Estate Administration & Probate

• Locate the Will;
• Organise for the burial or cremation of the deceased in accordance with their wishes and make the funeral arrangements;
• Have a preliminary conference with family and business associates and ascertain the immediate needs of family members, dependants and business requirements;
• Establish what assets the deceased held and ensure that they are preserved, which may include:
  • if the deceased had residential real estate, you would be responsible for things such as securing the property and ensuring that it has current building and/or contents insurance. There are additional obligations when real property is to be sold;
  • protecting business interests;
  • collecting valuables and income, and
  • keeping surplus funds invested.
• Prepare a statement of the assets and liabilities of the deceased. Assets may include personal effects, securities, real estate, cash and business interests. Liabilities may include debts due to be paid by the deceased such as telephone, electricity and/or gas accounts, mortgages and debts owed by the deceased;
• Apply to Supreme Court for a grant of Probate if required and attend to the legal formalities;
• Realise assets to pay liabilities including the funeral expenses, legal expenses, income tax payable by the deceased to date of death, any valid account paid on behalf of the estate which should be reimbursed from the estate funds, organising preparation of final estate income tax return if applicable;
• Communicate with beneficiaries and attend to distribution of the estate once all the debts of the deceased have been paid in accordance with the gifts and bequests outlined in the Will which may include paying the legacies, handing over specific bequests, transferring funds or assets to beneficiaries, obtaining receipts, preparing final statement for beneficiaries;
• Continuing administration and asset management if required e.g. to manage longer term trusts.

The Deceased’s personal property should be distributed in accordance with the Will. However, often personal and household items will fall into the residuary estate and it is up to the executors to co-ordinate the allocation of personal items in conjunction with the residuary beneficiaries.

The Deceased may have left an informal letter of wishes with respect to the distribution of personal items. While not strictly binding, such instructions are normally respected by the executors and beneficiaries. We can suggest some strategies for handling the distribution of personal items where there is potential for disagreement between family members.

• A “Probate” is a certificate in which the Supreme Court of Queensland officially recognises the Executors named in the Will. By obtaining a grant of Probate the Executors are afforded some protection in respect of dealing with the Deceased’s assets. The Executors can obtain a grant of Probate if necessary to administer the Will and the Estate, i.e. some institutions will not allow you to deal with the Deceased’s assets without a grant of Probate. If the Deceased held shares, bank accounts or some other asset over a value of $50,000 a grant of Probate will usually be required.
• Probate also provides protection to an Executor. You ought be protected from personal liability (provided Probate has been granted) on the basis that payments and distributions made by you were made pursuant to the grant of Probate (provided they are made in good faith and without negligence).
• If a grant of Probate is not obtained and a later Will is discovered, or if the current Will should prove to be invalid, the true beneficiaries of the Estate will be able to recover from you personally their entitlements under the later Will or an earlier Will (should the current Will prove to be invalid). In the event you do not wish to apply for Probate, we recommend publishing a Notice of Intention to Distribute the Estate prior to distributing the Estate funds in full.
• A grant of Probate can be obtained by filing certain documentation with the Supreme Court of Queensland.
• In order to apply for Probate you are required to advertise the Deceased’s death and your intention to apply for Probate in the Queensland Law Reporter. You must then allow 14 days to pass before proceeding with the application for Probate to give others (usually creditors) time to object to Probate being granted.
• The advertising and filing fees associated with obtaining a grant of Probate are approximately $900.00. Legal fees would be in addition to this amount.
• A grant of Probate can generally be obtained in two to six weeks if there are no Testamentary Capacity issues.

In Queensland, you do not need probate to deal with real property, however, many institutions such as banks, nursing homes, share registries and superannuation funds require probate if the assets held are over a certain monetary limit (usually between $25,000 and $75,000).

Even if probate isn’t required to administer the estate assets, by obtaining a grant, the Executors are afforded better protection in respect of dealing with the deceased’s assets, especially if there is a dispute with respect to the validity of the will.

