Under the Probate and Administration Act 1898 (NSW) a minor (child under 18) cannot administer an estate. The RMB Lawyers Wills & Estates & Disputed Wills division explains the process when a minor is a beneficiary of a Will but there is no executor to administer the estate on their behalf?
NSW Supreme Court’s Protocol for Minors protects beneficiaries in these cases, which mostly occur in intestacy matters (where a person dies without a Will) where the estate is to pass to underage children – such as the tragic example of the surviving children of parents killed in a car accident.
In that situation, the application for administration of the estate will generally need to be supported by an administration bond - basically a promise by the applicant for administration to properly comply with their obligations to the beneficiaries. Such a bond usually needs to be backed by two sureties – promises by other persons to pay the money to the estate if the administrator breaches their obligations. They must provide an affidavit to satisfy the Court that they hold sufficient assets to make such a promise.
It may be difficult to obtain willing and able sureties, so what happens if they cannot be obtained? Well, if the administrator is not the legal guardian of the minor beneficiary in question, that guardian can formally consent to the Court waiving these onerous requirements. They are not required to consent, and nor can a guardian consent if they are the person intending to administer the estate in the first place.
Enter the Protocol for Minors. To comply with this Protocol, the administrator is required to give a formal (and comprehensive) undertaking to deposit the minor beneficiary’s entitlement with the NSW Trustee and Guardian following distribution of the estate.
The undertaking must be signed by the administrator and served on the NSW Trustee and Guardian, and then evidence provided to the Court. If satisfied, the Court will be able to make a grant of administration to the applicant.
Once the funds are deposited with the NSW Trustee and Guardian, those funds can be released to the beneficiary at age of 18, by that person making an application to the Trustee. In the interim, the person with parental responsibility with the minor can approach the Trustee for advance of funds for the minor’s benefit prior to that time.
The process is complex, and highlights the importance of choosing an executor when doing a Will with minor beneficiaries.
If you or your family have further questions about executors or your Will in general, your first step should be to contact our office to arrange a free consultation. You can contact us by by phone or our 'Ask a Question' tool on our website.