Who is handling the estate?

You have just heard that Joe has died. Joe may be a long lost relative who may have left you a gift in his will. Joe may owe you money for work you did for him. So, how do I find out what is in his will? Who should I talk to about the monies he owes me?

This is where the Supreme Courts online probate notice search function can assist you. Most estates require a grant of probate or administration from the Supreme Court. This authorises an executor or administrator to collect the deceased’s assets, pay his liabilities and distribute the balance to the beneficiaries. Before an application for probate or administration can be made, the Supreme Court requires a notice to published.

This notice tells you:

  • Who the proposed executor or administrator is
  • How to contact them

You may be entitled by law to a copy of the will.

The online probate notice service opens the door to communication to pursue your enquiries or claim on the estate.

Your Best Practice Lawyer can assist you with making the search; advising on whether you are entitled to a copy of the will and to pursue your claim.

Superannuation claims and disputes

After the family home, superannuation is often the greatest source of a person’s wealth. It surprises many that superannuation is not an asset that normally passes to family members under the terms of a will.

Superannuation is dealt with under the terms of the Trust Deed (legal document) that sets up the superannuation fund and the superannuation legislation. It is the trustee of the fund that determines who will receive the superannuation monies upon your death. The options the trustee has includes paying the monies to your nominated beneficiary. The trustee is not bound to do this if your circumstances have changed unless you have a binding death benefit nomination in place. Usually a trustee will pay the superannuation monies to a dependent because favourable taxation consequences flow from such payments. As a last resort, the trustee may pay the monies to the executor to pass under the terms of the will, or if there is no will, upon intestacy.

If you are not satisfied with the trustee’s determination, most funds will allow for an internal review. If the distribution remains disputed then it is referred to the Superannuation Complaints Tribunal for final determination.

If you require assistance, you should contact a Best Practice Lawyer.

That Will is not right

People make mistakes and sometimes that extends to mistakes being made in a will. Usually the mistake is only found after the will maker has died. If this happens – what can be done about it?

Section 27 of the Succession Act, 2006 may hold the answer. It states:-

27 Court may rectify a will

(1) The Court may make an order to rectify a will to carry out the intentions of the testator, if the Court is satisfied the will does not carry out the testator’s intentions because:
(a) a clerical error was made, or
(b) the will does not give effect to the testator’s instructions.
(2) A person who wishes to make an application for an order under this section must apply to the Court within 12 months after the date of the death of the testator.
(3) However, the Court may, at any time, extend the period of time for making an application specified in subsection (2) if:
(a) the Court considers it necessary, and
(b) the final distribution of the estate has not been made.

Appointing a solicitor as your executor

An executor is appointed in a will to carry out the will maker’s wishes. This will usually involve:

  • Arranging the funeral
  • Identifying & protecting your assets
  • Obtaining a grant of probate
  • Paying your debts & taxes; and
  • Distributing the estate to your nominated beneficiaries

Usually this task is allocated to a spouse, child or friend of the will maker. Most people have no experience in administering an estate and may only be called upon once in their lifetime to do so. Most executors will engage a lawyer to guide them through the process, which involves personal liability if they get it wrong.

When making a will, consideration should be given to appointing a solicitor as your executor. The benefits include:

  • Avoiding the distress that the process could cause to your family or friend
  • Administration of the estate will run quickly and smoothly because a solicitor knows what to do
  • A solicitor is independent
  • It will assist in avoiding conflict amongst family members
  • A solicitor can defend the will against claims on the estate
  • A solicitor is experienced and is less expensive than a trustee company

Your will passes everything you own to your family, dependents, friends or charities. You will have peace of mind that the process is being carried out according to law in a professional and efficient manner. This will ultimately benefit your beneficiaries.

Being an executor

What is an executor?

If you have been named as an executor in someone’s will, it means the deceased wanted you to arrange his/her funeral and to administer his or her estate. Administering the estate will involve identifying, collecting and protecting the assets of the deceased, paying all debts and taxes and distributing the estate to the beneficiaries named in the will.

Your appointment as executor may be the one and only time in your life that you are required to administer an estate. It is usual to engage a solicitor to assist you in the process as you may be personally liable for any mistakes that you make.

