Probate and Administration of Estates
When do you require the services of a Lawyer?
In some circumstances it is not necessary to see a Lawyer. If there is a bank account with minimal funds and the only expense is the funeral account then it is not necessary to see a Lawyer. However if the administration of the estate is more complicated or you are not certain then you may choose to use your Lawyer to assist you in the administration of the deceased’s estate. It is your choice.
It is necessary to see your Lawyer if Probate is required.
When is Probate required?
If the deceased owned Real Estate either in their own name or with someone else as tenants in common then Probate will be required. It will also be required if the deceased held funds in their own name in a financial institution or in Managed Funds. However, if the amount involved is not great then the financial institution or Managed Fund may be prepared to release the funds without a grant of Probate. This varies from institution to institution. If Superannuation is to be paid to the Estate then the Trustee of the Super Fund may also require Probate. We have prepared a separate brochure setting out the requirements of various financial institutions which you may find helpful.
What is Probate?
In certain circumstances an executor will need to apply for Probate. A Grant of Probate means that the Supreme Court of New South Wales has formally approved the will of the deceased. This formal approval will then allow the executor to collect the assets of the deceased, arrange payment of all of the deceased’s debts and then distribute the estate in accordance with the terms of the deceased’s will.
In simple terms Probate is official recognition by the Court that the will is valid and the executor has the legal capacity to arrange the administration of the deceased’s estate. Probate will always be necessary if property is held in the sole name of the deceased or where a financial institution requires Probate before they will release the deceased’s assets. Your Lawyer can find out for you whether Probate is required or whether the estate can be administered without going to the expense of obtaining Probate.
What is Letters of Administration?
If a person dies without a Will rather than apply for a grant of Probate where there is a Will, the administrator of the estate will need to apply for a Grant of Letters of Administration. The administrator making the application for a Grant of Letters of Administration must be a person who would be a beneficiary under the laws of intestacy. This is usually the partner, parents or children of the deceased.
Once the Court issues a Grant of Letters of Administration the administration of the estate proceeds on the same basis as if there was a Grant of Probate. The administration then has the power to collect in the assets of the deceased, pay all debts and funeral expenses and then distribute the estate.
What should you take to see your Lawyer?
Your Lawyer will generally require the Will, the death certificate, the funeral account and general details of all assets and liabilities of the deceased. In many circumstances all of this material is not immediately available and your Lawyer will advise you what documents are necessary to administer the estate.
Who should go to see the Lawyer?
It is the Executors responsibility to administer the estate and they should see their Lawyer. There is no obligation on the Executor to see the Lawyer who prepared the Will or who acted for the deceased. It is for the Executor to decide who else they may wish to take to the first appointment with their Lawyer.
Your Lawyer can assist you to arrange payment of the funeral account quickly to ensure that any discounts for early payment are available to you. Arrangements can also be made to close bank accounts and distribute those funds to the beneficiaries named in the Will of the deceased. If there are shares then your Lawyer can arrange for the shares to be sold or transferred direct to beneficiaries of the estate.
If there is a property in joint names then your Lawyer will arrange for the property to be transferred into the name of the surviving joint tenant. This can be done without obtaining Probate.
Your Lawyer will advise you whether it is necessary to obtain Probate of the deceased’s Will. If Probate is required your Lawyer will arrange to ascertain the value of all estate assets and liabilities, arrange all necessary advertisements in a local newspaper and prepare the probate documents for filing in the Probate Division of the Supreme Court of New South Wales. Once Probate has been granted your Lawyer will arrange for all assets of the deceased to be dealt with in accordance with the Will. This might involve transferring property into the name of the Executor and then arranging the sale of that property, arranging the sale or transfer of shares and the closure of bank accounts. Once all assets have been collected and debts paid the estate is then distributed to the beneficiaries named in the Will.
Is there a formal reading of the will?
There is no legal requirement that there be a gathering where the will is read out. However there is a legal requirement to the effect that anyone named in the will, or in a prior will is entitled to ask for and be given a copy. In addition the following persons are entitled to ask for and be given a copy:
- the surviving spouse or de facto partner,
- issue of the deceased
- a parent or guardian of the deceased
- any person entitled to a share of the estate if the deceased person had died without a will
- Any parent or guardian of a minor named in the will or who would inherit if the deceased died without a will
- Any person, including creditors, who may have a claim against the estate
- An attorney under an enduring power of attorney made by the deceased
- Any person committed with the management of the deceased person’s estate under the Protected Estates Act immediately before the death of the deceased.
How long does it take to obtain a Grant of Probate?
