What is Probate and FAQ's
Do I need probate or letters of administration?
There is no statutory requirement to obtain probate or letters of administration in every case, however asset holders (e.g. banks, insurance companies or superannuation funds) may require probate or letters of administration before releasing or transferring assets to confirm the person seeking release of assets has authority to deal with them, and to protect themselves against possible liability for handing assets to the wrong person.
Asset holders will, however, often release modest amounts without the need for probate or letters of administration to be obtained.
Real estate held solely in the name of the deceased person or as tenant in common will always require a grant in order to deal with it1.
What is probate?
Probate is a court order which confirms that the will is valid and that you, and any other executors, have the right to administer the estate. Before you even apply for Probate you’ll need to publish your intention to do so on the Supreme Court of NSW’s website. You can find instructions on how to do that on the website itself (www.supremecourt.lawlink.nsw.gov.au).
Fourteen days later, you can apply for Probate by lodging the right forms at the Probate Registry of the Supreme Court. You'll need to lodge:
- Proof of death (eg the death certificate)
- The inventory of property
- An executor's affidavit
- The original will
Once you’ve obtained Probate, you can start selling the deceased’s assets so that the money can be divided amongst the beneficiaries. You might also need to contact the banks and companies in which the deceased had money, so that they release any funds.2
What are letters of administration?
Letters of administration refers to a certificate issued by the Supreme Court that authorises a person to act as an executor when there is no will or when there is a problem with the will. An example of the latter is when the executor named in the will is deceased or is not capable of acting as an executor due to reasons of ill health, mental capacity or legal circumstances.3
When should Probate be applied for?
The Probate Rules require an application for Probate to be made within six (6) months of the testator's death. If the application is not made within that period an explanation of the reasons for delay will have to be given in the form of an Affidavit, either a separate Affidavit or included in the Affidavit of the Executor4.
Do I need a will before Probate or Letters of Administration can be dealt with and the assets of the deceased can be dealt with?
It depends on the nature of the assets. If the estate is small and the assets comprise say a motor vehicle, furniture and personal effects and a small bank, credit union or building society account, these can usually be dealt with – in the case of a will – by production to the bank or financial institution of the will, a death certificate, evidence of the executor’s identity, a completed withdrawal form and a completed indemnity in the form required by the bank or institution. In this case the executor is personally liable for the payment of the funeral expenses and debts of the deceased, up to the value of the estate, and is personally liable to the beneficiaries for payment of their entitlement.
Where there is no will, in the above circumstances, subject to production of the death certificate, a completed withdrawal form and a completed indemnity as above, and evidence of the identity of the next of kin, payment may be made to the next of kin who will then be liable for payment and distribution as above to the persons entitled.
One disadvantage to proceeding without a grant of probate or letters of administration is that the person dealing with assets is not able to obtain protection from liability for claims through the publication of statutory notices. An option to consider is to refer a small estate to the New South Wales Trustee and Guardian who has additional powers in dealing with small estates including the filing of an election to administer the estate which provides all the protections of a grant of probate or administration5.
Does the Supreme Court of NSW charge a fee to obtain a grant of probate or letters of administration?
Usually you’ll have to pay a the Court a fee when you lodge the Probate or letters of administration forms. But the Court makes an exception where an estate is worth less than $100,000. For most estates, some banks will also let you access the deceased’s funds before the court grants Probate to cover this fee6.
What is an executor?
When someone dies, an executor is the person appointed by the will to administer the estate. Put simply, this involves making sure their debts are paid and that their assets and possessions go where they wanted them to.
Usually, people name just one or two executors in their will, but technically they can name as many executors as they like. To make sure the whole process runs smoothly a lot of people choose to name a solicitor as one of the executors, who may charge a fee for their expertise in administering estates.
If someone has named you sole executor, it’s usually still a good idea to consult a solicitor, just to make sure you get it right. After all, administering an estate isn’t always straightforward and, as executor, you can be held liable if you get it wrong7.
Can you get out of being an executor?
If you don’t want to be an executor, you can get out of it by signing a formal ‘renunciation’ and filing it in the Supreme Court of NSW. You should do this as soon as you can, because your renunciation may not be effective if you’ve completed even some of the executor’s duties. A solicitor can help you do this8.
What do you need to do as an executor?
Make application for probate
For this you will need the original certificate and Will (if there is one). You will also need to make a list of everything the deceased owned as well as any payments or assets they were entitled to. This list is known as an inventory of property and should include an estimate of their value as at the date of the deceased's death. Common assets included in the inventory of property are:
- Other real estate
- Bank accounts
- Shares and other investments
- Insurance policies
- Outstanding work entitlements
If there’s more than one beneficiary under the will, you may need to get some items valued.
Paying expenses and debts
Once the Supreme Court grants Probate you have to pay the deceased’s expenses and debts before you can give away any assets or money. To do this, you’ll need to open a bank account in the name of the estate and deposit their money into it – both from bank accounts and the sale of any of their assets. Estate Legal has a firm trust account which you can deposit the money into. There is a set order for paying debts, which goes:
- funeral expenses (you can usually pay these even before probate has been granted)
- administration expenses (eg legal costs in obtaining Probate)
- outstanding tax, including income tax and capital gains tax
- other debts.
Preparing a distribution report
Once you’ve sold all of the deceased’s assets and paid all their debts, you’ll need to prepare a report detailing exactly what assets they owned, how much money you received from each asset you sold, and also what debts you paid. This report is called a distribution report. You must give a copy of the distribution report to each of the beneficiaries when you pay them their share of the estate. Estate Legal can assist you with preparing the distribution report.
Distributing the assets
Finally, you can now give the deceased’s money and possessions away in line with the will (so long as six months have now passed since the deceased died). Within that time, you can also publish a notice telling anyone with a claim against the estate to notify you of the details within 30 days9.
1 Response has been sourced from the Supreme Court of New South Wales – Frequently asked questions about probate: http://www.supremecourt.justice.nsw.gov.au/supremecourt/sco2_probate/frequently_asked_questions.html
2 Response has been sourced from the Law Society of NSW Being an Executor Publication - https://www.lawsociety.com.au/community/publicationsandfaqs/BeinganExecutor/index.htm
3 See Footnote 1
4 Response has been sourced from the Law Society of NSW – Wills & Estates FAQs: https://www.lawsociety.com.au/resources/areasoflaw/ElderLaw/WillsestatesFAQs/index.htm
5 See Footnote 4
6 See Footnote 2
7 See Footnote 2
8 See Footnote 2
9 See Footnote 2