For this reason it is not unusual for solicitors to be appointed as executors as they are familiar with what has to be done. They are also familiar with the technical rules for example, as to which share of the estate bears the liability for payment of the deceased’s debts and taxes.

Do executors get paid?

Generally, an executor acts for free unless the will states otherwise. However, an executor may apply to the Supreme Court for commission regardless of what the will says. If the executor is also a beneficiary, then legal advice should be sought as to whether or not you may apply for commission.

An executor is entitled to be reimbursed from the estate for any out of pocket expenses. This includes solicitor’s fees and taxation advice.

Can you get out of being an executor?

Being an executor is a time consuming and thankless task. Executors are expected to personally carry out the deceased’s wishes. It is not unusual for conflict to arise with beneficiaries. An executor may renounce probate if they do not wish to take on the role of executor. A solicitor can help with the appropriate documentation.

Your first steps as executor

As executor, the first thing you’ll need to do is to thoroughly read and understand the will. Then you should 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.
Common assets included in the inventory of property are:

  • Home
  • Other real estate
  • Car
  • Money
  • Bank accounts
  • Furniture
  • Household appliances
  • Jewellery
  • Shares and other investments
  • Life insurance policies, if payable to the estate
  • Superannuation, if payable to the estate
  • Outstanding work entitlements.

You should ensure that the assets are insured and kept safe.

You will also need to identify all debts and locate the beneficiaries.

It is a good idea to collect or redirect the deceased’s mail. You will usually need to apply to the Supreme Court for a grant of probate.

What is probate?

Probate is a certificate from the Supreme Court notifying the world at large that the attached will is valid and enabling the executor to administer the estate. The document is proof of the executor’s authority to deal with assets of the deceased.

Why is probate necessary?

The deceased’s assets may be held by others, for example, a bank holding the deceased’s funds, a share registry holding the deceased’s shares, and the Land Titles Office regulating the ownership and transfer of the deceased’s real estate. These asset holders may require probate before releasing the assets or transferring them in accordance with the will. The grant of probate confirms that the person seeking release of assets has authority to deal with them and this protects the asset holders against possible liability for handing assets over to the wrong person. This assists with the orderly and lawful succession of estates.

Fees for probate

The Supreme Court charges a sliding scale of fees for lodging an application for probate. The larger the estate, the higher the fee. However, where an estate is valued at less than $100,000 the Court does not charge a fee.

Paying expenses and debts

Once the Supreme Court has granted probate the executor must pay the deceased’s testamentary expenses and debts before they can distribute what is left. Technical rules apply as to the order in which assets are to be applied in payment of these liabilities and legal advice should be sought.
An estate bank account should be opened for collection of the deceased’s moneys as these funds should be kept separate from the executor’s personal assets.

Preparing a distribution report

Once an executor has sold the deceased’s assets and paid all of the debts a plan of distribution should be prepared showing all moneys received, all payments made and how the balance is to be distributed. This should be provided to the residuary beneficiaries. Some of the assets may be transferred to beneficiaries in appropriate circumstances.

Distributing the assets

It is usual to publish a notice calling for claims against the estate to be lodged with you. All claims must be finalised or provided for before distributing the estate.
It is usual to obtain a receipt from the beneficiaries to acknowledge that they have received their proper entitlement under the will.

How your solicitor can help you

Your solicitor can guide you through every stage of your journey as executor, including:

  • Informing you of your rights and responsibilities.
  • Helping you apply for Probate and complete the Probate forms.
  • Helping you identify and collect the deceased’s assets.
  • Advising you on any potential tax implications.
  • Advising you on the right order to pay debts and distribute assets.
  • Assisting you to resolve any claims against the estate.
  • Helping you draw up a statement of assets and distribution report

Rights of beneficiaries

Beneficiaries should obtain independent legal advice concerning their rights and entitlements in a deceased estate. The estate’s solicitor acts for the executor and not for the beneficiaries. The estate’s solicitor cannot provide beneficiaries with advice due to a conflict of interest.

Beneficiaries are entitled to a copy of the will. Sometimes, beneficiaries require the assistance of a solicitor to enforce that right.