• Executors who distribute the Estate within six months of the testator’s death do so at their peril. Section 44(3) of the Succession Act Qld (the Act) states that:
• No action shall lie against the personal representative by reason of the personal representative having distributed any part of the Estate if the distribution was properly made by the personal representative:
  • not earlier than 6 months after the Deceased’s death and without notice of any application or intended application under section 41(1) or 42 in relation to the Estate; or …
• Should a claim be made against the Estate, the <if ‘Executor.Count’>”1″ ? Executors : Executor> may be held personally liable to the person who brings the claim if they distribute the Estate within six months of the Deceased’s date of death.

• When a person passes away, an individual tax return is required to be prepared for the period from 1 July in the year preceding the date of death up to the date of death if:
  • tax was withheld from the income earned by the deceased; or
  • the deceased earned taxable income in excess of the tax-free threshold.
• If the Deceased had an Accountant prepare tax returns each year, those Accountants will be able to prepare the final individual and Estate tax returns on your behalf. It is advisable to obtain an estimate of the fees involved from those Accountants prior to requesting the returns be prepared. If any uncertainty exists about the deceased’s tax affairs, an enquiry should be made to the ATO.
• If an executor becomes aware of irregularities in an income tax return of the deceased or if further potential tax liabilities come to the attention of the executor, the executor may be held personally liable for any outstanding tax liabilities which result in the subsequent amendment of the deceased’s income tax returns, subject to a right of indemnity from the state.
• An Estate Tax Return may also need to be prepared for a year of income (including the period from the date of death up to the following 30 June) if:
  • the net income of the Estate exceeds the tax-free threshold in any of the first three years following death;
  • the deceased passed away more than three years ago;
  • the Estate received franked dividends or tax was withheld on Estate income;
  • the Estate made capital gains or carried on a business;
  • a beneficiary is presently entitled to Estate income; or
  • all the executors or any of the beneficiaries are non-residents.
• If tax returns are required, you should apply for a separate tax file number for the Estate.
• Whilst there is no death duty payable on the value of an estate, other tax consequences may occur.

• As the <if ‘Executor.Count’>”1″ ? Executors : Executor>, you are authorised to withdraw the funds from the Deceased’s bank account(s) and deposit the funds into an account for the Estate, i.e. as the <if ‘Executor.Count’>”1″ ? Executors : Executor> of the Estate of , which you would control in accordance with your duties as the <if ‘Executor.Count’>”1″ ? Executors : Executor>.
• Please note the Deceased’s existing bank account(s) cannot become the Estate’s bank account(s). When Probate is granted, then a new Estate bank account can be opened in the names of the <if ‘Executor.Count’>”1″ ? Executors : Executor>. Generally, dividend cheques and the like can continue to be paid into the Deceased’s existing bank account(s) subject to the Bank’s policies and procedures.
• The withdrawal of the funds can happen by any means. In the event the bank is aware of the Deceased’s death, the bank will generally freeze all accounts held by the Deceased. You will then be unable to access the funds. If the bank is notified of the Deceased’s death and freezes the bank account the bank may allow you to withdraw funds if you provide it with a certified copy of the Will and the Death Certificate but you would only be able to access small amounts, i.e. $5,000. The bank will usually release funds for funeral expenses etc.
• If the bank account has a ‘substantial amount’ (as determined by the bank) then the bank may request Probate. The reason why the bank will request Probate is to protect itself. The bank wants to be sure that it is allowing the “correct” Executors access to the bank account, i.e. the bank wants to make sure that it is not placed in the situation where it has released funds to an executor and then a subsequent Will is found and the bank then has to try and recoup the funds already paid to the executor.
• Executors also have a duty to keep records and accounts in regards to the Deceased’s bank account. If you withdraw funds from the Deceased’s bank account you must maintain proper and accurate records in regards to how these funds have been applied. Another one of your duties is to ensure that this money is only used to pay the Deceased’s debts and any remaining funds are to be distributed to the beneficiaries in accordance with the Will.

