When a person dies, there is a process that needs to be followed to deal with the assets and liabilities of the deceased.
It can be an overwhelming feeling if someone has died and you are apointed as the executor, or otherwise need to sort out what is to happen to the person's estate.
Typically, most of the process is dealt with by us in the course of acting in the estate.
We are happy to speak with you on the phone initially, to provide advice and answer any questions you may have about what needs to happen first. We understand that this can be a difficult time and that some early advice and guidance can be a great help. We will then arrange a meeting with you, to take down all of the details and step you through what needs to happen in the administration of the Estate.
Most people leave a Will. The Will usually appoints one or more people as the executor. It is the executor who "takes charge" of the deceased's assets at an early stage. In most cases that will simply involve identifying the assets and anything to which the deceased was entitled (such as the proceeds of superannuation and insurance policies).
You should bring a copy of the WIll to your first appointment. But don't worry if you are not sure where the original Will is held, or whether the person left a Will at all - we can advise you and assist in locating the Will or dealing with the Estate if there is no Will - called an intestacy.
The Role of the Executor
The executor's role begins with making the funeral arrangements and ends when the deceased's debts and taxes are paid and the assets of the estate are distributed to the beneficiaries named in the Will.
Again, we will assist you in that role, by advising on each of the steps that needs to occur and taking the steps to finalise the assets and distribute the estate.
You can prepare for our first appointment by making a list of the assets and debts, together with the apporximate values, and gathering together any statements or documents setting out these amounts.
After reviewing the list of assets and debts, we can advise you as to whether a grant of Probate is needed. "Probate" is a formal order of the Supreme Court declaring tha tthe Will is valid and confirming the right of the executor to deal with the assets and liabilities (that is, administer the estate).
When is a Grant of Probate Needed?
Generally speaking a Grant of Probate will be required where the deceased owned assets such as real estate (a house or unit) or shares and those assets were not owned jointly. Where assets are jointly owned, those assets will usually automatically pass to the surviving joint owner.
Where there are funds held in a bank or building society account, the financial institution may also require a grant of Probate before releasing those funds - each of the financial institutions has a maximum amount they will release without a grant of probate. Similarly, a bond held by a retirement village or nursing home may also require a grant of Probate before those funds are released to the estate.
Administration of the Estate
The administration of the estate can be broken into three parts, namely:
- Gathering in the assets
- Payment of the debts and taxes
- Distribution of the surplus to the beneficiaries
The first part involves gathing in funds sufficient to cover the debts and taxes of the decased (including the funeral expenses) and to ensure tha tthe estate can be distributed appropriately. During this stage, all accounts with financial institutions will be closed and some other assets may be sold. If Probate of the Will is required, the application is made to the Supreme Court at this stage.
During the second part, the executor arranges the payment of the debts and taxes of the decased. A tax return for the deceased and for the estate may be required at this stage.
The third part involves distributing the surplus assets to the beneficiaries under the Will. The distribution can take the form of transfer of a physical asset (such as a house or a motor vehicle) or payment of money (or both). The distribution can give rise to taxation issues (such as Capital Gains Tax) to the beneficiaries.
What if there is no Will?
There will be no executor. It will be necessary for a person (usually the next of kin) to apply for a grant of Letters of Administration (which has the same function as Probate).
The estate is then distributed to relatives, according to an order of entitlement set out in the Law - contrary to popular belief, the estate does not usually pass to the Government if no Will exists.
Don't worry, we can guide you though this process if there is no Will.