Firstly the law requires the Executor to advertise their intention to make an application for a Grant of Probate in the Supreme Court of New South Wales. The advertisement must be placed in a newspaper which circulates in the area where the deceases resided at the date of their death. An application for a Grant of Probate cannot be made to the Court until 14 days after the advertisement has appeared in the paper and until the official death certificate is received from the Registrar of Births Deaths and Marriages. The Certificate is lodged with the Court. You do not get it back.
The application for a Grant of Probate includes an Inventory of the assets of the deceased. The application can therefore not be lodged until full details of the assets are available. If replies from those organisations holding assets of the deceased are received by your Lawyer within 14 day of placing the advertisement in the local paper then the application of a Grant of Probate may be lodged immediately. However in some cases it can take longer than 14 days to put together full details of the assets. In most circumstances it is possible to lodge the application for a Grant of Probate within one month of first seeing your Lawyer.
Once the application has been lodged with the Supreme Court of New South Wales, the Registrar will check the documents and then issue the Grant of Probate to your Lawyer. The time taken by the Registrar to issue a Grant of Probate depends on the then workload of the Court. In many cases the Court can take as little as one week to issue the Grant of Probate. However realistically you should allow the Court approximately 2-3 weeks to process the application and issue the grant of Probate.
Who sees the Grant of Probate?
The Probate document becomes a public document so anyone can obtain a copy from the Supreme Court. This will include a copy of the will. However not everyone can get a copy of the Inventory of Property which is in the Probate document. This is only available to a beneficiary.
What is the cost of making an application for a Grant of Probate?
The Court charges a filing fee for making an application for a Grant of Probate. The fees as at 1 August 2011 are:
- Probate (less than $50,000) - Nil
- Probate ($50,000 or more, but less than $250,000) - $711.00
- Probate ($250,000 or more, but less than $500,000) - $898.00
- Probate ($500,000 or more, but less than $1,000,000) - $1,355.00
- Probate ($1,000,000 or more) - $1,803.00
The legal costs in relation to an application for a Grant of Probate are fixed by the scale of costs prescribed by the Court. These costs do not cover additional work that may be involved in administration of the Estate after Probate is granted. The costs are as at 1 July, 2016:
Scale regulated under the Legal Profession Act 2004
|Disclosed value of assets||Costs payable|
|Not exceeding $30,000 |
Plus $13.33 for each $1,000 up to $30,000
|Exceeding $30,000 but not exceeding $150,000 |
Plus $5.90 for each $1,000 in excess of $30,000
|Exceeding $150,000 but not exceeding $1,000,000 |
Plus $4.47 for each $1,000 in excess of $150,000
|Exceeding $1,000,000 but not exceeding $3,000,000 |
Plus $1.66 for each $1,000 in excess of $1,000,000
|Exceeding $3,000,000 but not exceeding $5,000,000 |
Plus $1.10 for each $1,000 in excess of $3,000,000
|Exceeding $5,000,000 but not exceeding $10,000,000 |
Plus $0.90 for each $1,000 in excess of 5,000,000
What happens after the Court issues a Grant of Probate or Letters of Administration?
After the Court has issued a Grant of Probate the executor is then in the position to collect in the estate and attend to payment of all debts and funeral expenses.
In relation to the payment of funeral expenses we recommend that you read the material on our web site entitled “Financial Institutions Requirements for Release of Funds”.
It many cases it may be necessary to organise a final tax return for the estate. We would therefore recommend that you seek advice from an accountant as to whether a final tax return is necessary. We recommend that you read the material on our web site entitled “Finalising Income Tax Affairs for an Estate”.
The executor is bound to comply with the wishes of the deceased as set out in the will unless all of the beneficiaries agree to vary the Will or someone challenges the Will in which case the Court may adjust the entitlements of the beneficiaries.
Depending on the nature and value of the assets it is usually prudent for the executor to seek advice from an accountant or financial planner regarding the most appropriate way to distribute the estate after taking into account issues such as capital gains tax and superannuation death benefit taxes. On the other hand if the assets only include bank accounts and a principal place of residence it may not be necessary to seek financial advice.
The executor also has other duties with respect to the estate. These duties are set out in the material on our web site entitled “Duties of the Executor”.
When can the Estate be distributed to the Beneficiaries?
Once assets have been collected and debts paid there can be a distribution according to the will. However, the Executor will be liable for any claims on the Estate if the distribution takes place within 6 months of the date of death. The Executor will be released from this liability if the distribution is after 6 months from the date of death and a notice prescribed by the Rules of Court is published.
Your lawyer should discuss with you the timing of the Estate distribution.
*This material is provided by RMB Lawyers to our clients for their information on a complimentary basis. It represents a brief summary of the process applicable to probate and administration of deceased estates as at June 2016 and should not be relied upon as a definite or complete statement of the law or the procedures necessary to administer deceased estates.
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