Deceased Estates – Commonly Asked Questions
What is a deceased estate?
A deceased person’s ‘estate’ includes assets such as property, bank accounts and investments. The deceased person may also have liabilities including a mortgage, credit cards or other loans that need to be repaid.
Who is the executor or administrator?
The executor is the person appointed under a valid will.
If there is no valid will then the person who has the greatest entitlement in the estate under the intestacy laws can apply to the Supreme Court to be appointed as the administrator of the estate. The intestacy laws set out how the estate is to be distributed amongst the next of kin if the deceased did not have a valid will.
There can be more than one executor or administrator.
What is the role of the executor or administrator?
It is the role of the executor or administrator is to:
arrange the funeral;
identify all assets and liabilities of the estate;
obtain a grant of representation (that is, a grant or probate or letters of administration);
take control of and collect all of the assets which may include selling assets;
pay any liabilities including the funeral account, legal fees, tax, secured and unsecured creditors; and
distribute the estate to the beneficiaries in accordance with the terms of the will (if there is a will) or the laws of intestacy (if there is no will).
What assets form part of the estate?
Assets that may form part of the estate and are governed by the will (or intestacy laws) include:
real estate owned solely by the deceased or a portion of real estate owned as tenants in common by the deceased and another person;
bank accounts in the deceased’s sole name;
investments in the deceased’s sole name;
shares in the deceased’s sole name;
motor vehicles, boats, trailers, caravans and motorbikes;
life and other insurance policies payable to the estate;
unpaid salary/wages, annual leave and long service leave;
furniture and personal effects;
unpaid beneficiary entitlements from a family trust;
loans made by the deceased; and
superannuation benefits but only if the superannuation benefits are payable to the legal personal representative.
Grant of Probate and Grant of Letters of Administration
Grants of probate and letters of administration are collectively referred to as grants of representation.
The executor or administrator needs to apply to the Probate Office of the Supreme Court for a grant of representation to be made.
There are two main types of grants:
Probate - A grant of probate is a document that establishes that the will is valid and authorises the executors to deal with the estate assets.
Letters of administration - A grant of letters of administration has the same effect as a grant of probate but it is made when there is no valid will and authorises the administrator to deal with the estate assets. The grant is usually made to the person who has the greatest entitlement in the estate pursuant to the laws of intestacy.
There are other types of grants that can be made in special circumstances.
Why is a grant of representation required?
The Land Titles Office, banks and other financial institutions will not allow anyone to deal with the assets of a deceased person unless they are satisfied that they are dealing with someone who has proper authority to do so. The grant of representation establishes the executor’s or administrator’s authority to deal with the estate assets.
For more information or for advice in relation to a deceased estate, please contact:
Daniela Pavlovic
Special Counsel
T 03 5225 5227
E dpavlovic@harwoodandrews.com.au
or
Justin Hartnett
Principal
T 03 5225 5220
E jhartnett@harwoodandrews.com.au
