Specialised legal advice can ease the pressures of estate administration
Being named as an executor of someone’s estate can involve substantial duties during an already distressing time.
As executor, you are called on to identify, gather and preserve estate assets, manage tax affairs, pay debts/liabilities and to ensure the distribution of the net assets of the Estate according to the deceased’s instructions. The executor is also the person entitled to organise and coordinate the funeral, notify all service providers, financial institutions, etc., cancel subscriptions, and manage the expectations of beneficiaries.
The responsibilities and associated liabilities can understandably feel daunting. Having experienced legal advice can reduces the stress by providing clarity about your legal obligations, and assistance throughout the process.
Helping you understand your duties as an executor
The role of the executor in estate administration varies in complexity, but in many cases it is significant. As executor, you are responsible for a range of duties – from securing the estate’s financial assets pending their distribution to communicating with beneficiaries on progress and following special instructions left by the deceased.
Our experienced estate specialists are here to advise and guide you through the process.
Confirming the deceased assets
In the first instance, you are required to locate the deceased’s assets. In most cases, this means gaining access to documentation, such as certificates of title, insurance policies, bank statements, mortgage policies and more. Once the assets have been identified, you will need to determine the relevant process/es involved to transfer assets into the Estate, and then to the beneficiaries, and in particular whether an application needs to be made for a Grant of Probate or Letters of Administration.
Applying for a Grant of Probate or Letters of Administration
Before commencing administration, you must first ascertain whether you need to apply for probate. A Grant of Probate is required if there is real estate owned in the deceased’s sole name, or if any of the estate assets cannot be transferred without probate. This is more likely if there are assets over around $50,000.00.
What is a Grant of Probate?
A Grant of Probate is essentially a certificate from the Supreme Court confirming that the deceased’s will is valid. This provides security to financial institutions, the Land Titles Office and other entities in the knowledge that they are dealing with the properly authorised person.
What are Letters of Administration?
A Grant of Letters of Administration are issued when the deceased person has not made a will, or the will has been deemed invalid. You may also need to apply for Letters of Administration with the Will annexed where there is a valid Will but no executor nominated in the Will is able or willing to take on this role. In this case, the Supreme Court will issue a Grant of Letters of Administration allowing an individual, often the closest surviving next of kin of the deceased or the person with the greatest financial interest, to administer the estate.
The team at Olivetree Legal are experienced in applying for grants of probate and letters of administration applications and their related matters.
Preserving estate property and assets
Once the estate assets have been identified, you are also responsible for securing estate assets pending their distribution before the estate is settled. This can mean insuring/ maintaining insurance of any property or assets held by the deceased and making sure any bank accounts or other assets are accruing interest. Executors who fail in this duty may run the risk of being subject to claims by beneficiaries for lost benefits resulting from those failures.
At Olivetree Legal, we’re adept at helping you manage problems that might arise during the course of administering an estate.
Managing property and assets, tax and liabilities of the estate
The financial management of an estate can be complex or quite simple. You may be required to finalise tax affairs, preserve property and assets, and pay outstanding accounts owed by the deceased. This may be simple, particularly where the deceased was living in aged care and has no other significant assets or liabilities. Conversely, there may be significant complexities including taking over the role of the deceased in family trusts, self-managed super funds and private businesses.
Representing the estate in legal proceedings
If a dispute leads to a challenge being brought against the estate, you will be called on as the estate’s legal representative during the legal proceedings. For example, in a family provision claim, a potential beneficiary can advocate for more adequate provision from the estate. You will be responsible to defend the interests of the beneficiaries pursuant to the Will.
Navigating your personal liability
As an executor, you are accountable to the beneficiaries for your management of the estate. This includes your approach, the time taken and the perceived quality of your estate administration. If beneficiaries or creditors are unhappy with your decisions, or feel you’ve been negligent in some way, they can sue you for your failures in the course of the estate administration. Obtaining advice from lawyers experienced in estate administration can help you mitigate any risks of personal liability.
Distributing the estate assets
After a Grant of Probate (or Letters of Administration), any person eligible to make a claim for further provision (Testator Family Maintenance claim, also known in Victoria as a Part IV claim) may lodge their claim with the Supreme Court any time within six months after the Grant. If no claim has been made once this has lapsed, you are able to distribute the estate assets according to the instructions in the deceased’s will. Some Executors do choose to make distributions from the Estate prior to the conclusion of this six month timeframe. If you make distributions to beneficiaries during this time, and a successful claim is lodged, you may not be able to recover the distributions from the beneficiaries. In this case, you will be personally liable to pay the successful claim, and potentially legal fees involved in the litigation.
Legal fees for estate administration
Wherever possible, we provide a fixed cost estimate for estate administration. The costs involved depend on how much of the administration you would like to delegate to us, and how much you would like to undertake yourself.
Lodging your Probate or Letters of Administration application
Most executors or administrators of an estate engage a lawyer to prepare and lodge a probate or letters of administration application on their behalf. Our costs for the preparation of this application are $1,500.00.
The lodging fees are charged by the Probate Office, and are calculated based on the size of the estate. These fees can be found on the Supreme Court website.
Additional complexities and charges
If the application has any element of complexity (for example the will is not signed or witnessed in accordance with the formal requirements, or there is a question about the capacity of the testator to sign the will), we will provide you with a fixed fee estimate based on your circumstances.
Additional charges apply if you would like our assistance with the administration of the estate (that is, liaising on your behalf with financial institutions, share registries, beneficiaries, and so on). Estimated fees will be provided to you after our initial meeting, if you do choose to engage our services beyond the application for the Grant.
Useful resources for understanding estate administration
The Australian Death Notification Service is a free government initiative to help people get in touch with multiple organisations using a single online notification. It also includes useful checklists and guides.
VicRoads has a Deceased Estate pack, checklists and links to other useful documents to help you navigate licensing and registration matters as simply as possible.
The ATO has compiled helpful information about what to do when someone dies, how to get authority to deal with the ATO, lodging a final tax return, and trust tax returns.