Beneficiaries are also entitled to be kept informed about the administration of the estate. This is typically where problems arise and beneficiaries see the need to engage a solicitor. All too often the executor neglects or refuses to talk to the beneficiaries about what is in the estate, what is being done and when distributions can be made. Beneficiaries may also require advice concerning debts owed to or from the estate.

Best Practice Lawyers are often engaged by beneficiaries to find out what is going on and to protect their rights. If an executor refuses to fulfil his or her obligations, then it may be necessary to have them removed from office. After all, executors are accountable to beneficiaries who have a right to ensure the proper administration of the estate.

Executors: an overview of duties & responsibilities

This is a guide for executors about their role, their obligations and what is involved in managing and finalising an estate.

The role

The executor’s role is to personally carry out the wishes of the will maker as specified in the will and is a position of great trust. The executor must always act in the best interests of the estate and the beneficiaries and cannot intermingle his or her interests with the estate.
The executor is responsible for managing and protecting all of the assets of the estate until they are distributed. The executor is also responsible for paying all of the liabilities of the estate.

An executor should keep full and accurate records of how the estate has been managed and provide a summary of the estate’s transactions to the beneficiaries.

An executor cannot take sides with one of the beneficiaries if there is a dispute.
The executor must at all times act with care, and in the interests of the beneficiaries, must endeavour to administer the estate in accordance with any direction or power in the will as quickly as possible.

The executor may be liable in damages to beneficiaries for negligence in respect of any avoidable delay which results in loss to the beneficiaries either in relation to lost investment income or a lost opportunity to invest.

The funeral

The executor is responsible for making funeral arrangements and should follow any directions in the will in relation to those arrangements but is not bound to do so. The executor should consult with the family about the funeral arrangements. The reasonable cost of the funeral is an expense of the estate but the executor should be careful not to incur expenses beyond the available funds in the estate.

The body

As the executor is responsible for deciding whether the body is to be buried or cremated. Also the executor may be asked whether the organs can be donated. This is the decision of the executor usually in consultation with the next of kin. The executor should check the will for directions in regard to the body of the deceased. A direction that the body is not to be cremated is binding on the executor.

The will

It is not usual in Australia to have a formal reading of the will. In New South Wales the Succession Act specifies who is entitled to a copy of the will. The executor should consult with an experienced legal practitioner as to who is entitled before releasing a copy of the will to anyone.

The estate

The executor is responsible for the safekeeping of the assets of the estate. The executor should:

  • identify the deceased’s beneficiaries
  • ascertain what are the deceased’s assets and make a list as soon as possible (consideration should also be given to digital assets e.g. photographs, social media & email accounts)
  • ensure that assets are adequately insured where necessary
  • ensure that items such as jewellery & paintings are adequately secured
  • consider whether the locks to property need to be changed
  • ascertain what are the deceased’s liabilities (including tax)
  • ascertain if there is a superannuation death benefit payable
  • ascertain if the deceased had life insurance
  • redirect or collect the deceased’s mail

The executor must apply for (within 6 months of the date of death) and obtain a Grant of Probate, except in the case of estates with only jointly owned property or small bank accounts or personal items.

A Grant of Probate is a Supreme Court order that is issued by the Registrar of the court as a result of the executor complying with the stringent court Rules. In some situations the process is judicial and requires the making of the order by a Judge of the Supreme Court.

The Grant of Probate is necessary to give the executor the legal right to deal with certain assets in the estate such as real estate, shares and money in bank accounts. Those assets cannot be transferred, collected or sold unless a Grant is obtained.

After the Grant of Probate is obtained the executor must properly administer the estate by collecting any income, transferring and/or selling the assets, filing tax returns and paying any outstanding tax and satisfying the liabilities of the estate.

The executor is entitled to apply to the court for a commission, if the executor wishes to do so.

The executor has a final duty to distribute the estate in accordance with the terms of the will or any supervening court order.

Communication

The executor should keep the beneficiaries informed of progress with the estate, the date and amount of likely distribution, and if there is some unavoidable delay, inform them promptly explaining the reason.