• The original Will
• The original Death Certificate;
• Any Title Searches in relation to properties held in the Deceased’s sole name or jointly owned by the Deceased and another person;
• A comprehensive list of assets and liabilities of the Deceased. These may include:
• Assets of the Deceased
  • money on hand or house or at business;
  • money on deposit in a bank, building society or credit union;
  • bonds;
  • debentures and secured and unsecured notes;
  • moneys due to the Deceased under a mortgage, bill of sale or promissory note;
  • loans owing to the Deceased;
  • motor vehicles;
  • real estate and Crown leaseholds – including rents being received in respect of same.
• Liabilities of the Deceased
  • secured debts;
  • debts under a hire purchase agreement;
  • credit card or bankcard accounts;
  • medical and hospital accounts;
  • the funeral account;
  • miscellaneous domestic accounts, such as electricity, gas, telephone;
  • miscellaneous liabilities, such as account at newsagent, pharmacy, store accounts;
  • litigation on foot or pending; and
  • income tax.
• Contact details for the Beneficiaries named in the Will;
• Latest tax return of the Deceased;
• Whether the Deceased was known by another name or owned property in another name; and
• The Deceased’s last known address.

Services Australia has great information on what to do when a loved one dies and has a handy checklist of who to notify.

By filling out an Advice of Death Form, Services Australia will notify Centrelink, Medicare and Child Support.

Where the Deceased has died without leaving a valid Will, the laws of intestacy will apply. Under Queensland law, the deceased’s spouse (including a de facto partner) and children are entitled to share in the estate. However, if the deceased is not survived by a spouse and/or children, the estate would pass to the deceased’s parents, then siblings followed by more remote relatives.

“Letters of Administration” is a certificate in which the Supreme Court of Queensland officially recognises the Administrator of the estate. The Administrator can obtain a grant of Letters of Administration if necessary to administer the Will and the Estate, i.e. some institutions will not allow you to deal with the Deceased’s assets without a grant of Letters of Administration. If the Deceased held a bank account with a value of $50,000 or more, a grant or Letters of Administration will usually be required. Share registries and superannuation funds may also insist on Letters of Administration.

Executors have the right to claim all of their expenses incurred in the administration of the Estate against the funds of the Estate. They also have a right to claim commission, although family members often choose not to do so. There is no statutory scale for calculating commission, but it is awarded based on the amount of work undertaken by the executor during the administration of the estate. Usually, the amount of commission is assessed as a percentage of the income and capital of the estate. In some cases, an application to the Court will be required (e.g. if there are minor beneficiaries). Please contact us for more information about your entitlement to commission and the level of commission you may be entitled to as an executor.

Superannuation does not automatically form part of a deceased person’s estate? It only forms part of a deceased’s estate if the trustee of the superannuation fund decides to pay it to the estate or the deceased has made a binding death benefit nomination requiring the trustee to pay it to the estate.

Merthyr Law can help executors get a deceased’s member benefits from a superannuation fund to an estate.

Generally, an executor is under a duty to maximise the estate. This includes doing everything they can to ensure any superannuation fund pays the super to the estate.

If an executor wants to have the superannuation paid to someone else, either the deceased had to make it clear in their will that this was allowed, or otherwise the executory would need to renounce (resign) their position as soon as possible and before they make any approach to the superannuation fund trustee.

Executors can renounce their position as executor. It’s best to do this via a certain form. If there are no executors, there are rules about who can apply for Letters of Administration.

If there is enough cash in the bank account, the bank is required to pay for the funeral invoice in priority to any other debts of the deceased.

Usually the funeral home will order this for you and it typically takes between 2 to 6 weeks.

If you aren’t using a funeral home, Services Australia tells you how to register the death.

If there are sufficient funds in the bank to pay the funeral home’s invoice, the funeral home may defer the payment and the deceased’s bank is required to pay the invoice without delay and in priority to any other creditors. If the executor pays all or part of the invoice, this should be refunded to the executor from the deceased’s account.