributed. The only exception to this rule is where the deceased owned real estate in another state or territory of Australia, or overseas. If this is the case, that real estate will be dealt with in accordance with the intestacy rules in the jurisdiction in which the property is located.

If the deceased died without a spouse or any children, then the deceased’s family will take the deceased’s estate. Depending on who survives the deceased, we will provide the administrator with advice on who is entitled to a share of the deceased’s estate and assist them with the distribution of the deceased’s assets to the beneficiaries.

Understanding a grant of probate

What is a grant of probate?

A grant of probate (Grant) is an order made by the Supreme Court of the applicable State confirming that the will of the deceased is valid and allows the executor/s to deal with and distribute the assets of the deceased’s estate in line with that will.

Do we need a grant of probate?

The decision to apply for a Grant is normally made either:

• once the executor has ascertained the assets of the estate and determined whether it is necessary to obtain a Grant to collect and deal with those assets. If the estate of the deceased is small, a Grant may not be necessary and it may be appropriate to avoid the cost and time in applying for a Grant; and/or
• if there is some question about the validity of the will i.e. the deceased’s capacity at the time of making the will has been questioned.

Financial institutions have varying requirements which may allow executors to deal with the funds of the deceased held by that institution without a Grant. Whether a Grant is required or not will depend on how small or large the asset held by the deceased is in value.  If the asset held by the financial institution is large it will be necessary to obtain a grant of probate.

Once you have been granted probate of the will of the deceased, you will have the legal authority to collect the deceased’s assets and on finalisation of the estate, distribute the assets to the beneficiaries pursuant to the will.

In some circumstances, even when it is possible to deal with the assets of an estate without a Grant, it may be prudent for an executor to obtain a Grant.

A grant of probate can provide some personal legal protection to executors if claims are made against the estate.

If an executor has obtained a Grant, they are afforded protection from personal liability if a subsequent claim in made on the estate by any person for provision from the estate of the deceased and:

• 6 months has elapsed from the date of death; and
• they have distributed the assets of the estate correctly pursuant to the will.