Costs

The executor must realise that where a professional such as a solicitor or accountant is retained to carry out executor or real work, costs of such work are payable by the executor, although the costs of general estate administration are payable by the estate. The executor is entitled to reimbursement of any properly incurred costs paid by the executor in respect of the administration of the estate.

General

The administration of an estate and the role of the executor can be complex and time-consuming. In most cases it involves knowledge of the law of wills and succession and Supreme Court procedures together with access to the prescribed documents and forms.

At Best Practice Lawyers we recommend that executors instruct an appropriately qualified lawyer to provide professional advice and to ensure that the estate is administered properly. This will avoid the executor having personal liability to the beneficiaries of the estate for any aspect of the administration that is not carried out correctly or in accordance with the law.

Wills for the intellectually disabled

To make a valid will a person must have adequate mental capacity to carry out that act. We lawyers call it testamentary capacity. This requires a person to understand:

  1. what a will is and what it can do;
  2. what their assets are;
  3. who it is appropriate to consider as a beneficiary; and
  4. to properly consider the claims upon their estate and distribute their assets free of any insane delusion or disorder of the mind.

Unfortunately, many people lack this capacity. This could be from birth, by accident or by illness. Dementia and Alzheimer’s disease commonly deprive people of capacity.

Yet many disabled people may have substantial estates. They may have built this up before losing capacity, received a compensation payout or an inheritance.

We have laws of intestacy that distribute the estates of people who do not have a will. This applies to those who simply do not have a will through choice or neglect and those who lack capacity. However, the statutory distribution may favour unworthy people who have abandoned, neglected or abused the intellectually disabled person. Furthermore, those worthy of a legacy may have no entitlement to benefit at all.

So what can the law do to address this problem?

The answer lies in Section 8 Succession Act, 2006, which allows the Supreme Court to authorise a will to be made, altered or revoked for a person without testamentary capacity. The will must be one that is, or is reasonably likely to be, one that would have been made by the person if he or she had testamentary capacity.

If you care for an intellectually disabled person a Best Practice Lawyer can advise and guide you through the available process.

Deeds of family arrangement

A deed is a type of legal document. A deed of family arrangement is simply a deed recording the distribution of an estate where the distribution is not made in accordance with a will or the laws of intestacy. The purpose of the deed is to record the agreed distribution for posterity, and to protect the personal representative from a subsequent claim.

Deeds of family arrangement may be used in the following circumstances:

  • Where there are doubts about the meaning of a will, the affected beneficiaries can reach an agreement about how the will is to be put into effect;
  • Where the beneficiaries wish to rearrange the distribution of the estate between themselves;
  • To compromise a claim against the estate such as a family provision claim; and
  • To create an estate proceeds trust under the taxation legislation.

Any arrangement that would reduce the entitlement of a disabled person, such as a minor or an intellectually disabled person, will require the Court’s approval.

Best Practice Lawyers can assist you in preparing a deed of family of arrangement or providing independent advice about its contents.

Presumption of death

For legal purposes in NSW death is defined as being:
(a) irreversible cessation of all functions of a persons brain; or
(b) irreversible cessation of circulation of blood in the persons body.

However, this definition only applies where there is a body. In many cases, people go missing and are never seen again. This could occur in rock fishing, sailing, hiking and mountain climbing, natural disasters and the like.

A person wishing to prove an entitlement founded upon a person having survived another person must, at common law, prove that fact. Where the Supreme Court is satisfied by direct evidence or on presumption of death, that a person is dead, the Court shall have jurisdiction to grant probate of the deceased’s persons will or administration of the person’s estate, notwithstanding that it may subsequently appear that the person was living at the date of the grant.

Where a person is not heard from for a period of 7 years by those persons who would be expected to have communication with that person, then a Court may presume that person dead. This period may be less depending on the circumstances of the disappearance.

Cases based on the presumption of death must be distinguished from cases where the Court is able to infer death in the absence of a body from the circumstances of disappearance, such as an aircraft disappearing over water.

Where two or more persons have died under circumstances rendering it uncertain which are then survived, the death shall, for all purposes affecting the title to any property be presumed to have taken place in order of seniority, and the younger be deemed to have survived the elder.

If you require assistance in this complex area of law, then a Best Practice Lawyer can assist you.